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HomeMy WebLinkAbout1999-1599 Civil PAUL GETTEL, INDIVIDUALLY AND : IN THE COURT OF COMMON PLEAS OF CARS BY GETTEL BODY SHOP, INC., : CUMBERLAND COUNTY, PENNSYLVANIA PLAINTIFFS : : V. : : USAA GENERAL INDEMNITY : INSURANCE COMPANY, : DEFENDANT : 99-1599 CIVIL TERM IN RE: MOTION OF DEFENDANT FOR SUMMARY JUDGMENT BEFORE BAYLEY, J. AND EBERT, J. OPINION AND ORDER OF COURT Bayley, J., September 24, 2009:-- In November, 1995, plaintiffs, Paul Gettel, individually and Cars by Gettel Body Shop, Inc., executed a written Direct Repair Program Agreement with defendant, USAA General Indemnity. Section I, titled “Repair Program,” provides: USAA personnel are authorized to make direct referrals to the DRF consistent with the law of the state of Pennsylvania concerning USAA has no such referrals and with the consent of the claimant. obligation to refer claimants to the DRF. However, if USAA does refer a claimant to the DRF, the DRF agrees to perform services according to the conditions in the attached document. (Emphasis added.) Plaintiffs made an investment of money and time to satisfy the requirements of defendant to participate in its Direct Repair Program. Pursuant to the Agreement, plaintiffs made repairs on referrals from defendant to around the beginning of February, 1997, when defendant made a decision, based on several differences it had with plaintiffs on quality related concerns, workmanship and delays in the repair process, not to send plaintiffs any more referrals. 99-1599 CIVIL TERM Defendant sent plaintiffs a letter by regular mail on March 26, 1997, stating that no more repair work would be referred to them. Plaintiffs filed a complaint, and then an amended complaint, against defendant. They set out a count of breach of contract and a count titled “Fraud/Misrepresentation/ Deceit Promissory estoppel/Detrimental Reliance/Equity.” In each count plaintiffs seek damages in excess of $25,000. Defendant filed a motion for summary judgment as to claims of deceit, detrimental reliance and breach of contract, that was briefed and Washington v. Baxter argued on September 9, 2009. In , 719 A.2d 733 (Pa. 1998), the Supreme Court of Pennsylvania set forth the standard for deciding a motion for summary judgment. A court: . . . must 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. Pennsylvania State University v. County of Centre, 532 Pa. 142, 143-145, 615 A.2d 303, 304 (1992). In order to withstand a motion for summary judgment, a non-moving party “must adduce sufficient evidence on an issue essential to his case and on which he bears the burden of proof such that a jury could return a verdict in his favor. Failure to adduce this evidence establishes that there is no genuine issue of material fact and the moving party is entitled to judgment as a matter of law.” Ertrel v. Patriot-News Co., 544 Pa. 93, 101-102, 674 A.2d 1038, 1042 (1996). On October 29, 2003, judgment on the pleadings was entered in favor of defendant on plaintiffs’ claims for promissory estoppel, fraud and misrepresentation. We agree with defendant that describing the conduct set forth in Count II as deceit is the same thing as describing it as fraud. “Fraud is a generic term used to describe anything calculated to deceive, whether by single act or combination, or by suppression of truth, or suggestion of what is false, whether it be by direct falsehood or by innuendo, by speech or silence, word of -2- 99-1599 CIVIL TERM Blumenstock v. Gibson, mouth, or look or gesture.” 811 A.2d 1029 (Pa. Super. 2002). “Detrimental reliance is another name for promissory estoppel.” Matarazzo v. Millers Mutual Group, Inc., 927 A.2d 689 (Pa. Commw. 2007). Therefore, because plaintiffs’ claims for fraud and promissory estoppel have been dismissed, its claims for deceit and detrimental reliance must also be dismissed. inter alia In their amended complaint, plaintiffs allege, : 19. The Defendant terminated Plaintiff, Cars by Gettel, on March 26, 1997, Plaintiff, Cars by Gettel contends this termination was arbitrary, capricious and without good cause, and in breach of the Written Agreement. 20. During 1996, Defendant, USAA, began referring auto repairs to other shops in the area in breach of the contract executed between Plaintiff, Cars by Gettel, and Defendant, USAA. 21. Defendant, USAA ceased referring vehicles to Plaintiff, Cars by Gettel, before Plaintiff, Cars by Gettel, was notified by letter of March 26, 1997. 22. The termination letter sent by Defendant, USAA, to Plaintiff, Cars by Gettel, dated March 16, 1997, was not in conformity with Section V of the written agreement. The failure and refusal by Defendant, USAA, to 23. honor and comply with its written agreement and with its promises to the Plaintiff, Cars by Gettel, constitutes an actionable breach of contract in the following particulars: a. Defendant, USAA, stopped making direct referrals to Plaintiff, Cars by Gettel Body Shop, Inc., and made direct referrals to other repair facilities in the area prior to termination of the contract by either party; b. Defendant, USAA, prevented Plaintiff, Cars by Gettel, from performing the contract so as to satisfy of each referred customer by its policy of using after market parts; c. Defendant, USAA, terminated the contract without cause; and d. Defendant, USAA, terminated the contract without the proper notice specified in the contract. (Emphasis added.) The parties’ Direct Repair Program Agreement provides in Section V -- -3- 99-1599 CIVIL TERM Modification and Termination The DRF may modify parts and labor rates by notifying USAA 30 (THIRTY) days prior to such change. Notification must be in writing by certified mail return receipt requested address to the designated USAA representative listed within this agreement. USAA or the DRF may terminate this agreement at any time by notifying the other party to the agreement. Each party will give the other 30 (THIRTY) days notice to cancel the agreement. Notification must be in writing by certified mail return receipt requested addressed to the designated representative for the DRF or USAA listed within this agreement. The DRF shall not: (1) Charge to replace parts which were not damaged as a result of the accident or occurrence, (2) Charge for labor hours or repair work which was not performed, (3) Cause additional damages to the vehicle which did not result from the accident or occurrence, (4) Charge for OEM parts when recycled, reconditioned, salvage, or aftermarket parts were used in the repair of the vehicle, (5) Fail to properly check for the availability of recycled, reconditioned, salvage, or aftermarket parts in situations where the use of such parts is allowed, (6) Give or receive any gift, compensation, a rebate or other consideration to or from USAA claims personnel or its agents, (7) Enter into separate agreements with the owner of a vehicle being repaired under this agreement to pay a rebate, lower the quality of repair of the vehicle in exchange for a rebate, alter the repair to reduce or eliminate a deductible, or allow repairs of prior unrelated damages in order that they can be paid under the covered claim. This does not include payment for covered damages with an Appearance Allowance, (8) File, or assisting others to file, false or fraudulent insurance claims to USAA or its agents, (9) Fail to comply with the requirement that all USAA DRP appraisals will be written and generated by the primary and/or secondary designee, (10) Generate Audatex appraisals on vehicles not subject to this agreement using the authorized USAA Audatex Identification Number, or any unauthorized use of the USAA Audatex Identification Number. -4- 99-1599 CIVIL TERM A violation of any of the above listed conditions will be considered by USAA as reason for immediate termination of this Agreement. (Emphasis added.) This contract contains the following integration clause: “This Agreement contains the entire Agreement of the parties and no representations other than those expressed herein are binding on the Parties.” Defendant maintains it is entitled to summary judgment on plaintiffs’ breach of contract claim because it has no obligation to refer claimants to plaintiffs, and it had a right to terminate the contract without cause which it did. Although the written notice of that termination was not sent by certified mail as provided for in the contract, plaintiffs admit that they received the notice. Thus, there was substantial compliance with the contractual notice requirement for termination and plaintiffs clearly were not prejudiced by the method in which the Mertz v. Lakatos, notice was delivered to them. See 33 Pa. Commw. 230 (1978). In their opposition to the motion of defendant for summary judgment, plaintiffs argue that the Direct Repair Program Agreement is ambiguous. They maintain that the underlying purpose of the contract provides a mechanism by which defendant is to provide referrals to them in exchange for certain discounts and levels of service that they promised to provide. They argue that: “The Agreement when read as a whole clearly contemplates that Defendant would refer vehicles to Plaintiff for repair.” They maintain that as a direct repair facility for defendant they were “entitled to receive referrals from USAA.” They dispute the claim of defendant that the contract unambiguously provides that it is not -5- 99-1599 CIVIL TERM obligated to refer work to them “as the purpose of the Agreement itself is clearly conflicting with such proposition.” They argue that the ambiguity of the written agreement is exposed by the following provision: USAA personnel are authorized to make referrals to the DRF consistent with the law of the State of Pennsylvania concerning such referrals and with the consent of the claimant. USAA has no obligation to refer claimants to DRF. However, if USAA does refer a claimant to the DRF, the DRF agrees to perform services according to the conditions in the attached document. Plaintiffs suggest that an issue of fact that must be decided at trial is whether defendant owed plaintiffs a duty to make referrals and thus, when it did not, that resulted in a breach of contract to which they are entitled to damages. They misconstrue, however, the issue which governs disposition of this motion for summary judgment. Certainly it was contemplated by the parties that when plaintiffs became part of defendant’s Direct Repair Program defendant would refer work to them. Plaintiffs acknowledge that defendant did refer repair work to them. Plaintiffs are really arguing that defendant could not terminate their participation in the Direct Repair Program without cause. However, the contract is not ambiguous in this regard. While it does provide for immediate termination for ten specified types of conduct, it also provides for termination without cause upon thirty days written notice. Notwithstanding what the differences were between defendant and plaintiffs as to how plaintiffs were performing repair work, defendant chose in March, 1997, to exercise its contractual right to terminate plaintiffs’ participation in its Direct Repair Program under the 1995 contract. That legally ended the relationship between plaintiffs and defendant and was not a breach of contract. Plaintiffs maintain that defendant functionally terminated the -6- 99-1599 CIVIL TERM contract around the beginning of February, 1997, when it did not send them any more work. However, that conduct until the time the contract was formally cancelled does not constitute a breach of contract because there was no duty under the contract for defendant to refer a specific number of vehicles to plaintiffs for repair. For the foregoing reasons, the following order is entered. ORDER OF COURT IT IS ORDERED AND NOW, this day of September, 2009, that summary judgment is entered in favor of defendant on plaintiffs’ claims for deceit, detrimental reliance and breach of contract. By the Court, Edgar B. Bayley, J. Eric J. Wiener, Esquire 2151 North Front Street Harrisburg, PA 17110 For Plaintiffs Brett M. Woodburn, Esquire 3631 North Front Street Harrisburg, PA 17110 For Defendant :sal -7- PAUL GETTEL, INDIVIDUALLY AND : IN THE COURT OF COMMON PLEAS OF CARS BY GETTEL BODY SHOP, INC., : CUMBERLAND COUNTY, PENNSYLVANIA PLAINTIFFS : : V. : : USAA GENERAL INDEMNITY : INSURANCE COMPANY, : DEFENDANT : 99-1599 CIVIL TERM IN RE: MOTION OF DEFENDANT FOR SUMMARY JUDGMENT BEFORE BAYLEY, J. AND EBERT, J . ORDER OF COURT IT IS ORDERED AND NOW, this day of September, 2009, that summary judgment is entered in favor of defendant on plaintiffs’ claims for deceit, detrimental reliance and breach of contract. By the Court, Edgar B. Bayley, J. Eric J. Wiener, Esquire 2151 North Front Street Harrisburg, PA 17110 For Plaintiffs Brett M. Woodburn, Esquire 3631 North Front Street Harrisburg, PA 17110 For Defendant :sal