J-S56016-18

NON-PRECEDENTIAL DECISION - SEE SUPERIOR COURT I.O.P. 65.37

DISCOVER BANK

v.

KEL-LEE RYAN, 

Appellant.

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 IN THE SUPERIOR COURT OF

 PENNSYLVANIA

 No. 667 MDA 2018

Appeal from the Order Entered March 26, 2018

in the Court of Common Pleas of Berks County,

Civil Division at No(s): 16-05676.

BEFORE: GANTMAN, P.J., KUNSELMAN, J., and MUSMANNO, J.

MEMORANDUM BY KUNSELMAN, J.: FILED FEBRUARY 08, 2019

Kel-lee Ryan appeals from an order that denied her request to enforce 

an alleged settlement agreement, and, more importantly, directed her to pay 

$500 in attorneys’ fees to Discover Bank. The court of common pleas entered 

that order, because it believed her motion to enforce a settlement agreement

was frivolous. Only the imposition of counsel fees is presently before us. For 

the reasons below, we will vacate the part of the order awarding counsel fees. 

This case began in 2016 when Discover Bank filed suit seeking breach 

of contract damages against Ms. Ryan for her unpaid, credit-card debt. The 

court entered a non-jury award in favor of Discover Bank, and against Ms. 

Ryan in the amount of $17,092.86. Ms. Ryan appealed the judgment against 

her. While the appeal was pending, however, she discontinued it on March 
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15, 2018. She did so because she believed the parties had reached a 

settlement of the underlying matter. 

On March 7, 2018, she filed an Emergency Motion with the trial court to 

enforce the settlement agreement. After argument on the motion, the court 

denied it. The court concluded that Ms. Ryan attempted to amend the 

proposed settlement agreement in three respects, but Discover agreed to only 

one modification. Therefore, the parties did not reach a final agreement. The 

court further denied Ms. Ryan’s request for counsel fees. Instead, it ordered 

Ms. Ryan to pay counsel fees to Discover based on Ms. Ryan’s frivolous 

motion. Trial Court Opinion, 5/22/18, at 3. Ms. Ryan appealed that order. 

In this second appeal, Ms. Ryan raises four issues, which all essentially 

allege one error, namely whether the trial court abused its discretion when it 

ordered Ms. Ryan to pay $500 in counsel fees to Discover.

1

 See Ryan’s Brief 

at 4-5. 

“[A]ppellate review of an order of a tribunal awarding counsel fees to a 

litigant is limited solely to determining whether the tribunal palpably abused 

its discretion in making the fee award.” Lucchino v. Commonwealth,

Department of Environmental Protection, 809 A.2d 264, 268–269 (Pa. 

2002). If “the record supports a tribunal’s finding of fact that the conduct of 

the party was dilatory, obdurate, vexatious, or in bad faith, this Court will not 

disturb an award of counsel fees in the absence of an abuse of discretion.” 

____________________________________________

1 Discover filed no appellee brief.
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Id. at 269–270. An abuse of discretion is not merely an error of judgment. 

It occurs only when the trial court has “overridden or misapplied” the law, “or 

the judgment exercised is manifestly unreasonable, or the result of partiality, 

prejudice, bias or ill-will . . . .” Commonwealth v. Crispell, 193 A.3d 919, 

939 (Pa. 2018).

To determine whether the trial court abused its discretion in imposing 

counsel fees upon Ms. Ryan, we examine the rationale for its decision. First, 

we note that the trial court strongly believed there was no settlement 

agreement between the parties. The court explained:

It is a basic principle of contract law that an acceptance 

must be unconditional and absolute. Temple University 

v. Healthcare Management, 764 A.2d 587 (Pa. Super.

2000). According to [Ms. Ryan’s] own allegations, the 

parties engaged in negotiations for a settlement. [Discover]

made a huge concession by agreeing to reduce the 

judgment of the verdict from over $17,000.00 to 

$10,500.00. [Ms. Ryan] agreed to withdraw her appeal in 

exchange for the smaller obligation. That was the extent of 

any agreement. [Discover] made an offer incorporating 

those terms in the Agreement, which [Ms. Ryan] refused to 

sign unless three modifications occurred. [Discover] agreed 

to only one of those amendments. It then informed [Ms. 

Ryan] that it would withdraw its offer if [she] did not agree 

to the remaining terms. [Ms. Ryan] did not agree. Both 

parties had to believe that the changes [Ms. Ryan]

requested were material. [Ms. Ryan] did not agree to them, 

and [Discover] refused to sign Agreement unless they were 

included. A reply to an offer which purports to accept the 

offer, but instead changes the terms of the offer, is not an 

acceptance, but, rather, is a counteroffer, which has the 

effect of terminating the offer. An acceptance of an offer or 

counteroffer must be unconditional and absolute. 

Epenshade v. Epenshade, 729 A.2d 1239 (Pa. Super. 

1999). Thus, there was no agreement in the case sub 

judice. [Ms. Ryan] never unconditionally accepted 
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[Discover’s] offer but terminated it by making a counteroffer 

which [Discover] only partially accepted.

Trial Court Opinion, 5/22/18, at 5-6. 

After concluding that the parties did not reach a settlement in this 

matter, the court further found that Ms. Ryan’s motion to enforce the 

settlement was entirely frivolous. The court observed: 

. . . It was a frivolous petition, because there was no 

agreement between the parties to enforce. Simply stating 

that the parties had entered into an agreement does not 

make an agreement. [Discover] withdrew any offer 

following [Ms. Ryan’s] refusal to sign the agreement without 

the modifications. [Discover] did not agree to [Ms. Ryan’s]

counteroffer. Thus, there was no agreement and no 

meeting of the minds. [Ms. Ryan] even admitted in her 

petition and Concise Statement that the parties did not 

agree to all the terms of the written settlement agreement. 

Thus, there was no unconditional acceptance and nothing 

for this court to enforce.

Id. at 6. Thus, it believed the award of counsel fees against Ms. Ryan was 

justified. 

The court’s opinion, however, does not state the legal authority upon 

which it entered the award of counsel fees. Based on the court’s calling Ms. 

Ryan’s petition “frivolous,” we presume the court believed it was authorized 

to impose counsel fees under Pennsylvania Rule of Civil Procedure 1023. 

Alternatively, courts also have authority to impose counsel fees under section 

2503(7) of the Judicial Code. As we will discuss, the court did not properly 

apply either of these laws. 
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This Court has previously held that under Pennsylvania Rules of Civil 

Procedure 1023.1, 1023.3, and 1023.4: (1) a court may sua sponte impose 

sanctions against a party only if it, inter alia, first directs that party to show 

cause why sanctions are not merited; and (2) in the absence of any motion 

for sanctions, a court that imposes sanctions on its own initiative may only

impose a penalty to be paid into court or directives of a nonmonetary nature, 

and may not award payment to the other party. Lowe v. Lowe, 110 A.3d 

211, 212 (Pa. Super. 2015). 

Here, the Court did not follow either of these mandates. First, it failed 

to impose a rule to show cause why it should not impose the sanctions and 

conducted no hearing on the issue. Additionally, because Discover did not file 

a motion seeking sanctions under this Rule, and the Court acted sua sponte, 

the Court inappropriately awarded the fees to Discover, instead of directing

that the penalty be paid into court. Because the trial court misapplied Rule

1023, its award of counsel fees on this basis cannot stand. 

Similarly, the record does not support an order of counsel fees under 

the Judicial Code. Generally, the law allows a judge to impose attorneys’ fees 

as a sanction against a party for its “dilatory, obdurate or vexatious conduct 

during the pendency of a matter.” 42 Pa.C.S.A. § 2503(7). Here, the trial 

court made no such finding. In the absence of such a finding, the trial court’s 

order of counsel fees on this basis also cannot stand. 
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In sum, because the trial court misapplied the law when it ordered Ms. 

Ryan to pay $500 in counsel fees to Discover, it abused its discretion.

Therefore, we must vacate that portion of the court’s March 26, 2018 order.

Order vacated in part.

Judgment Entered.

Joseph D. Seletyn, Esq.

Prothonotary

Date: 02/08/2019