J-A05041-17

2017 PA Super 256

ENTERPRISE BANK IN THE SUPERIOR COURT OF

PENNSYLVANIA

Appellant

v.

FRAZIER FAMILY L.P., A PENNSYLVANIA 

LIMITED PARTNERSHIP

Appellee No. 1171 WDA 2016

Appeal from the Order Entered August 3, 2016

In the Court of Common Pleas of Allegheny County

Civil Division at No(s): GD 14-001375

BEFORE: BENDER, P.J.E., SHOGAN, J., and MOULTON, J.

OPINION BY MOULTON, J.: FILED AUGUST 8, 2017

Enterprise Bank (“Enterprise”) appeals from the August 3, 2016 order 

entered in the Allegheny County Court of Common Pleas in favor of Frazier 

Family L.P., a Pennsylvania Limited Partnership (“Frazier”) denying 

Enterprise’s request for counsel fees. We agree with the trial court that the 

relevant loan documents do not authorize Enterprise to collect counsel fees 

for work performed by its in-house counsel. Accordingly, we affirm.

On December 28, 2012, Frazier executed and delivered in favor of 

Enterprise three loan documents in the principal amount of $421,000. 

Frazier first signed a Business Loan Agreement (“Loan Agreement”), which 

contains the following provision:

Attorneys’ Fees; Expenses. Borrower agrees to pay 

upon demand all of Lender’s costs and expenses, including 

Lender’s reasonable attorneys’ fees and Lender’s legal 

expenses, incurred in connection with the enforcement of 

this Agreement. Lender may hire or pay someone else to 
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help enforce this Agreement, and Borrower shall pay the 

costs and expenses of such enforcement. Costs and 

expenses include Lender’s reasonable attorneys’ fees and 

legal expenses whether or not there is a lawsuit, including 

reasonable attorneys’ fees and legal expenses for 

bankruptcy proceedings (including efforts to modify or 

vacate any automatic stay or injunction), appeals, and any 

anticipated post-judgment collection services. Borrower 

also shall pay all court costs and such additional fees as 

may be directed by the court.

Loan Agreement, 12/28/12, at 5.

Second, Frazier signed a Promissory Note (“Note”), which contains the 

following provision:

ATTORNEYS’ FEES; EXPENSES. Lender may hire or pay 

someone else to help collect this Note if Borrower does not 

pay. Borrower will pay Lender that amount. This includes, 

subject to any limits under applicable law, Lender’s 

reasonable attorney’ fees and Lender’s legal expenses, 

whether or not there is a lawsuit, including reasonable 

attorneys’ fees, expenses for bankruptcy proceedings 

(including efforts to modify or vacate any automatic stay 

or injunction), and appeals. If not prohibited by applicable 

law, Borrower also will pay any court costs, in addition to 

all other sums provided by law. 

Note, 12/28/12, at 2.

Third, Frazier signed an Open-End Mortgage and Security Agreement 

(“Mortgage”) for the premises at 100 Highland Pines Court, Pittsburgh, 

Pennsylvania (“Mortgaged Premises”) as security for repayment of the Note. 

The Mortgage contained the following provision:

Attorneys’ Fees; Expenses. If Lender institutes any 

suit or action to enforce any of the terms of this Mortgage, 

Lender shall be entitled to recover such sum as the court 

may adjudge reasonable as attorneys’ fees at trial and 

upon any appeal. Whether or not any court action is 

involved, and to the extent not prohibited by law, all 
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reasonable expenses Lender incurs that in Lender’s opinion 

are necessary at any time for the protection of its interest 

or the enforcement of its rights shall become a part of the 

Indebtedness payable on demand and shall bear interest 

at the Note rate from the date of the expenditure until 

repaid. Expenses covered by this paragraph include, 

without limitation, however subject to any limits under 

applicable law, Lender’s reasonable attorneys’ fees and 

Lender’s legal expenses, whether or not there is a lawsuit, 

including reasonable attorneys’ fees and expenses for 

bankruptcy proceedings (including efforts to modify or 

vacate, any automatic stay or injunction), appeals, and 

any anticipated post-judgment collection services, the cost 

of searching records, obtaining title reports (including 

foreclosure reports), surveyors’ reports, and appraisal fees 

and title insurance, to the extent permitted by applicable 

law. Grantor also will pay any court costs, in addition to all 

other sums provided by law.

Mortgage, 12/28/12, at 12.

On January 30, 2014, Enterprise filed a complaint in mortgage 

foreclosure in the amount of $418,030.93 requesting, among other things, 

that Frazier pay Enterprise’s reasonably incurred counsel fees. On May 2, 

2014, Frazier filed preliminary objections, asserting that the language “pay 

or hire someone else” in the Note did not include Enterprise’s in-house 

counsel. On January 13, 2015, the trial court appointed Kuzneski & Lockard, 

Inc., as receiver for the Mortgaged Premises. 

On February 26, 2016, the receiver filed an amended motion for order 

of distribution. The order of distribution included a $512,777.15 payoff from 

Enterprise, dated December 2, 2015 (“Payoff”). “The Payoff contained an 

itemization for fees and expenses due and owing [Enterprise], including 

[counsel] fees through November 25, 2015 for $34,569.25. The basis for 
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these [counsel] fees is the time spent by [Enterprise]’s in-house legal 

counsel Joseph A. Fidler and paralegal Justina Fuller. . . .]. Opinion, 

10/3/16, at 1-2 (unpaginated) (“1925(a) Op.”). On February 29, 2016, the 

trial court entered a consent order directing the receiver to make 

distributions of the funds resulting from the sale of the Mortgaged Premises 

to Enterprise, Frazier, and other interested third parties. The consent order 

also directed the parties to submit to the trial court proposed findings of fact 

and conclusions of law regarding whether the contract permitted recovery of 

Enterprise’s in-house counsel fees and, if so, whether the fees were 

reasonable. 

In its proposed findings of fact and conclusions of law, Enterprise 

offered its interpretation of the relevant language from the Loan Agreement, 

the Note, and the Mortgage. It also included its in-house counsel’s and inhouse paralegal’s billable rate and time entries. Enterprise asserted that 

these documents “clearly encompass [counsel] fees generated by in-house 

counsel.” Enterprise’s Proposed Findings of Fact and Conclusions of Law, 

3/10/16, ¶ 27. Specifically, regarding the language “hire or pay someone 

else,” Enterprise explained that it was “broad and not open to 

interpretation.” Id. ¶ 28. Enterprise further asserted that it “hired” inhouse counsel “to collect the debt and in this case, file a mortgage 

foreclosure” action. Id.
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Frazier, in contrast, argued that the language “hire or pay someone 

else” did not include “general counsel and vice president of Enterprise Bank, 

Joseph Fidler.” Frazier’s Proposed Findings of Fact and Conclusions of Law, 

3/10/16, ¶¶ 58, 61. Frazier understood this language as “clearly stat[ing] 

the intention of Enterprise Bank to ‘hire’ ‘someone else’ if needed.” Id. ¶ 

79. It claimed that because in-house counsel was in Enterprise’s employ 

prior to the execution of the loan documents, Enterprise “did not hire or pay 

‘someone else’ to recover any alleged obligation.” Id. ¶ 81. Frazier stated 

that at the very least, the language was ambiguous.1

On August 3, 2016, following the parties’ submissions, the trial court 

accepted Frazier’s interpretation of the language in question and therefore 

denied Enterprise’s request for counsel fees. Enterprise timely appealed to 

this Court. 

Enterprise raises the following issue on appeal: “Whether the Trial 

Court erred in concluding that Enterprise, as mortgagee[,] was not entitled 

to be reimbursed its in-house [counsel] fees and costs as provided for in 

loan documents executed by Frazier, as mortgagor?” Enterprise’s Br. at 4.

“Pennsylvania law embodies the American rule, per which there can be 

no recovery of [counsel] fees from an adverse party in litigation, absent 

____________________________________________

1

Frazier further pointed out that Enterprise obtained a receiver who 

retained outside counsel, and that Frazier paid the receiver’s counsel fees. 

See Consent Order, 2/29/16; Frazier’s Br. at 5.
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express statutory authorization, clear agreement by the parties, or some 

other established exception.” Doctor’s Choice Physical Med. & Rehab. 

Ctr., P.C. v. Travelers Pers. Ins. Co., 128 A.3d 1183, 1189 (Pa. 2015). 

Enterprise claims that the language in the loan documents covers payments 

to in-house counsel and, therefore, the contract serves as an exception to 

the American Rule. 

Because “a mortgage is a contract,” it is subject to principles of 

contract law. See Phila. Trust Co. v. Northumberland Cty. Traction 

Co., 101 A. 970, 974 (Pa. 1917). We have explained that “contract 

interpretation is a question of law” over which our standard of review is de 

novo. Miller v. Poole, 45 A.3d 1143, 1145 (Pa.Super. 2012) (quoting 

Ragnar Benson, Inc. v. Hempfield Twp. Mun. Auth., 916 A.2d 1183, 

1188 (Pa.Super. 2007)). Therefore, “this Court is not bound by the trial 

court’s interpretation” of a contract. Id. (quoting Ragnar, 916 A.2d at 

1188).

“When the words of an agreement are clear and unambiguous, the 

intent of the parties is to be ascertained from the language used in the 

agreement . . . .” Id. at 1146 (quoting LJL Transp., Inc. v. Pilot Air 

Freight Corp., 962 A.2d 639, 647 (Pa. 2009)). “[G]enerally, courts must 

give plain meaning to a clear and unambiguous contract provision unless to 

do so would be contrary to a clearly expressed public policy.” Allstate Fire 

and Cas. Ins. Co. v. Hymes, 29 A.3d 1169, 1172 (Pa.Super. 2011) 
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(quoting Prudential Prop. & Cas. Ins. Co. v. Colbert, 813 A.2d 747, 750 

(Pa. 2002)).

A contract provision is ambiguous when “it is reasonably susceptible 

[to] different constructions and capable of being understood in more than 

one sense.” Miller, 45 A.3d at 1146 (quoting Ins. Adjustment Bureau, 

Inc. v. Allstate Ins. Co., 905 A.2d 462, 468 (Pa. 2006)). “Where a 

provision of a [contract] is ambiguous, [it] is to be construed . . . against . . 

. the drafter of the agreement.” Prudential Prop. & Cas. Ins. Co. v. 

Sartno, 903 A.2d 1170, 1174 (Pa. 2006) (quoting Standard Venetian 

Blind Co. v. Am. Empire Ins. Co., 469 A.2d 563, 566 (Pa. 1983)). 

Further, when “an ambiguity exists, parol evidence is admissible to explain 

or clarify or resolve the ambiguity, irrespective of whether the ambiguity is 

patent, created by the language of the instrument, or latent, created by 

extrinsic or collateral circumstances.” Miller, 45 A.3d at 1146 (quoting Ins. 

Adjustment Bureau, Inc., 905 A.2d at 468).

Enterprise argues that the language “hire or pay someone else” 

unambiguously includes its “hiring” of its own in-house counsel and 

paralegal. Frazier, on the other hand, argues that “hire or pay someone 

else” unambiguously excludes in-house counsel and paralegal fees. In the 

alternative, Frazier contends that any ambiguity should be construed against 

Enterprise.
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The trial court found that the phrase “‘someone else’ . . . can be 

construed in a few different ways” and “none of the loan documents at issue 

define who ‘someone else’ is.” 1925(a) Op. at 5. The trial court further 

stated that because Enterprise drafted the loan documents, “any ambiguity 

should be construed against it.” Id. We agree.

After careful consideration, we conclude that the language “hire or pay 

someone else” is, at best, ambiguous. Frazier makes a strong case for the 

proposition that “someone else” necessarily means someone not then in 

Enterprise’s employ. Otherwise, the meaning of the term is difficult to 

discern. For example, does the use of other in-house staff to recover the 

debt, before the involvement of any attorneys, constitute the hiring by 

Enterprise of “someone else”? If so, then all of Enterprise’s employees 

would appear to be “someone else,” a particularly peculiar reading of the 

term.

Nevertheless, especially in the Loan Agreement, when the phrase “hire 

or pay someone else” is read in conjunction with the broad authorization of 

the collection of “Lender’s reasonable attorneys’ fees,” the phrase might 

plausibly be read to allow Enterprise to recover its in-house counsel fees. 

We therefore conclude that the language in the counsel fees’ provisions is 

ambiguous. As such, it must be construed against the drafter, Enterprise. 

See Prudential, 903 A.2d at 1174; Egyptian Sands Real Estate, Inc. v. 
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Polony, 294 A.2d 799, 803 (Pa.Super. 1972).2 Accordingly, the trial court 

properly denied Enterprise’s request for counsel fees.3

____________________________________________

2

In PNC Bank, N.A. v. Kimbrough & Assocs., LLC, by contrast, the 

loan document included language that specifically allowed the lender to 

recover the cost of in-house counsel and its staff.

We may hire or pay someone else to help us collect this 

account if you fail to pay in accordance with this 

Agreement. You agree to pay our collection costs 

(including, without limitation, the cost of in-house 

attorneys and staff), whether or not we hire anyone else 

to help us collect this account. This includes, subject to 

any limits under applicable law, our attorneys' fees and 

legal expenses whether or not there is a lawsuit . . . .

No. 6:13-CV-1558-orl-28KRS, 2015 WL 327533, at *12 (M.D. Fla. Jan. 23, 

2015) (emphasis added). 

3 Because we find the contract language ambiguous, and construe it 

against Enterprise, we need not reach the broader question, briefed by the 

parties, of whether a lender in Pennsylvania may recover for the work of 

salaried, in-house counsel. Compare Prison Legal News v. Stolle, 129 

F.Supp.3d 390, 398 (E.D. Va. 2015) (in-house counsel may recover fees for

“litigation tasks that ordinarily would have been performed by outside 

counsel,” but not “when merely acting as a liaison or corporate contact or 

representative”) (quotation omitted), and AMX Enterprises, L.L.P. v. 

Master Realty Corp., 283 S.W.3d 506, 517 (Tex. App. 2009) (holding 

successful claimant may recover in-house counsel fees); with Burger King 

Corp. v. Mason, 710 F.2d 1480, 1499 (11th Cir. 1983) (“[T]here is no 

Florida authority to justify, much less mandate, [counsel fees for the 

services of in-house counsel.]”), and In re Cummins Util., L.P., 279 B.R. 

195, 207 (Bankr. N.D. Tex. 2002) (denying motion for in-house counsel fees 

on the ground that “[t]his item should be included in . . . overhead”). See 

also Nicholas N. Nierengarten, Fee-Shifting: The Recovery of In-House 

Legal Fees, 39 Wm. Mitchell L. Rev. 227 (2012) (discussing the controversy 

over whether in-house counsel fees are recoverable). 

(Footnote Continued Next Page)
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Order affirmed.

Judgment Entered.

Joseph D. Seletyn, Esq.

Prothonotary

Date: 8/8/2017

(Footnote Continued) _______________________