Court Opinion

ID: 9399546
Source: CourtListenerOpinion
Date Created: 2023-06-05 16:12:45.64543+00
Date Added: 2024-06-11T17:19:30.672323
License: Public Domain

J-A11033-23

                                   2023 PA Super 95

    JOHN G. KING                               :   IN THE SUPERIOR COURT OF
                                               :        PENNSYLVANIA
                                               :
                v.                             :
                                               :
                                               :
    CHRISTOPHER P. DRISCOLL                    :
                                               :
                       Appellant               :   No. 1291 WDA 2022

                Appeal from the Order Entered October 14, 2022
       In the Court of Common Pleas of Allegheny County Civil Division at
                          No(s): No,. GD 21-004533

BEFORE: BENDER, P.J.E., STABILE, J., and PELLEGRINI, J.*

OPINION BY PELLEGRINI, J.:                                FILED: JUNE 5, 2023

        Christopher P. Driscoll (Driscoll) appeals from the order entered in the

Court of Common Pleas of Allegheny County (trial court) granting the petition

to enforce settlement filed by John G. King (King). The trial court determined

that the parties reached an enforceable agreement for Driscoll to sell King his

shares in the restaurant that they co-own because King’s attorney accepted a

“redlined” version of the agreement sent by Driscoll’s attorney. On appeal,

Driscoll argues that the trial court erred because both he and his attorney

testified at the evidentiary hearing that Driscoll never gave his attorney

express authority to settle the case without first obtaining the restaurant’s

application to receive funds under the Restaurant Revitalization Fund (RRF).

Because the trial court made no findings concerning whether Driscoll’s

____________________________________________

*   Retired Senior Judge assigned to the Superior Court.
J-A11033-23

attorney had express authority to enter into the agreement without his final

approval, we remand with instructions.

                                               I.

       Driscoll and King are each 50% owners of two LLCs that operate a

restaurant and its building in Bellevue near Pittsburgh. When their business

relationship soured, Driscoll wanted out of the business and asked King if he

would be willing to buy Driscoll’s membership shares. As a result, both parties

obtained counsel to negotiate the buy-out of Driscoll’s shares in March 2021.

King hired Attorney David Fuchs and Driscoll hired Attorney Daniel Conlon.

The two attorneys began negotiations in March 2021 but were unable to reach

an agreement. The negotiations resumed several weeks later in May 2021.1

During this round of negotiations, Attorney Conlon emailed Attorney Fuchs a

term sheet summarizing their negotiations and asked, “if we are in agreement

on all terms.” Attorney Fuchs responded by adding handwritten notes to the

term sheet, and Attorney Conlon incorporated those notes into another draft

that he sent to Attorney Fuchs a few days later. Attorney Fuchs emailed him

back with a “redlined”2 copy of the agreement “with mostly clarifications and

____________________________________________

1 In the interim, on April 28, 2021, King filed a four-count complaint against
Driscoll seeking monetary damages for breach of contract and fiduciary duties,
as well as declaratory relief that Driscoll have no interest in the LLCs or, in the
alternative, dissolution.

2 “Redlining” is defined in part as “[t]he process, usu[ally] automated, of
creating, for an existing document, an interim version that shows, through
(Footnote Continued Next Page)

                                           -2-
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a few details.” The next day, which was May 20, 2021, Attorney Conlon replied

that he accepted most of the changes and had “sent the agreement to Driscoll

for his review,” while also highlighting those changes in the draft that he did

not accept. Attorney Fuchs responded that same day: “Client has approved

your redline. Please get your client’s signature and send me a clean copy for

my client to sign.”

       Attorney Fuchs believed that they had an agreement but when Attorney

Conlon did not send him back a clean copy for King to sign, Attorney Fuchs

followed up with another email asking him to send a “clean version so we can

get this done.”       Again, however, there was no response.     Finally, when

Attorney Fuchs tried again a few weeks later, Attorney Conlon emailed him a

letter in which he asserted that “the parties have neither negotiated nor

reached a settlement agreement.” Attorney Conlon emphasized that he never

represented that they had reached a settlement agreement, noting that in his

last email, he wrote that he was sending the agreement to Driscoll for his

review. Attorney Conlon also claimed that during a May 21st phone call, he

told Attorney Fuchs that Driscoll needed a copy of the restaurant’s RRF

application before he would sign off on the agreement.

____________________________________________

strike-outs and other typographical features, all deletions and insertions made
in the most recent revision.” Redlining, Black’s Law Dictionary (8th ed. 2004).

                                           -3-
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       On June 16, 2021, King filed a petition to enforce settlement alleging

that the parties, through their attorneys, had reached an agreement on all

material terms despite never signing the agreement.         Because Driscoll

disputed that an agreement was reached, the trial court held an evidentiary

hearing.3    At the hearing, Attorney Conlon testified that he negotiated the

agreement on behalf of Driscoll but never had his express authority to agree

to the terms of the agreement without Driscoll’s final approval.     Attorney

Conlon also claimed throughout his testimony that Driscoll would not sign a

final agreement unless he first obtained the restaurant’s RRF application.

Driscoll reiterated the same as he continually claimed throughout his

testimony that Attorney Conlon could not finalize the agreement unless he

obtained the RRF application that King submitted on the restaurant’s behalf to

the Small Business Administration.

       Disputing that the RRF application was ever an integral part of the

negotiations, King emphasized that neither the term sheet nor the draft

agreements contained any mention about the application being an essential

term of the agreement. On top of that, King called an accountant as a witness

to show that the funds received from the SBA—$370,000—had to be used for

____________________________________________

3 See Brannam v. Reedy, 906 A.2d 635, 639 (Pa. Cmwlth. 2006) (“[T]he
existence of a settlement agreement requires an evidentiary hearing
whenever one party disputes the existence of an agreement or its binding
effect.”).

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operating expenses and could not be used to pay Driscoll. Consequently, King

characterized Driscoll’s claim concerning the RRF application as a misleading,

after-the-fact excuse for getting the agreement that he and Driscoll reached

through their attorneys’ extensive negotiations and exchange of term sheets

and draft agreements.

      On July 21, 2022, the trial court granted King’s petition to enforce

settlement. In its two-page memorandum explaining its reasoning, the trial

court did not address whether Attorney Conlon had Driscoll’s express authority

to finalize the agreement without first obtaining the RRF application. Rather,

the trial court concluded that, even though the agreement was never signed,

“[t]he accepted redline version in conjunction with the term sheet

establish[ed] the essential terms of the parties’ agreement.”         Trial Court

Opinion, 7/21/22, at unpaginated 2.

      Following the trial court’s decision, Driscoll timely moved for post-trial

relief under Pa.R.Civ.P. 227.1. King responded by reasserting his arguments

at trial but did not otherwise contend that Driscoll’s filing was improper. After

the motion was denied, Driscoll filed this appeal.

                                       II.

      Before addressing the merits of Driscoll’s claims, we address whether

we have jurisdiction over this appeal. After Driscoll filed his notice of appeal,

King moved to quash this appeal as untimely because Driscoll filed a motion

for post-trial relief rather than a notice of appeal after the trial court granted

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the petition to enforce settlement. Citing a note to Pa.R.Civ.P. 227.1(c)(2),

King observes that “[a] motion for post-trial relief may not be filed to matters

governed exclusively by the rules of petition practice.”     Asserting that his

petition fell under this rule, King points to this Court’s discussion in Bennett

v. Juzelenos, 791 A.2d 403 (Pa. Super. 2002), as directly on point:

      Our Supreme Court held in Coco Brothers, Inc. v. Board of
      Public Education of the School District of Pittsburgh, 608
      A.2d 1035 (1992), that post-trial motions were not required, or
      even permissible, from a trial court’s order disposing of a petition
      to enforce a judgment.       The Supreme Court held that the
      proceedings to enforce a judgment were clearly within the type of
      procedures described in the Note to Rule 227.1(c)(2). Similarly,
      we held in Kramer v. Schaeffer, 751 A.2d 241 (Pa. Super.
      2000), that no post-trial motions were required from a trial court’s
      decision on a motion to enforce a settlement. Although the trial
      court conducted a lengthy evidentiary hearing in Kramer, we
      concluded that the proceedings were not the type from which
      post-trial motions are required. Kramer, 751 A.2d at 244.

Bennett, supra at 405-06.         Thus, King argues that the trial court’s

evidentiary hearing was held under petition practice.

      Driscoll counters that the evidentiary hearing was a trial and that he

needed to file a post-trial motion to preserve his appellate issues. He also

disputes that the hearing was governed by petition practice simply because

King labeled his petition as such. For support, he notes that Pa.R.Civ.P. 206.1

defines a “petition” as either an application to strike or open or any other

application designated by local rule (which there was none).       Driscoll also

emphasized that King raised no objection to his post-trial motion in his

response.

                                     -6-
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      After review, we decline to quash. First, looking at the discussion from

Bennett, while our Supreme Court in Coco Brothers held that post-trial

motions “[are] not required, or even permissible” from a trial court’s order

disposing of a petition to enforce a judgment, the order here did not dispose

of a petition to enforce a judgment.     Rather, the trial court’s order here

disposed of a petition to enforce a settlement. As for Bennett and Kramer,

while both cases involved petitions to enforce a settlement, the procedural

posture of those cases concerned applications to quash for waiver of

reviewable issues based on the appellant’s failure to file a post-trial motion.

In both cases, we declined to quash. Here, in contrast, King asserts we must

quash because Driscoll’s notice of appeal is untimely, as no post-trial motions

were required or permitted from the trial court’s July 21, 2022 order. Thus,

neither Bennett nor Kramer are analogous.

      Second, we note that a panel of this Court dealt with a similar

jurisdictional issue in U.S. Home Corp. v Sinclair, 249 A.3d 1165, 2021 WL

653236 (Pa. Super. Feb. 19, 2021) (unpublished memorandum). There, after

the trial court granted a motion to enforce a settlement agreement, the

appellant filed a motion for post-trial relief that was denied. On appeal, the

panel noted that it did not appear that the appellant was required under Rule

227.1 to move for post-trial relief and should have instead appealed directly

from the trial court’s order resolving the motion to enforce settlement. See

U.S. Home Corp., supra at *3 n.3 (citing Bennett, supra). We also noted

                                     -7-
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that an unauthorized post-trial motion seldom tolls the appeal period. Id.

(citing Vietri ex rel. Vietri v. Delaware Valley High Sch., 63 A.3d 1281,

1288 (Pa. Super. 2013)).

       That said, we found the appellant’s filing of a post-trial motion rather

than a notice of appeal did not require that we quash its appeal as untimely.

As we explained:

       …as the propriety of [appellant’s] post-trial motion was not raised
       by the parties or lower court, Rule 227.1 is silent as to whether a
       post-trial motion is required in this case, and our precedent does
       not directly address the effect on the timeliness of an appeal
       where a party files a post-trial motion from a ruling on a motion
       to enforce a settlement agreement, we decline to quash U.S.
       Home’s appeal as untimely. Cf. Newman Development Group
       of Pottstown, LLC v. Genuardi’s Family Markets, Inc., 52
       A.3d 1233, 1247-48 (Pa. 2012) (holding that appellate court
       should not impose “the heavy consequence of waiver” on a party
       due to non-compliance with Rule 227.1 unless the applicability of
       Rule 227.1 to the particular circumstance is “apparent upon its
       face or, failing that, in clear decisional law construing the Rule”).

U.S. Home Corp., supra at *3 n.3.

       While U.S. Home Corp. is an unpublished memorandum, we find its

reasoning persuasive.4 First, like the appellee in that case, King raised no

objection to Driscoll’s motion for post-trial relief in his response to the motion,

waiting instead until Driscoll filed this appeal to raise any issue with the

propriety of the motion for post-trial relief. Second, it is unclear under Rule

____________________________________________

4  See Pa.R.A.P. 126(b) (providing that unpublished non-precedential
memorandum decisions of the Superior Court filed after May 1, 2019, may be
cited for their persuasive value).

                                           -8-
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227.1 whether a post-trial motion was required under these circumstances,

especially because the procedural posture of the cases that King relies on—

Bennett and Kramer—differ from that involved here. As there is unclear

decisional   law construing Rule     227.1 requiring quashal      under   these

circumstances, we will not quash Driscoll’s appeal.

                                     III.

      On appeal, Driscoll raises two main arguments for why the trial court

erred in concluding that the parties reached an agreement. First, he disputes

that the attorneys’ negotiations resulted in a binding, enforceable agreement.

In particular, he focuses on the May 20th email that Attorney Conlon sent to

Attorney Fuchs in response to the “redlined” draft of the agreement. In that

email, Attorney Conlon wrote that he accepted most of Attorney Fuchs’s

changes and that he was sending the agreement to Driscoll for his review.

Attorney Conlon, however, did not accept all of the changes, as he highlighted

those with which he did not agree. Driscoll contends that this email shows

not only that the attorneys had not yet agreed on all the necessary terms, but

also that he had not yet approved the agreement.

      Second, and related to the first part, Driscoll contends that he directed

Attorney Conlon to obtain a copy of the restaurant’s RRF application. Driscoll

asserts that this was an essential part of the parties’ negotiations and that he

would not give his final approval to any agreement unless he first obtained

and reviewed the application. Because he never received the application, he

                                     -9-
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never gave Attorney Conlon the express authority he would have needed to

finalize the agreement.5

       Our review of a trial court's decision to enforce a settlement agreement

is well-settled:

       When reviewing a trial court’s decision to enforce a settlement
       agreement, our scope of review is plenary as to questions of law,
       and we are free to draw our own inferences and reach our own
       conclusions from the facts as found by the court. However, we
       are only bound by the trial court’s findings of fact which are
       supported by competent evidence. The prevailing party is entitled
       to have the evidence viewed in the light most favorable to its
       position. Thus, we will only overturn the trial court’s decision
       when the factual findings of the court are against the weight of
       the evidence or its legal conclusions are erroneous.

Salsman v. Brown, 51 A.3d 892, 893–94 (Pa. Super. 2012) (citation

omitted).

       Settlement agreements are enforceable under Pennsylvania law even

without a writing.

       Where a settlement agreement contains all of the requisites for a
       valid contract, a court must enforce the terms of the agreement.
       McDonnell v. Ford Motor Co., ... 643 A.2d 1102, 1105 ( [Pa.
       Super.] 1994).... This is true even if the terms of the agreement
       are not yet formalized in writing. Mazzella v. Koken, ... 739
       A.2d    531,     536    (   [Pa.]    1999);    see     Commerce
       Bank/Pennsylvania v. First Union Nat. Bank, 911 A.2d 133,
       147 (Pa. Super. 2006) (stating “an agreement is binding if the
____________________________________________

5 Driscoll also argues that King admitted during his testimony at the
evidentiary hearing that the parties never reached an agreement and that this
constituted a judicial admission. However, as King points out, the full
exchange shows that King meant that the parties never signed the agreement,
not that the parties never reached an understanding of the terms of the
agreement. See N.T., 12/20/21, at 80.

                                          - 10 -
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      parties come to a meeting of the minds on all essential terms,
      even if they expect the agreement to be reduced to writing but
      that formality does not take place[ ]”). Pursuant to well-settled
      Pennsylvania law, oral agreements to settle are enforceable
      without a writing. Pulcinello[ v. Consolidated Rail Corp., 784
      A.2d 122, 124 (Pa. Super. 2001)] (citing Kazanjian v. New
      England Petroleum Corp., ... 480 A.2d 1153, 1157 ( [Pa.
      Super.] 1984)).

Mastroni-Mucker, supra at 517-18.

      However, while the settlement agreement need not be reduced to

writing, an attorney must still have authority to settle their client’s case.

Indeed, “[t]he ordinary employment of an attorney to represent a client with

respect to litigation does not confer upon the attorney the implied or apparent

authority to bind the client to a settlement or compromise, and the attorney

cannot do so in the absence of such express authority.” Baribault v. Zoning

Hearing Bd. Of Haverford Twp., 236 A.3d 112, 122 (Pa. Cmwlth. 2020)

(citations omitted).

      Our Supreme Court explained this unambiguous rule as follows:

      The law in this jurisdiction is clear and well-settled that an
      attorney must have express authority in order to bind a client to
      a settlement agreement. McLaughlin v. Monaghan, 290 Pa. 74,
      138 A. 79 (1927); Starling v. West Erie Ave. Bldg. & Loan
      Ass’n, 333 Pa. 124, 3 A.2d 387 (1939); Archbishop v. Karlak,
      450 Pa. 535, 299 A.2d 294 (1973); Rizzo v. Haines, 520 Pa. 484,
      555 A.2d 58, 66 (1989). The rationale for this rule stems from
      the fact that parties settling legal disputes forfeit substantial legal
      rights, and such rights should only be forfeited knowingly. See,
      e.g., Starling, 3 A.2d at 388 (“apparent or implied authority does
      not extend to unauthorized acts which will result in the surrender
      of any substantial right of the client, or the imposition of new
      liabilities or burdens upon him”). As such, a client’s attorney may
      not settle a case without the client’s grant of express authority,
      and such express authority can only exist where the principal

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      specifically grants the agent the authority to perform a certain
      task on the principal’s behalf. See Restatement (Second) of
      Agency § 7 cmt. c (1958).

Reutzel v. Douglas, M.D., 870 A.2d 787, 791-92 (Pa. 2005). As a result, “if

the existence of a settlement is in dispute because it is claimed that the

attorney lacked authority to bind his client, the attorney’s authority ... to bind

[his] client by way of agreement or compromise is not inferred, but must be

proven.”   Brannam v. Reedy, 906 A.2d 635, 640 (Pa. Cmwlth. 2006)

(internal citation omitted).

      In finding that the “[t]he accepted redline version in conjunction with

the term sheet establish[ed] the essential terms of the agreement,” the trial

court never resolved what was the main factual dispute at trial—whether

Attorney Conlon had Driscoll’s express authority to settle the case. While we

cannot say whether King proved that Attorney Conlon, in fact, possessed that

authority—indeed, that determination belongs to the trial court—there was

evidence at the evidentiary hearing that Driscoll never gave his attorney

authority to settle the case.

      As Driscoll highlights, that such authority was lacking is suggested by

the May 20th email that Attorney Conlon sent to Attorney Fuchs in response

to the “redline” draft of the agreement.       In that email, Attorney Conlon

indicated that he was sending the “redlined” draft of the agreement to Driscoll

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“for his review.”     R. 381.6    When asked about this email at trial, Attorney

Conlon confirmed that he had to keep Driscoll updated on any advancement

in the negotiations and forward him any drafts of settlement agreements. See

R. 246a.

        Indeed, throughout his testimony, Attorney Conlon asserted that he did

not have Driscoll’s express authority to settle without his approval.        When

asked why he drafted the agreements, he replied:

        I never got express authority to draft an – we were negotiating
        toward an agreement; we certainly were. And something that I
        did as counsel for Mr. Driscoll was to draft an agreement. I
        thought it was a way to move this forward.

R. 210a. Attorney Conlon answered similarly when asked why he prepared

the term sheet.

        Trying to make a deal, trying to show – isolate maybe those areas
        where we still need to discuss. And those we don’t need to discuss
        because we already discussed a lot, I’m trying to isolate them.
        Then, again, I did not have express authority to do this. I’m just
        trying to move the negotiations forward.

R. 216a.

        For his part, Driscoll confirmed much the same when he testified.

        Q. Was Mr. Conlon authorized to negotiate a potential deal on
        your behalf?

        A. Yes, he was.

        Q. Did he, in fact, that you’re aware of, work to negotiate a
        potential deal on your behalf?

____________________________________________

6   For ease of reference, we refer to the reproduced record.

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     A. Yes, he did.

     Q. Was he required to communicate with you throughout these
     negotiations the details of any deal he attempted to negotiate on
     your behalf?

     A. Yes, he was.

     Q. Did he, in fact, do so?

     A. Yes.

     Q. Was he required to present draft documentation to you for
     your review throughout these negotiations?

     A. Yes, he was.

     Q. Did he, in fact, do so?

     A. Yes.

     Q. Was your express approval required for any agreements
     negotiated by Mr. Conlon on your behalf?

     A. Yes, it was.

     Q. And did you tell him that he needed your express approval
     before he could agree to any deals on your behalf?

     A. Yes, I did.

     Q. Did you ever grant Mr. Conlon authority to enter into a
     settlement agreement on your behalf without your express
     approval?

     A. No, I did not.

     Q.   Did you ever grant Mr. Conlon authority to sign any
     agreements, settling agreements or other, on your behalf without
     your express approval?

     A. No, I did not.

R. 312a-313a.

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     Driscoll was likewise unequivocal throughout his testimony that

obtaining the restaurant’s RRF application was a condition precedent to him

signing off on any agreement negotiated by Attorney Conlon. For example:

     Q. And did you communicate to your counsel that you felt it was
     something necessary for the negotiations in this matter for you to
     see that RRF application?

     A. Yes.

     Q. Did you communicate to your counsel that that RRF application
     was something you needed to see in order to progress or conclude
     any settlement negotiations?

     A. Yes, I did.

R. 315a.

     When asked the same about the May 20th version of the agreement that

Attorney Conlon sent him, Driscoll testified that he would not agree to bound

by the agreement unless he first saw the RRF application.

     Q. Did you accept the terms of this version of the membership
     interest purchase agreement?

     A. No, I did not.

     Q. Why not?

     A. Because we still had not received the RRF application.

     Q. As of May 20, 2021, now almost three weeks after the
     application was submitted, had you or your counsel received a
     copy of it?

     A. No, we had not. Did not.

     Q. Did you ever provide Mr. Conlon, at that point in time, with
     the express authority to accept [the May 20, 2021] draft of the
     membership interest purchase agreement attached to Exhibit 8?

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      A. No, I did not.

R. 319a. This was not an insignificant matter because it resulted in $370,000

coming into the business.

      To recap, before it could conclude that the attorneys’ negotiations led

to an agreement, the trial court needed to first find that Attorney Conlon had

Driscoll’s express authority to bind his client to the terms of the agreement

without first getting Driscoll’s final approval. As part of such a finding, the

trial court would have also needed to discredit Attorney Conlon’s and Driscoll’s

claims that Driscoll being provided a copy of the RRF application was a

condition precedent to any final agreement.         As the above sampling of

evidence shows, both Attorney Conlon and Driscoll unequivocally denied that

such express authority was ever given.        Unless King proved that Attorney

Conlon in fact had such authority, then the trial court erred in finding that the

parties, through merely the attorneys’ exchange of drafts and negotiations,

bound their clients to the agreement.

      Accordingly, because this was a factual question to be resolved by the

trial court, we will remand this matter for the trial court to determine within

60 days of the date of this memorandum whether King sustained his burden

in proving that Attorney Conlon had express authority to settle the case

though his negotiations with Attorney Fuchs.

      Order reversed.     Case remanded with instructions.     Motion to quash

denied. Jurisdiction retained.

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