Court Opinion

ID: 4288648
Source: CourtListenerOpinion
Date Created: 2018-06-26 20:03:21.8797+00
Date Added: 2024-06-11T14:37:16.590797
License: Public Domain

J-A10040-18

NON-PRECEDENTIAL DECISION - SEE SUPERIOR COURT I.O.P. 65.37

 CHARLES B. CALKINS, AS PERSONAL :           IN THE SUPERIOR COURT OF
 REPRESENTATIVE OF THE ESTATE OF :                PENNSYLVANIA
 FRANK MARTZ HENRY, JR.          :
                                 :
                                 :
           v.                    :
                                 :
                                 :
 JUSTIN WOLK, D.D. DOBBS, LLC,   :           No. 2211 EDA 2017
 D.E. DOBBS, LLC, RDJD           :
 RESTAURANT HOLDINGS, LLC,       :
 ROBERT DAMERJIAN, THE           :
 DAMERJIAN GROUP, LLC, AND       :
 TUSCANY EQUITIES, LLC           :
                                 :
                 Appellants

             Appeal from the Judgment Entered June 12, 2017
    In the Court of Common Pleas of Philadelphia County Civil Division at
                      No(s): July Term, 2013 No. 770

BEFORE:    GANTMAN, P.J., McLAUGHLIN, J., and RANSOM*, J.

MEMORANDUM BY RANSOM, J.:                             FILED JUNE 26, 2018

      Appellants -- Justin Wolk (“Mr. Wolk”); D.D. Dobbs, LLC (“D.D.”); D.E.

Dobbs, LLC (“D.E.”) (D.D. and D.E. hereinafter collectively “the Dobbs LLCs”);

RDJD Restaurant Holdings, LLC; Robert Damerjian (“Mr. Damerjian”); The

Damerjian Group, LLC (“Damerjian Group”); and Tuscany Equities, LLC

(“Tuscany”) -- appeal from the judgment entered June 12, 2017, in favor of

Appellee Charles B. Calkins, as personal representative of the Estate of

Frank Martz Henry, Jr., and derivatively on behalf of D.D., and against

Appellants jointly and severally in the amount of $151,410, plus interest at

the statutory rate of 6%, plus counsel fees and costs in the amount of
____________________________________
* Retired Senior Judge assigned to the Superior Court.
J-A10040-18

$21,900.93.       At the time the judgment was entered, the trial court also

granted Appellants’ motion for post-trial relief in part, struck delay damages,

and     ordered       that    monies    that    had     been     placed    in   escrow    by

Frank Martz Henry, Jr. (“Mr. Henry”), pending the outcome of this action, were

to be included in the $151,410 judgment. We affirm.

        This action arises from a dispute amongst individuals who had an

ownership interest in The Legendary Dobbs (“the Bar”), a former bar and

restaurant that had been located at 304 South Street in Philadelphia. The Bar

“rented the physical premises and its own value was based on its liquor

license, its goodwill and recreation, its location and its profitability.” Findings

of Fact & Conclusions of Law (“FOF & COL”), 1/27/17, at 1 ¶ 2; see also Trial

Court Opinion (TCO), 10/3/17, at 1.

        The Bar’s liquor license was wholly owned by D.E., which had been

formed in May 2010. Appellee’s Ex. 4 (JW-4); FOF & COL at 1-2 ¶¶ 1-3. Prior

to September 21, 2010, the ownership of D.E. was divided as follows:

       Damerjian Group owned 51% of D.E.;
          o Damerjian Group was owned by Mr. Damerjian and Tuscany;
                      Tuscany was wholly owned by Mr. Wolk;1
       D.D. owned 49% of D.E.;
          o D.D.        was     owned     in    equal    parts    by      Mr.   Henry    and
              Harry Schlacterman (“Mr. Schlacterman”).

____________________________________________

1 Similar to the transitive property in mathematics,
if “Damerjian Group = Mr. Damerjian + Tuscany” and “Tuscany = Mr. Wolk,”
then “Damerjian Group = Mr. Damerjian + Mr. Wolk.” See TCO at 2.

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Id. at 2 ¶ 3; TCO at 2.

       The individuals who owned D.E., as of September 21, 2010, by

percentage, thus were:

             Mr. Damerjian owned 25.5%;

             Mr. Henry owned 24.5%;

             Mr. Schlacterman owned 24.5%;

             Mr. Wolk owned 25.5%.

FOF & COL at 3 ¶ 7.

       On September 29, 2010, Mr. Henry assigned his 50% interest in D.D.

to D.E. in exchange for a loan of $20,000. According to Paragraph 3 of their

agreement (“Assignment Agreement”),2 if Mr. Henry repaid the loan within

two years, his ownership interest would be returned to him. Appellee’s Ex. 8

(JW-7) (D.E. would “take all steps necessary to restore [Mr.] Henry to his full

membership in D.D. [] as it existed prior to the execution of” the Assignment

Agreement); FOF & COL at 3 ¶¶ 8-9. Mr. Henry repaid the entire $20,000

prior to the due date.

       However, in the meantime, Mr. Damerjian and Mr. Wolk, acting on

behalf of D.E., sold an interest in D.D. to Evans Capital Group for $200,000.

____________________________________________

2 Mr. Henry, Mr. Schlachterman, and Mr. Wolk signed the Assignment
Agreement: Mr. Henry as an individual; Mr. Schlacterman as both an
individual and on behalf of D.D.; and Mr. Wolk on behalf of D.E. Appellee’s
Ex. 8 (JW-7).

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Notes of Testimony (N. T.), 6/21/16, at 12-13.3 Mr. Henry hence could not

be restored to the position that he was in before he temporarily assigned his

interest in D.D. to D.E. Mr. Henry therefore initiated the current action in July

2013. TCO at 3.

       In the complaint, [Mr.] Henry brings the following claims:
       Count I, Breach of Fiduciary Duty against [Mr.] Wolk and
       [Mr.] Schlacterman; Count II, Breach of Contract against
       [Mr.] Schlacterman [and the Dobbs LLCs]; Count III, Intentional
       Interference with a Contractual Relationship against [Mr.] Wolk,
       [Mr.] Damerjian, RDJD Restaurant Holdings, LLC, [] Damerjian
       Group [], and Tuscany . . .; Count IV, Civil Conspiracy against all
       defendants; Count V, Conversion, derivatively on behalf of D.D.[]
       and against [Mr.] Wolk, [Mr.] Schlacterman, D.E.[], RDJD
       Restaurant Holdings, LLC, [Mr.] Damerjian, [] Damerjian Group
       [], and Tuscany[.]

Id. at 4; accord Compl., 7/2/13, at 12-18 ¶¶ 48-76.

       Pursuant to Count II for breach of contract, the complaint alleged:

“Defendants have breached the terms of the Assignment Agreement by both

substantially dissipating the assets and funds of D.D.[], and altering the

corporate structure of D.D.[].” Id. at 14 ¶ 56. Under Count III for intentional

interference with a contractual relationship (“intentional interference”), after

incorporating all previous paragraphs, id. at 15 ¶ 59, the complaint stated:

       [Mr.] Wolk, [Mr.] Damerjian, RDJD Restaurant Holdings, []
       Damerjian Group, and Tuscany . . . intentionally interfered with
       the performance of the Assignment Agreement by encouraging,
       cajoling, facilitating, and assisting [Mr.] Schlachterman, D.D.[],
       and D.E.[] in performing the following activities:

____________________________________________

3Mr. Wolk testified that the sale to Evans Capital Group “netted $180,000”,
but Mr. Damerjian testified that he received $190,000 from Evans Capital
Group. Compare N. T., 6/21/16, at 12 with N. T., 6/22/16, at 34-35.

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          a. Dissipating the funds and assets of [the Dobbs LLCs];

          b. Manipulating the corporate structure and activities of
          [the Dobbs LLCs];

          c. Making improper payments from [the Dobbs LLCs] to
          unauthorized third parties;

          d. Causing [the Dobbs LLCs] to use corporate funds and
          assets in ways that benefitted Defendants’ personal
          interests at the expense of [the Dobbs LLCs]; and,

          e. Hiding, obscuring, and otherwise making prohibited
          transactions difficult and burdensome to detect.

Id. at ¶ 61.     In response to both Paragraph 56 and 61 of the complaint,

Appellants answered: “The averments of this paragraph are a conclusion of

law to which no responsive averment is possible.”     Answer & New Matter,

10/15/13, at ¶¶ 56, 61.

       The $20,000 repaid by Mr. Henry was placed into escrow, pending the

outcome of the case. Appellee’s Ex. 42; FOF & COL at 4 ¶ 10.

       In early 2014, “the business” was sold to Ninjabull Holdings and

Nina Rumpff for an “expected” payment of $418,000. N. T., 6/21/16, at 88;

accord Appellee’s Exs. 23 (JW-20) to 26 (JW-23).4        Mr. Damerjian later

testified the he did not receive anything from this sale but could not produce

a statement as to how the funds from this sale were allocated or distributed.

N. T., 6/22/16, at 35, 37-38, 47.

       In February 2014, the trial court granted Mr. Henry’s motion to compel

Appellants to comply with discovery requests. Order, 2/4/14. In March 2014,

____________________________________________

4During his testimony, Mr. Wolk did not clarify what entity he meant by “the
business.” N. T., 6/21/16, at 88.

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Mr. Henry filed a motion for sanctions for Appellants’ failure to comply with

the February order, which the trial court granted.      Mr. Henry’s Mot. for

Sanctions, 3/11/14; Order, 3/26/14.     In April 2014, the trial court found

continuing non-compliance with its order; it thus ordered Mr. Damerjian and

Mr. Wolk to appear in court. Order, 4/22/14. At the hearing in May 2014,

Appellants’ counsel requested and was granted leave to withdraw; Appellants

were granted a temporary stay to find new counsel. Order, 5/13/14. After

the stay was lifted, in October 2014, Mr. Henry sent Appellants a request for

admissions. In December 2014, Mr. Henry filed another motion for sanctions,

Mr. Henry’s Mot. for Sanctions, 12/1/14, and the trial court ordered

Mr. Damerjian and Mr. Wolk to pay $8,000 “for failure to comply with prior

discovery orders.”   Order, 12/19/14.     In February 2015, Mr. Henry filed

another motion to compel answers to discovery requests, Mr. Henry’s Mot. to

Compel Appellants’ Answers to Interrogs. & Resps. to Req. for Produc. of Docs.

– Second Set, 2/19/15, which the trial court granted in March 2015. Order,

3/3/15. Mr. Henry then filed another motion for sanctions, which the trial

court granted, ordering Mr. Damerjian and Mr. Wolk to pay $500 per day

beginning April 3, 2015, until all discovery requests were answered.

Mr. Henry’s Mot. for Sanctions for Failure to Comply with the Ct.’s Order of

Mar. 3, 2015, & Respond to Mr. Henry’s Interrogs. & Req. for Produc. of Docs.

– Second Set, 3/17/15; Order, 3/31/15.

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      Mr. Henry died in October 2015.          “Charles B. Calkins, as Personal

Representative of the Estate of Frank Martz Henry, Jr. was substituted as

plaintiff on November 13, 2015.” TCO at 4.

      “This case was tried as a nonjury trial commencing June 20, 2016 and

concluding on June 22, 2016.” Id. Appellee presented the expert testimony

of Francis Charles Musso (“Mr. Musso”), a certified public accountant and

business consultant, who is certified in financial forensics, with a master’s

degree in public administration.      Appellee’s Ex. 40.   Mr. Musso provided a

valuation for the Bar of $1,189,500 to $1,391,500, despite the fact that

Appellants had “never provided any of the financial information [that he] had

requested orally or in writing.”       N. T., 6/20/16, at 51-52, 111; accord

Appellee’s Ex. 41; see generally N. T., 6/20/16, at 95-198; see also

Appellee’s Pre-trial Statement, 11/20/15, at § B. For example, D.E. “had no

inventory.   Not in the books and records. . . . It is very unusual.”         N. T.,

6/20/16, at 117.

      “Evidence    at   trial   specifically   showed   that   [Mr.]   Wolk     and

[Mr.] Damerjian repeatedly used a D.E.[] titled credit card to charge personal

expenses and their explanations in court were not satisfactory [to the trial

court].” TCO at 2. With the credit card in D.E.’s name, Mr. Wolk purchased

jewelry worth $2,000 and a “Beachbody” fitness program, paid between $500

and $2,000 for meals at another sports bar, paid $2,340.07 in parking

violation fees, and charged stays in Las Vegas and entertainment expenses

that “didn’t have anything to do with the business.” N. T., 6/21/16, at 49, 51,

                                        -7-
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60-61, 68; Appellee’s Exs. 10 (JW-10) to 12 (JW-12). Mr. Damerjian charged

to the corporate credit card: unrelated travel expenses, a gym membership,

and tickets from Ticketmaster. N. T., 6/22/16, at 6-9, 15-17; Appellee’s Exs.

9 (JW-9) & 11 (JW-11).

      “Additionally, the D.E.[] credit card was used to pay business expenses

of [] Damerjian Group[.] These charges were unrelated to the [Bar].” TCO

at 3. Mr. Damerjian charged unrelated construction for Damerjian Group to

D.E.’s corporate credit card. N. T., 6/22/16, at 6-9, 15-17. Furthermore,

checks for a total of $90,000 were written from D.E.’s business account to

Mr. Damerjian    for   other    undocumented      “construction”    expenses;

Mr. Damerjian was unable to produce any invoices or receipts. N. T., 6/21/16,

at 188-89.

      “Both [Mr.] Damerjian and [Mr.] Wolk used personal checks to cover

business expenses of Dobbs.” TCO at 3. Mr. Damerjian and Mr. Wolk paid

bills for the corporate credit card with funds from their respective personal

bank accounts. N. T., 6/21/16, at 97. Mr. Wolk also testified that he and

Mr. Damerjian continuously lent money to the Bar to keep it in business. Id.

at 108-09.

      During Mr. Wolk’s testimony, the trial court broached the concept of

piercing the corporate veil: “LLCs are corporations that have particular rights

. . . unless you want to have a corporate veil pierced.” Id. at 146. On the

                                     -8-
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final day of trial, Appellee’s counsel stated: “[O]ur point here [is] that they

are not respecting the corporate [form].”5 N. T., 6/22/16, at 226.

       “After reviewing transcripts, [the trial court] entered Findings of Fact

and Conclusions of Law on January 27, 2017 and awarded $151,[41]0.00 in

favor of [Appellee].” TCO at 4. In the Findings of Fact, the trial court stated

that it “pierce[d] the corporate veils” of Damerjian Group, Tuscany, and D.E.

FOF & COL at 3 ¶ 7. The trial court further found that “the absence of verifiable

financial records renders speculative the valuation ranges of [Appellee’s]

expert[.]” Id. at ¶ 15. Instead, the trial court “accept[ed] the testimony of

[Mr.] Wolk and [Mr.] Damerjian that they sold [D.E.’s] assets to Evans Capital

Group and Nina Rumpff for $200,000 and $418,000 respectively.” Id. at 4-5

¶ 15. The trial court added these amounts together, for a total value for the

Bar of $618,000. Mr. Henry’s ownership interest in the Bar was 24.5%. Id.

at 5 ¶ 17. Twenty-four-and-one-half percent of $618,000 is $151,410 – i.e.,

the amount of damages awarded by the trial court.

       Paragraph 15 of the Conclusions of Law stated:

       Therefore, based on the percentage share [Mr. Henry] owned of
       [D.E.] as of September 21, 2010 and the sales prices accepted by
       this [trial] court, [Mr. Henry] is awarded $151,410, plus delay
       damages, plus interest, plus a sanctions award to be determined,
       from all defendants jointly and severally, excluding RDJD
       Restaurant Holdings, which was not an owner of [D.E.] at times
       relevant to this dispute, and also excluding Harry Schlacterman

____________________________________________

5 The notes of testimony state “ . . . not respecting the corporate forum.”
N. T., 6/22/16, at 226 (emphasis added). We believe that “forum” is a
typographical error and have correct it to “form.”

                                           -9-
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      who was dismissed from this case upon grant of his motion for
      non-suit following the completion of trial evidence.

Id. at 8-9 ¶ 15.

      Defendants [Mr.] Wolk, [Mr.] Damerjian, D.D.[], D.E.[], []
      Damerjian Group, [] and Tuscany . . . filed post-trial motions on
      February 6, 2017. After oral argument, [the trial court] granted
      [Appellants’] post-trial motion in part and denied it in part. [The
      trial court’s] post-trial Order [dated June 9, 2017, and] docketed
      on June 12, 2017, struck the delay damages award from
      paragraph 15 of the Conclusions of Law, and clarified
      [P]aragraph 10 of our Findings of Fact to explain that the $20,000
      originally tendered by [Mr.] Henry to D.E.[] and held in escrow is
      a part of the total $151,[41]0.00 awarded to [Appellee] at
      Conclusions of Law [P]aragraph 15. [Appellants’] remaining
      requests for relief were denied.

TCO at 4. The order stated: “JUDGMENT IS ENTERED in favor of plaintiff

Charles B. Calkins, as Personal Representative of the Estate of Frank Martz

Henry, Jr. and derivatively on behalf of D.D. Dobbs, LLC[.]” Order, 6/12/17.

      In July 2017, Appellants timely filed a notice of appeal. The trial court

did not order and Appellants did not file a statement of matters complained of

on appeal pursuant to Pa.R.A.P. 1925(b).

      Appellants now raise the following issues on appeal:

      1.     Where neither the Complaint, nor [Appellee]’s Pre-Trial
      Statement raised the issue of piercing the corporate veil, and
      where [Appellants] had no notice that the issue was being litigated
      at trial, did the trial court err in concluding, on the basis of piercing
      the corporate veil, that [Appellants] who were not parties to a
      contract were nevertheless liable for the breach of that contract?

      2.    Did the trial court err in awarding damages against
      [Appellants] utilizing a calculation of the value of [Appellee]’s
      ownership interest in D.D.[] in the absence of substantial credible
      evidence to support the valuation?

Appellants’ Brief at 3 (trial court’s answers omitted).

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     We review an order following a bench trial with the following
     principles in mind:

     Our review in a nonjury case is limited to whether the findings of
     the trial court are supported by competent evidence and whether
     the trial court committed error in the application of law. We must
     grant the court’s findings of fact the same weight and effect as
     the verdict of a jury and, accordingly, may disturb the nonjury
     verdict only if the court’s findings are unsupported by competent
     evidence or the court committed legal error that affected the
     outcome of the trial. It is not the role of an appellate court to pass
     on the credibility of witnesses; hence we will not substitute our
     judgment for that of the factfinder. Thus, the test we apply is not
     whether we would have reached the same result on the evidence
     presented, but rather, after due consideration of the evidence
     which the trial court found credible, whether the trial court could
     have reasonably reached its conclusion.

Mark Hershey Farms, Inc. v. Robinson, 171 A.3d 810, 814–15 (Pa. Super.

2017) (citation omitted) (some formatting added).

                       Piercing the Corporate Veil

     Appellants first contend that the trial court erred by “piercing the

corporate veil and holding non-parties to the assignment agreement liable for

its breach where the issue was not raised in the pleadings or at trial.”

Appellants’ Brief at 11. Appellant argue that they hence “did not have notice

or opportunity to defend.” Id.

     “Piercing the corporate veil is a means of assessing liability for the acts

of a corporation against an equity holder in the corporation.” Hanrahan v.

Audubon Builders, Inc., 614 A.2d 748, 752 (Pa. Super. 1992) (citation

omitted).

     Pennsylvania carries a strong presumption against piercing the
     corporate veil. The corporate entity should be upheld unless
     specific, unusual circumstances call for an exception.

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      Further, when it is appropriate to pierce the corporate veil, it is
      the shareholder . . . who is held liable[.] . . .

      In deciding whether to pierce the corporate veil, courts are
      basically concerned with determining if equity requires that the
      shareholders’ traditional insulation from personal liability be
      disregarded and with ascertaining if the corporate form is a sham,
      constituting a facade for the operations of the dominant
      shareholder.

Mark Hershey Farms, 171 A.3d at 816 (emphasis omitted) (citations

omitted) (some formatting added). “[T]here appears to be no clear test or

well settled rule in Pennsylvania as to exactly when the corporate veil can be

pierced and when it may not be pierced.” Advanced Tel. Sys., Inc. v. Com-

Net Prof'l Mobile Radio, LLC, 846 A.2d 1264, 1278 (Pa. Super. 2004)

(citation omitted) (some formatting added). However, some of the factors to

consider are:    “whether corporate formalities have been observed and

corporate records kept, whether officers and directors other than the dominant

shareholder himself actually function, and whether the dominant shareholder

has used the assets of the corporation as if they were his own.”            Mark

Hershey Farms, 171 A.3d at 816 (citation omitted).

                                  Mootness

      This issue is moot, because Appellants have not also appealed the trial

court’s finding that each of the Appellants who was not a party to the contract

was further liable to Appellee for intentional interference.   The trial court

specifically held that, with regard to this intentional interference claim,

Appellee “is entitled to the same damages as determined for Count II” – i.e.,

breach of contract. FOF & COL at 6 ¶ 6. In other words, as the trial court

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found Mr. Damerjian and Mr. Wolk6 each personally liable under the intentional

interference claim in Count III for the “same damages as determined for

Count II” for breach of contract, and as Appellants have not appealed the

damages awarded by the trial court pursuant to Count III, Appellants’ first

issue on appeal regarding piercing the corporate veil is moot. See, e.g., First

Lehigh Bank v. Haviland Grille, Inc., 704 A.2d 135, 138 (Pa. Super. 1997)

(“because the jury awarded identical damages for fraud as it did for breach of

contract, we need not determine whether the evidence is sufficient to support

the finding of both”).

                                          Notice

       Assuming that this challenge were not moot, Appellants’ contention that

they “did not have notice” that the corporate veil may be pierced and did not

have the “opportunity to defend” against piercing the corporate veil is

contradicted by the record. Appellants’ Brief at 11. Albeit the complaint did

not explicitly mention “piercing the corporate veil,” it included multiple specific

factual averments that would serve as the basis for piercing the corporate veil.

The complaint repeatedly asserted that Appellants had dissipated the assets

and funds of the Dobbs LLCs. Compl., 7/2/13, at 14-15 ¶¶ 56, 61a. The

complaint also maintained that Appellants: “alter[ed]” and “manipulate[ed]”

____________________________________________

6 The other parties held liable for the intentional interference claim were:
RDJD Restaurant Holdings, LLC; Damerjian Group; and Tuscany. Compl.,
7/2/13, at 15-16.

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the “corporate structure and finances of D.D.”; made “improper payment”

from the Dobbs LLCs “to unauthorized third parties”; caused the Dobbs LLCs

“to use corporate funds and assets in ways that benefited [Appellants’]

personal interests at the expense of” the Dobbs LLCs; and “hid[], obsur[ed],

and otherwise ma[de] prohibited transactions difficult and burdensome to

detect.” Id. at ¶¶ 56, 61b-61e. In addition, Appellants effectively admitted

each of these factual allegations by pleading in response: “The averments of

this paragraph are a conclusion of law to which no responsive averment is

possible.” Answer & New Matter, 10/15/13, at ¶¶ 56, 61. Appellants cannot

now argue that they were not on notice of the factual underpinnings of the

veil-piercing theory. See Vill. at Camelback Prop. Owners Ass’n v. Carr,

538 A.2d 528, 535 (Pa. Super. 1988) (“reading the complaint as a whole, . . .

appellant has sufficiently pleaded the ultimate facts necessary to pierce the

corporate veil”).

      In addition to the notice provided by the factual averments in the

complaint, Appellants also had notice that Appellee was seeking facts

necessary to pierce the corporate veil, because Appellee sought discovery

directly related to the veil-piercing theory.   Appellee issued requests for

admissions that: each of the Appellants misappropriated corporate funds; the

Dobbs LLCs never held meetings, maintained minutes, or kept records of their

members’ capital accounts; there were no books or records demonstrating

authority for withdrawal and transfer of any of the Dobbs LLCs’ funds; there

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were no records reflecting purported loans between Appellants; Appellants did

not keep their finances separates from the Dobbs LLCs; and the individual

Appellants participated in the destruction of the relevant business records.

Mr. Henry’s Mot. for Sanctions, 12/1/14, Ex. “I,” Appellee’s Req. for Admiss.

Directed to Appellants, 10/31/14, at 4-11 ¶¶ 9-33; see Mark Hershey

Farms, 171 A.3d at 816.

      Moreover, during the trial, Appellee’s counsel explicitly stated that

Appellee’s intention was to demonstrate that Appellants were “not respecting

the corporate [form],” and the trial court itself cautioned that the corporate

veil might be pierced. N. T., 6/21/16, at 146; N. T., 6/22/16, at 226.

      Thus, due to the factual averments in the complaint, the requested

admissions during discovery, and the statements of Appellee’s counsel and

the court during trial, Appellants cannot now allege that they had no notice of

and were caught unawares by the trial court’s decision to pierce the corporate

veil. See Appellants’ Brief at 11; see also Compl., 7/2/13, at 14-15 ¶¶ 56,

61; Mr. Henry’s Mot. for Sanctions, 12/1/14, Ex. “I,” Appellee’s Req. for

Admiss. Directed to Appellants, 10/31/14, at 4-11 ¶¶ 9-33; N. T., 6/21/16, at

146; N. T., 6/22/16, at 226.

                   Propriety of Piercing the Corporate Veil

      If we were to consider the appropriateness of the trial court’s decision

to pierce the corporate veil, we would begin by noting that, here, the trial

court pierced the corporate veil under the “alter ego” theory. TCO at 2. “The

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alter ego theory is applicable where the individual or corporate owner controls

the corporation to be pierced and the controlling owner is to be held liable.”

Good v. Holstein, 787 A.2d 426, 430 (Pa. Super. 2001) (citation omitted).

“The alter ego theory is available whenever one party seeks to hold the

corporation owner liable for any claim or debt.” Advanced Tel. Sys., 846

A.2d at 1278 (citation and internal brackets omitted). “[T]he alter ego theory

which requires proof (1) that the party exercised domination and control over

corporation; and (2) that injustice will result if corporate fiction is maintained

despite unity of interests between corporation and its principal.” Allegheny

Energy Supply Co., LLC v. Wolf Run Mining Co., 53 A.3d 53, 58 n.7 (Pa.

Super. 2012) (citation omitted).

      In the current action, we agree with the trial court that, for both

Damerjian Group and Tuscany, equity required that the traditional insulation

of the shareholders – in the current action, Mr. Damerjian and Mr. Wolk,

respectively – from personal liability be disregard, because the corporate

forms were shams, constituting facades for the operations of their

corresponding dominant shareholders. See Mark Hershey Farms, 171 A.3d

at 816. Both Mr. Damerjian and Mr. Wolk continuously ignored the requisite

separation between their personal assets and corporate funds. Both charged

personal expenses to a credit card in the name of D.E. N. T., 6/21/16, at 49,

51, 60-61, 68; TCO at 2. Mr. Damerjian also used the D.E. credit card to pay

business expenses for Damerjian Group that were unrelated to D.E. N. T.,

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6/22/16, at 6-9, 15-17; TCO at 3. Mr. Damerjian and Mr. Wolk also both used

personal checks to pay for business expenses for D.E. N. T., 6/21/16, at 97;

TCO at 3. Furthermore, Mr. Damerjian wrote checks from the D.E. business

bank account to himself for unrelated and undocumented “construction”

expenses. N. T., 6/21/16, at 188-89.

      We thus conclude that the findings of the trial court are supported by

competent evidence and that the trial court did not commit an error in the

application of the law when it pierced the corporate veils of Damerjian Group

and of Tuscany because the dominant shareholders of both corporations --

Mr. Damerjian and Mr. Wolk, respectively -- failed to observe corporate

formalities and used the assets of their corresponding corporations (as well as

those of D.E.) as if they were their own. See Mark Hershey Farms, 171

A.3d at 814–16.

                                  Valuation

      Next, Appellants maintain that, when “awarding damages against”

them, the trial court erred by using “a calculation of the value of [Appellee]’s

ownership interest in D.D.[] that was not advanced by [Appellee], not

disclosed prior to or during the trial, and not support[ed] by substantial

evidence.” Appellants’ Brief at 16. Appellants contend that they “were placed

on notice that [Appellee]’s damages theory would be based upon Mr. Musso’s

valuation approach as set forth in his expert report” and take issue with the

trial court’s conclusion that “Mr. Musso’s valuation opinion was too

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speculative.” Id. at 17, 20 (citing FOF & COL at 4 ¶ 15).7 Appellants insist

that the damages award was instead “cobbled together” by the trial court. Id.

at 16.

         The trial court determined that the value of the Bar “was based on its

liquor license, its goodwill and recreation, its location and its profitability.”

FOF & COL at 1 ¶ 2; see also TCO at 1. The trial court stated: “Having

chronically intermingled [D.E.]’s funds for personal use and for other

Damerjian Group[] business projects, both [Mr. Damerjian and Mr. Wolk]

purposely tried to obscure the true value of [D.E.]” FOF & COL at 4 ¶ 14. The

trial court also found “that the full membership in D.D.[] is the full value of

Mr. Henry’s stake in D.D.[] on September 21, 2010. This represents a 24.5

percent interest in [D.E.]” Id. at ¶ 13.

         An award of compensatory damages will not be reduced or set aside by

a reviewing court unless it is so grossly exorbitant, or so clearly and

immoderately excessive, as to suggest unfairness, mistake,              passion,

partiality, prejudice, or corruption and to shock the court’s conscience or sense

of justice. Davis v. Mullen, 773 A.2d 764, 766 (Pa. 2001); Connolly v.

Phila. Transp. Co., 216 A.2d 60, 64 (Pa. 1966); City of Phila. v. Phila.

____________________________________________

7 We are perplexed by Appellants’ insistence that the trial court should have
relied upon Mr. Musso’s valuation of the Bar when calculating damages,
because the minimum damages award suggested by Mr. Musso was $297,375
– almost double the actual amount awarded by the trial court, $151,410.
Compare Appellant’s Brief at 17, with J. Order, 6/12/17.

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Transp. Co., 162 A.2d 222 (Pa. 1960); Flank v. Walker, 157 A.2d 163, 171

(Pa. 1960).

     Only in an extreme case, where the amount of the verdict is clearly
     excessive, where it can be definitely said the [fact-finder] abused
     its discretion, should an appellate court reduce the verdict--and
     then only to bring the amount within the reasonable limitations of
     the facts and circumstances of that particular case.

Huey v. Blue Ridge Transp. Co., 39 A.2d 602, 604 (Pa. 1944).

     “When reviewing an award of damages we are mindful that . . . the

determination of damages is a factual question to be decided by the fact-

finder.” J.J. DeLuca Co. v. Toll Naval Assocs., 56 A.3d 402, 417 (Pa. Super.

2012) (citation omitted). The fact-finder “must assess the testimony” and

may “accept[] or reject[] the estimates of the damages given by the

witnesses.” Id. (citation omitted); accord Beswick v. Maguire, 748 A.2d

701, 703 (Pa. Super. 2000) (en banc).

     Here, it was the prerogative of the trial court, as fact-finder, to reject

the estimated value of the Bar given by Mr. Musso, N. T., 6/20/16, at 111 &

Appellee’s Ex. 41, and not to use it to calculate damages. See J.J. DeLuca,

56 A.3d at 417; Beswick, 748 A.2d at 703. The value of the Bar and, thus,

the amount of damages awarded to Appellee was based upon the testimony

of two of the appellants, Mr. Damerjian and Mr. Wolk, as to the amounts for

which they sold the Bar. N. T., 6/21/16, at 12-13; N. T., 6/22/16, at 88.

Hence, the damages were “within the reasonable limitations of the facts and

circumstances of th[is] particular case.” Huey, 39 A.2d at 604. We find no

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case law – and Appellants do not cite to any – stating that a fact-finder must

accept the estimates of the expert for one party or another, as Appellants

suggest. See Appellants’ Brief at 16.

     As for the trial court’s conclusion that Mr. Musso’s valuation was

“speculative,” FOF & COL at 4 ¶ 15, Appellants fail to acknowledge that

Mr. Musso’s valuation could only be speculative due to Appellants’ continuous

refusal to produce court-ordered documentation. Order, 2/4/14; Mr. Henry’s

Mot. for Sanctions, 3/11/14; Order, 3/26/14; Order, 4/22/14; Order,

5/13/14; Mr. Henry’s Mot. for Sanctions, 12/1/14; Order, 12/19/14;

Mr. Henry’s Mot. to Compel Appellants’ Answers to Interrogs. & Resps. to Req.

for Produc. of Docs. – Second Set, 2/19/15; Order, 3/3/15; Mr. Henry’s Mot.

for Sanctions for Failure to Comply with the Ct.’s Order of Mar. 3, 2015, &

Respond to Mr. Henry’s Interrogs. & Req. for Produc. of Docs. – Second Set,

3/17/15; Order, 3/31/15; N. T., 6/20/16, at 51-52, 111.

     We therefore find no basis to set aside the value of the Bar as

determined by the trial court as fact-finder. Thus, we hold that the damages

awarded to Appellee by the trial court were proper.

     Judgment affirmed.

     President Judge Gantman joins this memorandum.

     Judge McLaughlin concurs in the result.

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Judgment Entered.

Joseph D. Seletyn, Esq.
Prothonotary

Date: 6/26/18

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