Court Opinion

ID: 2789796
Source: CourtListenerOpinion
Date Created: 2015-03-27 19:09:40.341247+00
Date Added: 2024-06-11T12:06:24.441431
License: Public Domain

J-A06014-15

NON-PRECEDENTIAL DECISION - SEE SUPERIOR COURT I.O.P. 65.37

ASHLEY DEVELOPMENT CORPORATION                   IN THE SUPERIOR COURT OF
                                                       PENNSYLVANIA
                        Appellant

                   v.

PPL ELECTRIC UTILITY CORPORATION
F/K/A PENNSYLVANIA POWER & LIGHT
CO.

                        Appellee                      No. 1416 EDA 2014

            Appeal from the Judgment Entered April 14, 2014
          In the Court of Common Pleas of Northampton County
               Civil Division at No(s): C0048-CV-2010-780

BEFORE: PANELLA, J., OTT, J., and JENKINS, J.

MEMORANDUM BY JENKINS, J.:                            FILED MARCH 27, 2015

     Appellant Ashley Development Corporation (“Ashley”) appeals from the

judgment entered in favor of Appellee PPL Electric Utilities Corporation

(“PPL”) and against Ashley. We affirm.

     The trial court set forth the following facts:

        On October 28, 2005, [Ashley] entered into an agreement
        of sale (“the 2005 Agreement”) with [PPL] to purchase an
        approximately 164-acre parcel of land in Bethlehem
        Township, Northampton County,          Pennsylvania. On
        December 24, 2007, [Ashley] entered into an agreement
        (the “Sewage Capacity Agreement”) with, inter alia, the
        City of Bethlehem (the “City”) for confirmed access to
        sewage capacity for future development on the property.
        As part of the Sewage Capacity Agreement, [Ashley] was
        required to make three installment payments to the City in
        a total sum of $813,700.00. The first installment payment
        of $325,480.00 was due on or before February 29, 2008;
        the second installment payment of $325,480.00 was due
        on or before December 31, 2008; and the third and final
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       installment payment of $162,740.00 was due on or before
       December 31, 2009. [Ashley] executed a promissory note
       in favor of the City on February 25, 2008 (the "Promissory
       Note"), by which [Ashley] promised to make the
       aforementioned installment payments. [Ashley] and the
       City extended the payment dates set forth in the
       Promissory Note multiple times. Moreover, also on
       February 25, 2008, [Ashley] and [PPL] entered into an
       agreement (the “Assignment and Assumption Agreement”)
       by which [PPL] agreed to assume [Ashley’s] obligations to
       make the installment payments to the City pursuant to the
       terms of the Sewage Capacity Agreement.

       Due to a downturn in the real estate market, [Ashley] had
       difficulty closing on the property at the sale price set forth
       in the 2005 Agreement. Consequently, on October 15,
       2008, [Ashley] and [PPL] entered into an “Amended and
       Restated Agreement for the Sale and Purchase of Real
       Estate” (“the 2008 Agreement”). The 2008 Agreement
       reduced the purchase price of the property and set a
       closing date of on or before June 30, 2009. The 2008
       Agreement also required [Ashley] to make the second
       $325,480.00 payment to the City, pursuant to the Sewage
       Capacity Agreement, due on December 31, 2008.
       Additionally, in the 2008 Agreement, the parties “agree[d]
       that times contained in this Agreement shall be of the
       essence.”

       In 2009, [PPL] learned that [Ashley] had failed to make
       the second sewage capacity payment to the City, which
       had been due on December 31, 2008. Despite [Ashley’s]
       failure to perform its obligations pursuant to the 2008
       Agreement, [PPL] chose to provide [Ashley] with a last-
       chance opportunity to close on the property, and,
       accordingly, on July 17, 2009, the parties entered into an
       addendum to the 2008 Agreement (“the July 2009
       Addendum”), which extended the closing date to
       December 31, 2009.       In consideration of [PPL] again
       extending the closing date, [Ashley] agreed

          to make the payment to the City of Bethlehem in the
          amount of Three Hundred Twenty-Five Thousand
          Four Hundred Eighty and 00/100 ($325,480.00)
          Dollars on or before July 31, 2009, and agrees to
          make the final payment to the City of Bethlehem in

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            the amount of One Hundred Sixty-Two Thousand
            Seven Hundred Forty ($162,740.00) Dollars on or
            before October 31, 2009. Any extensions of the
            payment dates by the City of Bethlehem shall not in
            any manner change [Ashley’s] obligations pursuant
            to this paragraph.

        Further, [Ashley] agreed that, if it wanted to extend the
        closing date beyond December 31, 2009, it would be
        required to pay [PPL] an extension fee of $1,000,000.00
        on or before that date.

        On July 30, 2009, [Ashley] delivered a check to the City in
        the amount of $325,480.00. However, [Ashley] made
        arrangements with the City to hold the check until given
        word by [Ashley] to cash or deposit it. No such word was
        ever given to the City by [Ashley], and the check was not
        cashed or deposited by the City.

        In December 2009, [Ashley] approached [PPL] about
        extending the closing date called for by the July 2009
        Addendum, but [PPL] rejected an extension and confirmed,
        via email, that [Ashley] would be required to perform its
        obligations under the July 2009 Addendum or would be in
        breach thereof. [Ashley] did not close on the property nor
        did [Ashley] pay the $1,000,000.00 extension fee prior to
        December 31, 2009. The instant suit and counterclaim
        followed.

Trial Court Opinion, 4/4/2014, at 4-7 (internal citations to the record

omitted).

     On January 26, 2010, Ashley filed a complaint seeking damages for

breach of contract, misrepresentation, and promissory estoppel/unjust

enrichment.   It also sought declaratory relief, specific performance, and

injunctive relief. On March 1, 2010, PPL filed an answer, new matter, and

counterclaim. The counterclaim sought damages for breach of contract and

abuse of process. PPL withdrew the abuse of process claim before trial.

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        On March 9, 2010, after a two-day hearing, the trial court denied

Ashley’s request for a preliminary injunction.

        On January 17, 2013, the trial court issued an order bifurcating the

trial, with the issue of liability to be presented to a jury prior to the issue of

damages. On January 22, 2013, a jury trial commenced. Following Ashley’s

case-in-chief, the trial court granted PPL’s motion for a compulsory nonsuit

for the misrepresentation claim.1          N.T., 1/19/2013, at 7. On January 30,

2013, the jury returned a verdict in favor of PPL and against Ashley on the

breach of contract claims and the trial court entered a verdict in favor of PPL

and against Ashely on Ashley’s claims for declaratory relief, specific

performance, and injunctive relief. N.T., 1/30/2013, at 122-25.             On March

27, 2013, the parties entered a written stipulation, and the court entered an

agreed upon order molding the verdict and entering an award in favor of PPL

in the amount of $203,500.00.

        On April 8, 2013, Ashley filed a post-trial motion seeking judgment

notwithstanding the verdict or, in the alternative, a new trial. 2          The trial

court held a hearing and, on April 4, 2014, it denied the motion.                 After

Ashley filed a praecipe for judgment, the prothonotary entered judgment on

April 14, 2014. On May 2, 2014, Ashley filed a timely notice of appeal. Both
____________________________________________

1
   Ashley does not challenge                   the   compulsory   nonsuit   for    the
misrepresentation claim on appeal.
2
    Ashley filed its brief in support of the motion on October 25, 2013.

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Ashley and the trial court complied with Pennsylvania Rule of Appellate

Procedure 1925.3

       Ashley raises the following claims on appeal:

          1. Was it reversible      error for the trial court to rule and
             instruct the jury      that as a matter of law that [sic]
             Ashley’s tender of     payment to the City of Bethlehem by
             a promissory note      was not a “payment.”

          2. Was it reversible error for the trial court not ruling as a
             matter of law that PPL extended the December 31,
             2009 deadline for Ashley to pay the $1,000,000.00
             extension fee by virtue of a written communication
             between Richard Brooks on behalf of Ashley and Robert
             J. Farley on behalf of PPL?

Appellant’s Brief at 2.

       Ashley challenges the trial court’s denial of its post-trial motions.

When reviewing a trial court’s decision whether to grant judgment

notwithstanding the verdict, this Court “must consider the evidence,

together with all favorable inferences drawn therefrom, in a light most

favorable to the verdict winner.” Reott v. Asia Trend, Inc., 7 A.3d 830,

835 (Pa.Super.2010) (quoting Campisi v. Acme Markets, Inc., 915 A.2d

117, 119 (Pa.Super.2006)). The Superior Court “will reverse a trial court’s

grant or denial of a judgment notwithstanding the verdict only when we find

an abuse of discretion or an error of law that controlled the outcome of the

____________________________________________

3
 The trial court issued a 1925(a) statement incorporating its April 4, 2014
opinion.

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case. Further, the standard of review for an appellate court is the same as

that for a trial court.” Id.

        The Superior Court’s “standard of review from an order denying a

motion for a new trial is whether the trial court committed an error of law,

which controlled the outcome of the case, or committed an abuse of

discretion.” Mirabel v. Morales, 57 A.3d 144, 150 (Pa.Super. 2012). An

abuse of discretion occurs where the trial court “rendered a judgment that is

manifestly unreasonable, arbitrary, or capricious, has failed to apply the law,

or was motivated by partiality, prejudice, bias, or ill will.”       Id. (quoting

Rettger v. UPMC Shadyside, 991 A.2d 915, 924 (Pa.Super.2010)).

        Ashley first challenges the court’s jury instruction that the promissory

note did not constitute payment.         Appellant’s Brief at 2.    The argument

section of Ashley’s brief discusses the jury instructions regarding both the

promissory note and the check Ashley provided to the City. Appellant’s Brief

at 21-43. Ashley did not object to the jury instruction regarding the check

at the time of trial and, therefore, waived this argument. N.T., 1/29/2013,

at   1-17;    see   McManamon       v.    Washko,    9060    A.2d    1259,   1283

(Pa.Super.2006) (finding challenge to jury instruction waived where party

did not object at trial). Ashley also waived this issue because the question

presented section of its brief does not mention the check provided to the

City.   See Commonwealth v. Sepulvida, 55 A.3d 1108, 1133 (Pa.2012)

(issue waived when not raised in statement of questions presented).

        Regarding the promissory note, the trial court found the following:

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       In its second issue, [Ashley] asserts that the [c]ourt erred
       by holding that [Ashley’s] Promissory Note and the check
       tendered to the City on July 30, 2009, did not constitute
       “payment” pursuant to the terms of the July 2009
       Addendum. In its closing charge, the Court instructed the
       jury that “the term payment as used in the July 17, 2009
       addendum means cash, certified check, or an uncertified
       check collectable by the City of Bethlehem, but not a
       promissory note.”

          [T]he rules of contract interpretation provide that the
          mutual intention of the parties at the time they
          formed the contract governs its interpretation. Such
          intent is to be inferred from the written provisions of
          the contract.

          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, which will be given its commonly
          accepted and plain meaning.

       Miller v. Poole, 45 A.3d 1143, 1146 (Pa.Super.2012)
       (citations omitted) (internal quotation marks omitted).

       [Ashley] argues that its Promissory Note was a negotiable
       instrument and thus constituted payment, pursuant to the
       July 2009 Addendum.         “Payment is defined as the
       [p]erformance of an obligation, [usually] by the delivery of
       money.’” Romaine v. W.C.A.B. (Bryn Mawr Chateau
       Nursing Home), 901 A.2d 477, 482 (Pa.2006) (quoting
       BLACK'S LAW DICTIONARY 1150 (7th ed. 1999)). In the
       case of In re De Roy’s Estate, 157 A. 800, 801
       (Pa.1931), the decedent, a partner in a law firm, issued
       promissory notes to the firm, which were endorsed and
       given to a bank. After his death, the surviving partners
       continued as a new firm and issued new notes to the bank
       for the amount due on the prior notes. Id. The bank
       retained the old notes as security. Id. When the bank
       attempted to collect from the decedent’s estate, the estate
       argued that the new notes constituted payment of the
       prior ones. Id. The Supreme Court disagreed with the
       estate and held that “[p]ayment in commercial paper
       constitutes only conditional payment, and, since
       conditional payment does not discharge the original

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       indebtedness, it does not discharge the surety for such
       indebtedness.” Id.

       [Ashley] argues that the factual scenario in the case of In
       re DeRoys Estate, which the [c]ourt relied upon in
       making its ruling at trial, is distinguishable from that of the
       instant case. Initially, the [c]ourt notes that it never held
       that the Supreme Court’s decision in the case of In re
       DeRoy’s Estate sets forth a blanket rule that a
       promissory note can never constitute payment. The [c]ourt
       actually agrees with [Ashley] that context is critically
       important in ascertaining the meaning of “payment” here
       at issue. Thus, the definition of “payment” is not to be
       determined in a vacuum or by simply importing the
       definition of “negotiable instrument” from Article 3 of the
       Uniform Commercial Code, 13 Pa.C.S.A. § 3104(a), as
       [Ashley] seeks to do. Rather, the meaning of the term
       “payment” as used in the July 2009 Addendum must be
       ascertained by looking to the parties’ intentions as
       expressed in the language of the addendum. See Miller,
       45 A.2d at 1146.

       It is clear that, by insisting that [Ashley] agree to the
       terms of the July 2009 Addendum, [PPL] sought to prevent
       [Ashley] and the City from extending the Sewage Capacity
       Agreement payment dates, as had previously occurred
       multiple times. It cannot be emphasized enough that a
       promissory note is a “promise to pay money.” Lebanon
       Bank v. Mangan, 28 Pa. 452, 455 (1857). . . . Thus, “[a]
       promissory note is not money, but only an engagement to
       pay money at a future time, which perhaps may never be
       complied with.” Leighty v. The President, Managers,
       and Co. of the Susquehanna and Watefford Tpk. Co.,
       14 Serg. & Rawle 434, 435 (Pa.1826). Here, treating the
       Promissory Note as payment would defeat the very
       purpose of the July 2009 Addendum—to ensure that
       payment was made on the dates specified rather than on
       some uncertain future date agreed to by [Ashley] and the
       City but without [PPL’s] knowledge or consent. In that
       regard, the fact that [Ashley] executed the Promissory
       Note more than one year before it executed the July 2009
       Addendum only operates to confirm that the parties did
       not intend that the Promissory Note could satisfy
       [Ashley’s] payment obligations pursuant to the addendum.
       Finally, the Court notes that [Ashley’s] obligation, pursuant

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         to the July 2009 Addendum, was to make “payment” to
         the City, not to deliver to the City a negotiable instrument
         promising to pay the sum due. Thus, [Ashley’s] reference
         to the definition of “negotiable instrument” in Article 3 of
         the Uniform Commercial Code has little, if any, relevance
         to the definition of “payment” in this case. As in the case
         of In re DeRoy’s Estate, the factual circumstances
         surrounding the execution of the July 2009 Addendum
         demonstrates that the parties did not intend for a
         promissory note to be “payment.”

         Additionally, the [c]ourt would be remiss if it did not point
         out that the City’s Solicitor, John F. Spirk, Jr., Esquire, who
         testified for [Ashley], stated that he did not consider the
         Promissory Note to be payment for [Ashley’s] obligations
         pursuant to the Sewage Capacity Agreement. To the
         contrary, Attorney Spirk testified that, despite [Ashley’s]
         tendering of the Promissory Note, [Ashley] “still owed
         money” because the City “wanted the money, not the
         paper,” i.e., the Promissory Note. (N.T., 1/23/2013, at
         62:13-14.)

N.T., 1/30/2013, at 85:24-86:25 (emphasis and internal footnotes omitted).

      In support of its argument that the trial court erred when it instructed

the jury that, as a matter of law, Ashley’s tender of a promissory note to the

City of Bethlehem was not a “payment,” Ashley relies on out-of-state cases

finding a promissory note constitutes payment. These cases, however, were

fact-specific and focused on the parties’ intent. See Boozer v. Chandler,

509 So.2d 1293 (Fla. Dist. App. 4th 1987) (noting payor sued on contract

and notes and finding intent of parties was clear and, if default occurred,

seller would retain cash deposited and notes would be credited against the

sums paid); Cala v. Gerami, 484 N.E.2d 1199 (Ill. App. 1985) (noting

“[g]enerally a promissory note may operate as a payment if the parties so

agree,” finding “it appears that the promissory note was given and accepted

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as   a    payment     due   under    the    installment   contract”   and   concluding

“promissory note is a payment within the terms of paragraph 12 of the

installment agreement”).4

         The trial court acted within its discretion in instructing the jury that the

promissory note was not a payment. In 2008, Ashley entered an agreement

with the City and provided the City with a promissory note, promising to pay

its obligations in three installments. It then assigned the obligations under

the agreement with the City to PPL, who made the first payment thereunder.

PPL and Ashley entered into addendums to their agreement for the sale of

land, pursuant to which Ashley agreed to make the final two installments.

Because these addendums were entered into after Ashley provided the

promissory note to the City, the parties could not have intended the

promissory note to constitute payment.              This is further evidenced by the

following language of the July 2009 addendum: “Any extensions of the

payment dates by the City of Bethlehem shall not in any manner change

[Ashely’s] obligations pursuant to this paragraph.” We agree with the trial

court that, under the circumstances of this case, the promissory note

constituted a promise to pay, not actual payment.

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4
  Ashley also relies on cases which found that submitting a check suspended
the payment obligation. Appellant’s Brief at 25-35. As noted above, Ashley
waived its argument challenging the jury instruction regarding the check.

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     Ashley next challenges the trial court’s denial of Ashley’s request that

it find, as a matter of law, that PPL extended the December 31, 2009

deadline for Ashley to pay the $1,000,000.00 extension fee.         Appellant’s

Brief at 43. Ashley maintains it informed PPL on December 22, 2009 and

December 29, 2009 that it had the $1,000,000.00 extension fee, but PPL

extended the deadline until January 8, 2010. Id. at 43-44. Ashley bases

this argument on the following email Ashley received from PPL on December

29, 2009:

        Richard,

        I planned to contact you this morning to let you know
        where it stands. Bottom line is that PPL will not enter into
        another extension, but we are willing to discuss the
        proposal after we enter the new year. Unless you would
        be able to keep the terms of the current contract, you will
        be in default of the current agreement.             I have a
        commitment from Bernhard that we will not immediately
        call the Letter of Credit, but will need a written proposal by
        1/8/2010 to present for consideration to PPL Electric
        Utilities executives.

        Call me if you want to discuss.

        Bob

Exhibit 25 to Defendant PPL Electric Utilities Corporation’s Motion for

Summary Judgment; N.T., 1/29/2013, at 167.

     This claim lacks merit. The email does not extend the deadline for the

$1,000,000.00 payment      to January 8, 2010 and advises Ashley that it

would be in default if unable to meet the requirements of the July

Addendum.      Further,   the   testimony    regarding   the   telephone   calls

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surrounding the email differed, making it a factual issue for the jury.

Compare. E.g., N.T., 1/25/2013, 189-193 (testimony by Ashley’s witness

PPL informed Ashley it did not have to pay extension fee on or before

December 31, 2009 and agreement was extended), with, e.g., N.T.,

1/29/2013, 168-69 (testimony by PPL’s witness denying PPL granted

extension).

     Judgment affirmed.

     Judge Ott joins in the memorandum.

     Judge Panella did not participate in this decision.

Judgment Entered.

Joseph D. Seletyn, Esq.
Prothonotary

Date: 3/27/2015

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