Court Opinion

ID: 4578036
Source: CourtListenerOpinion
Date Created: 2020-10-16 21:11:46.127024+00
Date Added: 2024-06-11T13:38:48.496705
License: Public Domain

J-A15013-20

NON-PRECEDENTIAL DECISION - SEE SUPERIOR COURT I.O.P. 65.37

    DAVID HATCHIGIAN                           :   IN THE SUPERIOR COURT OF
                                               :        PENNSYLVANIA
                       Appellant               :
                                               :
                v.                             :
                                               :
    STEIN & TROIANI, A PROFESSIONAL            :
    CORPORATION                                :
                                               :
                       Appellee                :      No. 3315 EDA 2019

                Appeal from the Order Entered October 23, 2019
              In the Court of Common Pleas of Montgomery County
                     Civil Division at No(s): No. 2013-04105

BEFORE:      LAZARUS, J., KING, J., and STRASSBURGER, J.*

MEMORANDUM BY KING, J.:                               FILED OCTOBER 16, 2020

        Appellant, David Hatchigian, appeals pro se from the order entered in

the Montgomery County Court of Common Pleas, denying his motion for

sanctions, in this breach of contract dispute. We affirm.

        The facts and procedural history of this case are as follows:

           …[Appellant] filed a complaint in Philadelphia County
           alleging [Appellee] undertook to represent him for an appeal
           but failed to provide legal services sufficient to warrant the
           $1,000.00 non-refundable minimum fee.              [Appellant]
           attached to this complaint the engagement letter signed by
           both parties which stated that [Appellant] “agreed to give
           [Appellee] a $1,000.00 non-refundable retainer/minimum
           fee” as a payment to “review the case and possibly assure
           [Appellant’s] representation in this matter.” [Appellee]
           reviewed [Appellant’s] files and ultimately declined to
           represent him in the appeal, due in part to low chance of
           success. When [Appellee] subsequently requested the non-
____________________________________________

*   Retired Senior Judge assigned to the Superior Court.
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       refundable minimum fee for review of [Appellant’s] case,
       [Appellant] responded with a letter requesting that the non-
       refundable retainer be returned in full or in part, due to his
       feeling that [Appellee] “had not read the file in sufficient
       depth.” During oral argument on the motions in limine,
       [Appellant] stated on the record that “[t]here is no
       misunderstanding that I understood the contract reads
       nonrefundable… What I’m saying is I didn’t read it when I
       signed the contract.”

       [Appellant’s] Philadelphia County action against [Appellee]
       was transferred to Montgomery County via Court Order
       following [Appellee’s] filing of preliminary objections. The
       parties proceeded to arbitration in 2016, where the
       arbitration panel made an award in favor of [Appellee].
       [Appellant] appealed the arbitration award and filed a
       complaint in Montgomery County on April 25, 2016, which
       asserted two counts entitled “Breach of Contract” and
       “Breach of Fiduciary Duty.”

       The parties appeared for a one-day jury trial on August 19,
       2019, and after jury selection [but before trial began], the
       parties agreed to settle. In an on-the-record exchange, the
       terms of the settlement were memorialized, with [Appellant]
       agreeing to resolve the case in return for [Appellee] paying
       him the $1,000.00 fee and dropping his counterclaim. The
       parties also agreed that [Appellee] would draft a release and
       that [Appellee] would have no obligation to send a check
       until [Appellant] signed and returned to [Appellee] both the
       release and order to settle, discontinue, and end the case.
       Specifically, [Appellant] accepted the settlement on the
       record during the following exchange:

          The [c]ourt: We discussed this jury charge, and the
          [c]ourt has worked out a resolution on this case; is
          that right? I’m asking the parties. [Appellant], I’m
          asking you, [Appellant], you agreed to resolving
          this case for a thousand-dollar fee that you paid
          counsel?

          [Appellant]: Yes.

          The [c]ourt: And we’ll reduce this to a release and
          eventually an order to discontinue and end this case.

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          Once the release is signed, [Appellee], you’re going to
          send him a check for the thousand dollars. That ends
          this case.

          [Appellant]: Yes.

          The [c]ourt: And there will not be any further actions
          followed arising out of the cause of action that you
          originally filed.

          [Appellant]: Correct. I agree.

          The [c]ourt: As well, the counterclaim will be dropped.

          [Appellee]: Yes, Your Honor. I just have one thing to
          say to the semantics. I’m going to send a release and
          an order to settle for [Appellant] to sign. Once I
          receive both documents, originals, back, that’s when
          the check will be sent out.

          The [c]ourt: All right. So you understand the check
          doesn’t go out until you sign the release.

          [Appellant]: Pardon me?

          The [c]ourt: The check will not go out until you
          sign the release and the order to settle and end
          the case.

          [Appellant]: Right.

          The [c]ourt: Discontinuing the case, both of them.

          [Appellant]: After I sign the release –

          The [c]ourt: And the order to settle.

          [Appellee]: Then I’ll send you a check.

          The [c]ourt: Then he’ll send you the check.

          [Appellant]: After I sign –

          The [c]ourt: So you have to get both of those back to

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              him.

          On August 26, 2019, [Appellee] provided [Appellant] with a
          release and order to settle. [Appellant] replied to [Appellee]
          on September 3, 2019, stating that he found the release
          “not acceptable” and that he would not sign the release until
          after he received settlement funds. On September 26,
          2019, [Appellant] filed a “Rule 229.1 Motion for Sanctions
          for Failure to Deliver Settlement Funds,” alleging that
          [Appellee] had wrongfully withheld settlement funds and
          requesting that this [c]ourt impose sanctions in the form of
          invalidation of the settlement, interest running from the
          twenty-first day of the date of delivery of the settlement
          funds, and $500 in attorney’s fees and costs associated with
          said motion.     On October 3, 2019, [Appellee] filed a
          response in opposition, alleging that [Appellant] had failed
          to meet the terms and conditions of the settlement by failing
          to sign and return the release or order as agreed in open
          court on August 19, 2019. This [c]ourt denied [Appellant’s]
          Motion for Sanctions in an Order dated October 23, 2019.

          [Appellant] filed a timely Notice of Appeal on October 24,
          2019.

(Trial Court Opinion, filed November 26, 2019, at 1-4) (emphasis in original)

(internal citations and footnote omitted).       The court ordered Appellant on

November 1, 2019, to file a concise statement of errors complained of on

appeal, per Pa.R.A.P. 1925(b); Appellant complied on November 6, 2019.1

       Appellant presents the following issues on appeal:

          Whether any authority exists requiring a settling party to
          execute a specific release or a release improperly naming a
          nonparty.

          Whether the motion to invalidate under subdivision (d)(1)
____________________________________________

1 The order denying Appellant’s motion under Rule 229.1 was a final and
appealable order. See generally Wright v. Lexington & Concord Search
and Abstract LLC, 26 A.3d 1134, 1136 n.1 (Pa.Super. 2011).

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          of Rule 229.1 should have been granted irrespective of the
          court’s decision regarding sanctions under subdivision
          (d)(2) and this case reinstated.

          Whether the requested sanctions should now be granted
          given that all preconditions to payment have now been
          satisfied.

(Appellant’s Brief at 4).2

       Appellant argues the trial court erred in denying his motion for sanctions

under Pa.R.C.P. 229.1, where Appellee failed to send Appellant the agreed-

upon settlement funds.         Appellant contends he refused to sign Appellee’s

original release because it included Appellant’s wife, a non-party to this action.

Appellant maintains Appellee failed to submit a corrected version of the

release to Appellant in a timely fashion, thereby discharging Appellant from

his obligation to execute the release. Appellant insists that the parties’ failure

to execute a finalized release did not form a valid basis for denying sanctions

under Rule 229.1, because Appellee failed to submit a corrected release.

Appellant notes that Appellee failed to execute the signed release Appellant

sent to him on February 25, 2020.

       Appellant further asserts that he offered Appellee the alternative option

of waiving the release and “accepting release by discontinuance, i.e.,

accepting a signed Praecipe to ‘Settle, End and Discontinue’ in exchange for

____________________________________________

2 Appellant failed to raise his third issue on appeal in his Rule 1925(b)
statement. Therefore, it is waived. See Commonwealth v. Castillo, 585
Pa. 395, 888 A.2d 775 (2005) (explaining general rule that issues not raised
in Pa.R.A.P. 1925(b) statement will be deemed waived for appellate review).

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payment of the settlement funds.”        Appellant claims that a discussion

concerning his offer to sign the praecipe in lieu of a modified release was

somehow omitted from the notes of testimony.          Alternatively, Appellant

submits the court should have granted his request to invalidate the settlement

agreement, regardless of its decision concerning sanctions, and should have

rescheduled the instant matter for a trial on the merits. Appellant concludes

this Court should grant him sanctions under Rule 229.1, or vacate the trial

court’s October 23, 2019 order and remand for trial. We disagree.

      “Our standard of review of a trial court’s grant or denial of a motion to

enforce a settlement agreement is plenary, as the challenge is to the trial

court’s conclusion of law.”     Casey v. GAF Corp., 828 A.2d 362, 367

(Pa.Super. 2003), appeal denied, 577 Pa. 684, 844 A.2d 550 (2004). While

we are free to draw our own inferences and reach our own conclusions from

the court’s factual findings, we are bound by those findings of fact when

competent evidence exists to support them. Id.

      Rule 229.1 governs delivery of settlement funds and allows sanctions

for failure to deliver funds. Pa.R.C.P. 229.1. The Rule reads in relevant part

as follows:

         Rule 229.1.     Settlement Funds.      Failure to Deliver.
         Sanctions

         (a)   As used in this rule,

         “defendant” means a party released from a claim of liability
         pursuant to an agreement of settlement;

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       “plaintiff” means a party who, by execution of a release
       pursuant to an agreement of settlement, has agreed to
       forego a claim of liability against a defendant. The term
       includes a defendant who asserts a counterclaim;

       “settlement funds” means any form of monetary exchange
       to a plaintiff pursuant to an agreement of settlement, but
       not including the annuity or future installment portion of a
       structured settlement.

       (b) The parties may agree in writing to modify or waive
       any of the provisions of this rule.

       (c) If a plaintiff and a defendant have entered into an
       agreement of settlement, the defendant shall deliver the
       settlement funds to the attorney for the plaintiff, or to the
       plaintiff if unrepresented, within twenty calendar days from
       receipt of an executed release.

                                *    *    *

       (d) If settlement funds are not delivered to the plaintiff
       within the time required by subdivision (c), the plaintiff may
       seek to

       (1) invalidate the agreement of settlement as permitted by
       law, or

       (2) impose sanctions on the defendant as provided in
       subdivision (e) of this rule.

       (e) A plaintiff seeking to impose sanctions on the
       defendant shall file an affidavit with the court attesting to
       non-payment.       The affidavit shall be executed by the
       plaintiff’s attorney and be accompanied by

       (1) a copy of any document evidencing the terms of the
       settlement agreement,

       (2)    a copy of the executed release,

       (3) a copy of a receipt reflecting delivery of the executed
       release more than twenty days prior to the date of filing of
       the affidavit,

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        (4) a certification by the attorney of the applicable interest
        rate,

        (5)   the form of order prescribed by subdivision (h), and

        (6) a certification by the attorney that the affidavit and
        accompanying documents have been served on the
        attorneys for all interested parties.

        (f) Upon receipt of the affidavit and supporting
        documentation required by subdivision (e), the defendant
        shall have twenty days to file a response.

        (g) If the court finds that the defendant violated
        subdivision (c) of this rule and that there is no material
        dispute as to the terms of the settlement or the terms of the
        release, the court shall impose sanctions in the form of
        interest calculated at the rate equal to the prime rate as
        listed in the first edition of the Wall Street Journal published
        for each calendar year for which the interest is awarded,
        plus one percent, not compounded, running from the
        twenty-first day to the date of delivery of the settlement
        funds, together with reasonable attorneys’ fees incurred in
        the preparation of the affidavit.

Pa.R.C.P. 229.1.

     Additionally, settlement agreements are contracts, and courts employ

contract principles when interpreting settlement agreements.         Kramer v.

Schaeffer, 751 A.2d 241, 245 (Pa.Super. 2000).          A fundamental rule in

construing a contract is to ascertain and give effect to the intent of the

contracting parties. Kmart of Pennsylvania, L.P. v. MD Mall Associates,

LLC, 959 A.2d 939, 943 (Pa.Super. 2008), appeal denied, 602 Pa. 667, 980
A.2d 609 (2009).

     Instantly, in addressing Appellant’s issues on appeal, the trial court

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reasoned:

       All…of [Appellant’s] issues complained of on appeal
       generally allege error in this [c]ourt’s denial of his “Rule
       229.1 Motion for Sanctions for Failure to Deliver Settlement
       Funds.” As for his first allegation of error specifically,
       [Appellant] questions whether “any authority exists
       requiring a settling party to execute a [specific] release…”
       Of significance, nowhere in its Order of October 23, 2019
       denying the motion for sanctions did this [c]ourt further
       order that [Appellant] must execute the specific version of
       the release sent by [Appellee]. The scope of the Order was
       narrower than [Appellant] appears to allege in his concise
       statement, merely denying [Appellant’s] request to impose
       sanctions on [Appellee]. In any event, the record above
       clearly establishes that [Appellant] agreed to a settlement,
       and nowhere – either at trial or in subsequent orders – has
       this [c]ourt ordered that Appellant must execute any
       particular version of a release.

       [Appellant’s] second…issue[] on appeal touch[es] more
       directly on the question of whether this [c]ourt was bound
       to invalidate the settlement or grant other sanctions. In his
       motion for sanctions, [Appellant] specifically cites Rule
       229.1 as his authority for such a request.          However,
       [Appellant’s] allegations of error lack any merit, as this
       [c]ourt has no authority to either invalidate the settlement
       or impose sanctions under Pa.R.C.P. 229.1.(d) where
       [Appellant] has not proven [Appellee] failed to deliver funds
       “within the time required by subdivision (c).” In other
       words, for Pa.R.C.P. 229.1(d) to apply, [Appellee] must
       have failed to deliver settlement funds “within twenty
       calendar days from receipt of an executed release.”
       Pa.R.C.P. … 229.1(c) (emphasis added). In this case,
       [Appellant] himself made it impossible for [Appellee] to
       have violated Pa.R.C.P. 229.1(c), as [Appellant] never
       returned an executed release to [Appellee]. Thus, this
       [c]ourt did not err in finding that [Appellant] was not
       entitled to relief under Pa.R.C.P. 229.1(d), as [Appellee] had
       no obligation to deliver settlement funds in the absence of
       an executed release.

       Even outside of the plain language of Pa.R.C.P. 229.1,
       [Appellant] had agreed on the record at trial to a procedure

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        in which [Appellee] would not be required to send
        settlement funds until receipt of a signed release:

           [Appellee]: Yes, Your Honor. I just have one thing to
           say to the semantics. I’m going to send a release and
           an order to settle for [Appellant] to sign. Once I
           receive both documents, originals, back, that’s when
           the check will be sent out.

           The [c]ourt: All right. So you understand that the
           check doesn’t go out until you sign the release.

           [Appellant]: Pardon me?

           The [c]ourt: The check will not go out until you
           sign the release and the order to settle and end
           the case.

           [Appellant]: Right.

        In this case, [Appellant] agreed to settlement terms and
        agreed that [Appellee] would have no obligation to send him
        settlement funds until and unless he received a signed
        release from [Appellant].3 [Appellant] cannot now argue
        that this [c]ourt improperly refused to invalidate the
        settlement or impose sanctions, when his own refusal to
        execute the release barred him from remedies reserved for
        those who have been wrongfully denied settlement funds
        only after executing a release. Thus, [Appellant’s] own
        actions made Pa.R.C.P. 229.1(d) inapplicable to him, and
        this [c]ourt did not err in denying his motion for sanctions.

           3 [Appellee] stands ready to release the $1,000.00
           retainer fee upon the signing of the general release
           and had earlier agreed to strike the wife’s name as a
           signor on said release in a conference on October 18,
           2019.

(Trial Court Opinion at 6-7) (emphasis in original) (internal citations and

footnote omitted). We agree with the trial court’s analysis. Here, both the

plain language of Pa.R.C.P. 229.1 and Appellant’s on-the-record agreement

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dictate that Appellant must sign and return a release to Appellee before

Appellee delivers the settlement funds.      See Pa.R.C.P. 229.1; Kmart of

Pennsylvania, L.P., supra.       At the time Appellant filed his motion for

sanctions, however, Appellant had failed to sign and return the release. Thus,

the court properly denied Appellant’s motion for sanctions.      See Casey,

supra. Accordingly, we affirm.

     Order affirmed.

Judgment Entered.

Joseph D. Seletyn, Esq.
Prothonotary

Date: 10/16/20

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