Court Opinion

ID: 4462521
Source: CourtListenerOpinion
Date Created: 2019-12-09 17:11:57.296467+00
Date Added: 2024-06-11T14:28:06.419234
License: Public Domain

J-A02030-19

NON-PRECEDENTIAL DECISION - SEE SUPERIOR COURT I.O.P. 65.37

    TODD KENNEDY                               :   IN THE SUPERIOR COURT OF
                                               :        PENNSYLVANIA
                                               :
                v.                             :
                                               :
                                               :
    MCCLARIN PROPERTIES, LLC AND               :
    MARTIN STEIN                               :
                                               :   No. 979 MDA 2018
                       Appellants              :

                 Appeal from the Order Entered May 17, 2018
     In the Court of Common Pleas of York County Civil Division at No(s):
                              2017-SU-001621

BEFORE: LAZARUS, J., DUBOW, J., and NICHOLS, J.

MEMORANDUM BY LAZARUS, J.:                          FILED DECEMBER 09, 2019

       McClarin Properties, LLC (McClarin” and Martin Stein (collectively,

Appellants) appeal from the order, entered in the Court of Common Pleas of

York County, granting partial summary judgment in favor of Todd Kennedy

regarding his claims for breach of contract, specific performance, and

injunctive relief.1 After careful review, we affirm.
____________________________________________

1  We note the Appellants’ appeal, which pertains to the issuance of an
injunction and an order for specific performance, is properly before this Court
as an interlocutory appeal as of right. See Pa.R.A.P. 311(a)(4) (permitting
interlocutory appeal as of right where court issues order that “grants or denies
. . . an injunction unless the order was entered . . . [p]ursuant to 23 Pa.C.S.
§§ 3323(f), 3505(a); or [a]fter a trial but before then entry of the final
order[,]” circumstances which are not implicated in instant appeal); see also
Wynnewood Development, Inc. v. Bank and Trust Co. of Old York
Road, 711 A.2d 1003, 1003–1005 (Pa. 1998) (finding order dismissing
portion of complaint requesting injunctive relief and specific performance, but
leaving for trial compensatory damages claim, interlocutory order appealable
as of right pursuant to Rule 311(a)(4)).
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     On January 15, 2015, Stein, the managing partner of McClarin, executed

a written agreement (Letter Agreement) with Kennedy, under which Stein and

Kennedy   would     each   personally    guarantee   McClarin’s   payment   and

performance on a loan agreement between McClarin and Adams County

National Bank (ACNB) in the principal amount of $3,750,000. In consideration

for taking on the responsibilities of a guarantor, Kennedy was to receive

$50,000 on or before June 15, 2015.        Both Kennedy and Stein signed the

Letter Agreement.

     The Letter Agreement, in its entirety, reads as follows:

     Reference is hereby made to the Loan Agreement (“Loan
     Agreement”) between McClarin Properties, LLC and ACNB Bank, a
     Pennsylvania financial institution (“ANCB”), for the acquisition of
     certain real properties owned by McClarin Plastics, Inc. located at
     15 Industrial Drive and 211 North Blettner Avenue. Capitalized
     terms used herein which are not otherwise defined shall have the
     meanings ascribed to such terms in the Loan Agreement.

     ANCB requires that personal guaranties be executed in connection
     with the financing set forth in the Loan Agreement, which you
     [Kennedy] and I [Stein] have agreed to provide subject to the
     terms set forth herein. Thus, intending to be legally bound, the
     parties agree as follows:

     1.    Martin Stein and Todd Kennedy shall each execute a
           personal guaranty in favor of ANCB guarantying the
           payment and performance of the obligations of McClarin
           Properties to ANCB under the terms of the Loan Documents
           (together, the “Guaranties,” and individually, the “Todd
           Kennedy Guaranty”). The Todd Kennedy agreement will
           expire after 6 months from the date of execution.

     2.    McClarin Properties, LLC, in the first instance, and Martin
           Stein agree to indemnify and hold you [Kennedy] and your
           affiliates harmless from and against all claims, liabilities,
           obligations, costs, damages, losses and expenses (including

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              reasonable attorneys’ fees and costs of investigation) of any
              nature (collectively, “Losses”) arising out of or relating to
              any claims made under the Todd Kennedy Guaranty.

        3.    In consideration for your execution of the Todd Kennedy
              Guaranty referenced in paragraph 1, McClarin Properties,
              LLC will pay you [Kennedy] $50,000 the sooner of June 15,
              015 [sic], a refinance of the underlying loan or when the
              Todd Guaranty is removed (which in no case will be more
              than 6 months from the date of execution).

Letter Agreement, 1/15/15, at 1.

        On August 17, 2017, Kennedy filed a complaint raising claims of breach

of contract, unjust enrichment, and fraud against McClarin, and claims of

permanent injunctive relief and specific performance against the Appellants.

All claims concerned the Appellants’ failure to pay Kennedy $50,000 or release

him as a guarantor. On December 7, 2017, Kennedy filed a motion for partial

summary judgment with regard to all claims except fraud.2 Kennedy’s motion

specifically requested the trial court issue an order “directing [the Appellants]

to take all necessary action to remove the Guaranty and thereby release

[Kennedy] from any liability of any kind . . . related to the Loan Agreement

between McClarin and ACNB.”               Motion for Partial Summary Judgment,

12/7/17, at 11.

____________________________________________

2   The trial court has yet to assess Kennedy’s fraud claim.

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        On May 17, 2018, the trial court granted Kennedy’s motion and entered

partial summary judgment on his claims for breach of contract,3 injunctive

relief, and specific performance.         On June 7, 2018, the Appellants filed a

motion for reconsideration. On June 15, the Appellants timely filed a notice

of appeal.      On June 27, 2018, the trial court denied their motion for

reconsideration. Both the Appellants and the court complied with Pa.R.A.P.

1925.

        The Appellants raise the following issues for our review:

        1.    Whether the lower court erred as a matter of law and abused
              its discretion by applying the incorrect legal standard for the
              granting of mandatory injunctive relief?

        2.    Whether the lower court erred as a matter of law and abused
              its discretion when it determined that there were no material
              facts in dispute, and drew all factual inferences in the favor
              of [Kennedy]?

        3.    Whether the lower court erred as a matter of law and abused
              its discretion by granting relief to [Kennedy] requiring
              [Appellants] to take action that they have no legal or
              contractual authority and/or ability to take?

        4.    Whether the lower court erred as a matter of law and/or
              abused its discretion by granting [Kennedy’s] request for
              specific performance where [Kennedy] failed to establish
              the elements necessary for such relief?

Brief of Appellant, at 5.

____________________________________________

3As the court granted relief with respect to breach of contract, it did not assess
Kennedy’s claim for unjust enrichment, which he pleaded in the alternative.

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       Preliminarily, we examine which claims are preserved for our review.

“[A]rguments not raised initially before the trial court in opposition to

summary judgment cannot be raised for the first time on appeal.” Moranko

v. Downs Racing LP, 118 A.3d 1111, 1116 (Pa. Super. 2015).                  As we

previously stated:

       [A] non-moving party’s failure to raise grounds for relief in the
       trial court as a basis upon which to deny summary judgment
       waives those grounds on appeal. . . . A decision to pursue one
       argument over another carries the certain consequence of waiver
       for those arguments that could have been raised but were not.
       This proposition is consistent with our Supreme Court’s efforts to
       promote finality, and effectuates the clear mandate of our
       appellate rules requiring presentation of all grounds for relief to
       the trial court as a predicate for appellate review.

Rohrer v. Pope, 918 A.2d 122, 128 (Pa. Super. 2007).

       The trial court found the Appellants first, third, and fourth claims4

waived, as the Appellants failed to raise these arguments “when responding

to [Kennedy’s] request for partial summary judgment.”          Pa.R.A.P. 1925(a)

opinion, 8/14/18, at 6–7. The court explained its decision as follows:

       [The Appellants’] brief in opposition to [Kennedy’s] motion for
       partial summary judgment only discussed the issue of whether
       [the Appellants] had sufficiently answered the complaint. [The
       court was] not asked to consider whether it would be impossible
       or impractical for [the Appellants] to perform under the injunction.
       [The court was] also not asked to address the issue of an
       injunction on the merits. . . . [The Appellants] were very much
____________________________________________

4 The court referred to the first, third, and fourth issues in the Appellants’ Rule
1925(b) statement; these correspond directly to the first, third, and fourth
issues in the Appellants’ brief. See Pa.R.A.P. 1925(a) Opinion, 8/14/18, at
5–6; see also Brief of Appellant, at 5.

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       aware of what [Kennedy] was requesting in his counts for
       injunctive relief and specific performance. If [the Appellants] felt
       that it was impossible for them to take action pursuant to a
       preliminary injunction, then they should have raised this issue
       specifically in their answer, or in new matter, or at the very least,
       in their opposing brief.

Id.

       Kennedy’s Brief in Support of Motion for Summary Judgment highlighted

the following:     1) the standard by which permanent mandatory injunction

claims are assessed;5 2) the elements of a specific performance claim; and 3)

the nature of relief sought under both permanent mandatory injunction and

specific performance claims.         See Brief in Support of Plaintiff’s Motion for

Partial Summary Judgment, 12/7/17, at 7–13. At no point in the Appellants’

Brief in Opposition to Plaintiff’s Motion for Partial Summary Judgment do they

address the standard by which they believed permanent mandatory

injunctions claims should be evaluated,6 the elements of a specific
____________________________________________

5 Kennedy and the court referenced identical language outlining the standard
governing permanent mandatory injunctions.          See Brief in Support of
Plaintiff’s Motion for Partial Summary Judgment, 12/7/17, at 10; see also
Order Granting Plaintiff’s Motion for Summary Judgment, 5/17/18, at 14
(quoting J.C. Erlich Co., Inc, v. Martin, 979 A.2d 862, 864 (Pa. Super. 2009)
(“In order to establish a claim for a permanent mandatory injunction, the party
must establish his or her clear right to relief. However, unlike a claim for a
preliminary injunction, the party need not establish either irreparable harm or
immediate relief and a court may issue a final injunction if such relief is
necessary to prevent a legal wrong for which there is no adequate redress at
law.”)).

6 We note the Appellants incorrectly conflate the standard for preliminary
mandatory injunctions with that for permanent mandatory injunctions. See
Brief of Appellants, at 15 (citing Mazzie v. Commonwealth, 432 A.2d 985,
986 (Pa. 1981) (concerning preliminary mandatory injunction)); see also

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performance claim, or the impossibility of Kennedy’s requested relief pursuant

to either a permanent mandatory injunction or specific performance.7 See

Brief in Opposition to Plaintiff’s Motion for Partial Summary Judgment, 2/2/18,

at 1–11. Instead, the Appellants exclusively focus on whether there was a

genuine issue of material fact, entirely neglecting to entertain the arguments

put forth by Kennedy as to why he was “entitled to relief as a matter of law[.]”

Murphy, supra at 429 (emphasis added).

____________________________________________

supra at n.5. Further, the Appellants largely support their argument with
decisions from the Commonwealth Court—decisions by which we are not
bound. See Beaston v. Ebersole, 986 A.2d 876, 881 (Pa Super. 2009)
(“[D]ecisions rendered by the Commonwealth Court are not binding on this
Court”).

7 Pennsylvania has adopted the definition of legal impossibility put forth by
section 261 of the Restatement (Second) of Contracts, which states as follows:

       Where, after a contract is made, a party’s performance is made
       impracticable without his fault by the occurrence of an event the
       non-occurrence of which was a basic assumption on which the
       contract was made, his duty to render that performance is
       discharged, unless the language or the circumstances indicate to
       the contrary.

Restatement (Second) of Contracts § 261 (1981); accord Felix v. Giuseppe
Kitchens & Baths, Inc., 848 A.2d 943, 947 (Pa. Super. 2004) (“It is well[-
]settled that a party assumes the risk of his or her own inability to perform
contractual duties. A claim of personal inability to perform the actions
contemplated . . . does not rise to the level of legal impossibility.”). Though
the Appellants are not party to the agreement between Kennedy and ACNB,
the Appellants could potentially seek to have Kennedy removed as a guarantor
by refinancing the loan, an action explicitly contemplated by the Letter
Agreement. See Letter Agreement, at 1. (“McClarin Properties, LLC will pay
you [Kennedy] $50,000 the sooner of June 15, 015 [sic], a refinance of the
underlying loan or when the Todd Guaranty is removed (which in no case will
be more than 6 months from the date of execution).”) (emphasis added).

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      As the Appellants failed to argue the appropriateness of the standard

under which permanent mandatory injunctions are imposed, the elements of

a specific performance claim, or the impossibility of performing the relief

requested by Kennedy as “grounds for relief in the trial court as a basis upon

which to deny summary judgment[,]” the Appellants’ first, third, and fourth

claims are consequently waived.      Rohrer, supra at 128.

      The sole claim preserved for our review is, therefore, whether “the lower

court erred . . . when it determined . . . there were no material facts in dispute,

and drew all factual inferences in favor of [Kennedy]?” Brief of Appellants, at

5.   The Appellants argue the following errors rendered partial summary

judgment improper:       1) the Letter Agreement itself is ambiguous as to

whether the Appellants owed a duty to remove Kennedy as a guarantor,

necessarily making the court’s interpretation of the Letter Agreement an

impermissible inference in favor of the moving party; and 2) the lower court

improperly construed certain denials in the Appellants’ pleadings as

admissions and compounded that error by relying on that assessment in

determining whether there was a material difference of fact. See id. at 20–

26. We address these arguments in reverse order, as the first argument turns

on the second.

      This Court evaluates the remaining claim under the following, well-

established standard:

      Our review on an appeal from the grant of a motion for summary
      judgment is well-settled. A reviewing court may disturb the order
      of the trial court only where it is established that the court

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      committed an error of law or abused its discretion. As with all
      questions of law, our review is plenary.

      In evaluating the trial court’s decision to enter summary
      judgment, we focus on the legal standard articulated in the
      summary judgment rule. The rule states that where there is no
      genuine issue of material fact and the moving party is entitled to
      relief as a matter of law, summary judgment may be entered.
      Where the non-moving party bears the burden of proof on an
      issue, he may not merely rely on his pleadings or answers in order
      to survive summary judgment. Failure of a non-moving party to
      adduce sufficient evidence on an issue essential to his case and
      on which it bears the burden of proof . . . establishes the
      entitlement of the moving party to judgment as a matter of law.
      Lastly, we will view the record in the light most favorable to the
      non-moving party, and all doubts as to the existence of a genuine
      issue of material fact must be resolved against the moving party.

Murphy v. Duquesne University of the Holy Ghost, 777 A.2d 418, 429

(Pa. 2001) (citations and quotations omitted).

      The non-moving party cannot allege the existence of a genuine issue of

material fact when the issue alleged was generally denied in the pleading, as

“general denials constitute admissions where . . . specific denials are

required.” See Bank of America, N.A. v. Gibson, 102 A.3d 462, 466–67

(Pa. Super. 2014); see also Bayview Loan Servicing LLC v. Wicker, 163
A.3d 1039, 1044 (Pa. Super. 2017) (finding partial summary judgment

appropriate where answer contained general denial relating to mortgage

default, constituting admission); accord Pa.R.C.P. 1029(b) (“[A]verments in

a pleading to which a responsive pleading is required are admitted when not

denied specifically or by necessary implication. A general denial or a demand

for proof . . . shall have the effect of an admission.”).

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      To determine whether a denial has been made with sufficient specificity,

we review the responsive pleading as a whole. Cercone v. Cercone, 386
A.2d 1, at 6 (Pa. Super. 1978). This Court views denials as insufficient where

that denial fails to inform the trial court or the opposing party of the grounds

forming the basis for that denial. Compare Swift v. Milner, 538 A.2d 28,

30 (Pa. Super. 1988) (stating “Denied” to salient averments constituted

general denial manifesting admission, warranting judgment on pleadings) and

Stimely v. Dutchmen Mobile Homes, 361 A.2d 733, 737 (Pa. Super. 1976)

(“Defendant’s broad denial that appellant’s rejection was pursuant to the

Uniform Commercial Code cannot be said to have made Appellant or the lower

court aware that it specifically denied that she had given timely notice of the

rejection.”) (emphasis added) with U.S. Bank, N.A. v. Pautenis, 118 A.3d
386, 395–98 (Pa. Super. 2015) (finding mortgagor did not admit to amount

of indebtedness alleged in complaint when mortgagor presented sufficient

evidence to support a finding that she as unable to ascertain amount owed on

loans).

      At summary judgment, “it is [the non-moving party’s] responsibility to

show that a genuine issue of fact exists by affidavit or otherwise.” Johnson

v. Harris, 615 A.2d 771, 775 (Pa. Super. 1992). “Where the non[-]moving

party bears the burden of proof . . . he may not merely rely on his pleadings

or answers in order to survive summary judgment. Failure of a non-moving

party to adduce sufficient evidence on an issue essential to his case and on

which he bears the burden of proof establishes the entitlement of the moving

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party to judgment as a matter of law.” Krauss v. Trane U.S. Inc., 104 A.3d
556, 563 (Pa. Super. 2014).

       Our examination of the pleadings in their totality belies the Appellants’

assertion that the trial court erred in finding certain pleadings constituted

admissions.      See Bayview Loan Servicing LLC, supra at 1044.             The

Appellants’ admitted “Exhibit A” to the Plaintiff’s Complaint8 was a true and

accurate copy of the Letter Agreement, and that the Letter Agreement spoke

for itself.   See Answer with New Matter, 9/6/17, at 1.      In paragraph 8 of

Kennedy’s complaint, he stated “[p]ursuant to the Letter agreement, Kennedy

executed a Guaranty and Suretyship Agreement in January 2015 in favor of

ACNB,” Complaint, 8/17/17, at 2, to which the Appellants replied, “Admit.[9]”

Answer with New Matter, 9/6/17, at 2. Paragraph 36 of the complaint states,

“[a]s set forth in the Guaranty, in the event McClarin Defaults, Kennedy is

____________________________________________

8 Exhibit A to the Complaint, which was signed by both Kennedy and Stein,
states the guaranty was to be removed no more than “6 months from the date
of execution.” Letter Agreement, at 1–3. Moreover, the Letter Agreement
states Kennedy would be paid $50,000 at the earliest occurring of the three
following circumstances: 1) “June 15, 015 [sic] [;]” 2) “a refinance of the
underlying loan[;]” or 3) “when the Todd Guaranty is removed.” Letter
Agreement, at 1.

9 The Appellants argued in their motion opposing partial summary judgment
that the admission to paragraph 8 did not constitute an admission of
Kennedy’s complete performance under the Letter Agreement; they, however,
failed to provide any additional facts that would support that assertion. See
Defendants’ Response in Opposition to Plaintiff’s Motion for Partial Summary
Judgment, at 4; see also Johnson, supra at 775 (“it is [the non-moving
party’s] responsibility to show that a genuine issue of fact exists by affidavit
or otherwise.”).

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personally obligated to guaranty payment and performance of a $3,750,000

obligation of McClarin[,]” Complaint, 8/17/17, at 6, to which the Appellants

replied, “[t]he Kennedy Guaranty speaks for itself and any characterization

thereof by [Kennedy] is denied.” Answer with New Matter, 9/6/17, at 5. The

above-mentioned pleadings in Appellants’ answer constitute either an outright

admission or a general denial failing to inform Kennedy or the court as to the

nature of the Appellants’ disagreements with Kennedy’s averments, fatally

frustrating the second aspect of the Appellants’ argument. See Swift, supra

at 30; see also Stimely, supra at 737.

      Finding the trial court properly assessed the averments above to be

either general denials or outright admissions, we turn to the court’s

interpretation of the Letter Agreement. The court made the following findings

in determining there were no material facts at issue regarding the letter

agreement: 1) the terms of the Letter Agreement were clear, including the

provision that Kennedy would be released as a guarantor; 2) the Appellants

admitted Kennedy fulfilled his obligations under the Letter agreement; and 3)

the Appellants admitted Kennedy would be responsible for the entirety of

McClarin’s $3,750,000 obligation in the event McLarin defaulted on the loan.

See Order Granting Plaintiff’s Motion for Partial Summary Judgment, 5/17/18,

at 14–18.

      The Appellants initially asserted the Letter Agreement spoke for itself.

See Answer with New Matter, at 1 (“The Letter Agreement speaks for

itself[.]”). Kennedy, in support of partial summary judgment, stated “[t]he

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terms of the Letter Agreement are straightforward and unambiguous.”). Brief

in Support of Partial Summary Judgment, at 5. The Appellants never refuted

that assertion, instead focusing their brief in opposition to partial summary

judgment exclusively on whether denials had been made with sufficient

specificity, neglecting to assert that ambiguities in the Letter Agreement

raised a material question of fact. See Brief in Opposition to Plaintiff’s Motion

for Partial Summary Judgment, at 5–10. Consequently, we find the material

facts of this matter were not in dispute as a result of the Appellants’ failure to

specifically deny the veracity of material facts averred in Kennedy’s complaint,

and because the Appellants lack any support, via affidavit or otherwise, to

lend credence to the argument that there was an issue of material fact.10 See

Bayview Loan Servicing LLC, supra at 1044 (regarding general denials);

Johnson, supra at 775 (“[I]t is [the non-moving party’s] responsibility to

show that a genuine issue of fact exists by affidavit or otherwise.”).

       Order affirmed.

       Judge Dubow joins this Memorandum.

       Judge Nichols notes her dissent.

____________________________________________

10Beyond alleging ambiguities in the Letter Agreement, the Appellants have
not disputed any facts material to claims for specific performance or
mandatory permanent injunctions. See Brief of Appellant, at 20–26. We
decline to search for any such factual disputes. Bombar v. West American
Ins. Co., 932 A.2d 78, 93 (Pa. Super. 2007) (“This Court will not act as
counsel and will not develop arguments on behalf of an appellant.”).

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Judgment Entered.

Joseph D. Seletyn, Esq.
Prothonotary

Date: 12/9/2019

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