Court Opinion

ID: 9889514
Source: CourtListenerOpinion
Date Created: 2023-10-10 16:11:09.934617+00
Date Added: 2024-06-11T12:44:43.975343
License: Public Domain

J-A10019-23

NON-PRECEDENTIAL DECISION - SEE SUPERIOR COURT OP 65.37

  WAVERLY CUSTOM HOMES, LLC                    :   IN THE SUPERIOR COURT OF
                                               :        PENNSYLVANIA
                       Appellee                :
                                               :
                v.                             :
                                               :
  MARCUS AND JENNIFER SMITH                    :
                                               :
                       Appellants              :      No. 2267 EDA 2022

               Appeal from the Judgment Entered July 29, 2022
             In the Court of Common Pleas of Montgomery County
                      Civil Division at No(s): 2015-07919

BEFORE:      PANELLA, P.J., KING, J., and STEVENS, P.J.E.*

MEMORANDUM BY KING, J.:                              FILED OCTOBER 10, 2023

       Appellants, Marcus and Jennifer Smith, appeal from the judgment

entered in the Montgomery County Court of Common Pleas, in favor of

Appellee, Waverly Custom Homes, LLC. We affirm.

       The relevant facts and procedural history of this case are as follows. In

2013, after purchasing a home in Bryn Mawr, Pennsylvania, Appellants hired

Appellee as a general contractor to oversee several renovation projects for the

home. The parties executed a home improvement contract (“Agreement”) on

October 22, 2013, and Appellee began the renovation. In May 2014, however,

Appellants put the project on hold, explaining that the renovation expenses

had spiraled beyond their expectations.

____________________________________________

* Former Justice specially assigned to the Superior Court.
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       On April 13, 2015, Appellee filed a complaint against Appellants seeking

to recover unpaid invoices totaling $395,318.51 and other damages. After

Appellants filed preliminary objections, Appellee filed an amended complaint

on May 26, 2015, which included three counts: breach of contract, fraud and

misrepresentation, and defamation and slander. Appellants filed an answer

and new matter and asserted three counterclaims: breach of contract, fraud

and misrepresentation, and violations of the Unfair Trade Practices and

Consumer Protection Law (“UTPCPL”).1

       On October 11, 2018, Appellants filed a motion for summary judgment

asserting that the Agreement was a home improvement contract and

therefore was governed by the Home Improvement Consumer Protection Act

(“HICPA”).2     Appellants claimed that the contract was unenforceable by

Appellee as the contractor because it failed to comply with the HICPA

requirements governing such contracts.           Appellee filed a response in

opposition to the motion for summary judgment, together with a motion for

leave to amend its complaint, requesting to amend the first count to include

breach of contract and quantum meruit.

       The trial court held argument on Appellants’ motion for summary

judgment and Appellee’s motion for leave to amend its complaint. On March

____________________________________________

1 73 P.S. §§ 201-1 to 201-9.3.

2 73 P.S. §§ 517.1 to 517.18.

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13, 2019, the court found the Agreement was “invalid and unenforceable

under HICPA.” (Trial Court Opinion, filed 3/13/19, at 5). The court explained

that the Agreement failed to comply with HICPA because it “fails to include ‘a

description of the work to be performed, the materials to be used and a set of

specifications that cannot be changed without a written change order signed

by the owner and the contractor.’” (Id. at 6) (quoting 73 P.S. § 517.7(a)(7)).

Furthermore, the court found that the Agreement “fails to include ‘the total

sales price due under the contract.’” (Id.) (quoting 73 P.S. § 517.7(a)(8)).

Ultimately, the court held that the “contract is not ‘valid or enforceable’ [and

Appellants] are entitled to summary judgment in their favor on Count I of the

complaint to the extent that it asserts a claim for breach of the contract.”

(Id.)

        The court then turned to whether Appellee was entitled to bring a claim

for quantum meruit. The court explained that the law clearly establishes that

when a contractor fails to comply with section 7(a) of HICPA, they “can still

assert a claim for quantum meruit, independent of its unenforceable home

improvement contract.” (Id. at 8). The court recognized, however, that if

Appellee’s amended complaint did not assert a claim for quantum meruit, the

belated addition of such claim would now be barred by the statute of

limitations.   (Id. at 8-9).   The court acknowledged that Appellee did not

expressly plead a claim for quantum meruit. Nevertheless, the court noted

that in Count II of the amended complaint, which pled a claim for fraud and

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misrepresentation,      Appellee     averred:    “These   misrepresentations   were

deliberately designed to induce [Appellee] to provide work, valuable services

and materials, all of which were used in the construction and improvements

to [Appellants’] home, and all of which unjustly enriched the defendants.”

(Id. at 11-12) (quoting Amended Complaint, filed 5/26/15, at ¶ 33). Based

on these averments in the amended complaint, the court decided that Appellee

sufficiently pled a claim for quantum meruit. (Id. at 14). Accordingly, the

court permitted Appellee to amend its complaint “to ‘amplify’ the claim,

because it will not be introducing a new cause of action after the expiration of

the statute of limitations.” (Id.) (internal footnote omitted).

       Thereafter, Appellee filed a second amended complaint alleging: Count

I–Quantum Meruit/Unjust Enrichment; Count II–Fraud and Misrepresentation;

and Count III–Defamation and Slander. (Second Amended Complaint, filed

3/13/19).     Appellants responded and raised the following counterclaims:

Count I–Breach of Contract; Count II–Fraud and Misrepresentation; Count III–

Violation of the UTPCPL; and Count IV–Violation of HICPA. (Answer and New

Matter, filed 4/8/19).

       The case proceeded to trial on March 1-4, 2022.3 During trial, a short

time after Appellants began their case-in-chief, the parties reached an

____________________________________________

3 By agreement, the jury would hear all claims and counterclaims, and it would

render an advisory verdict for any claims that did not afford the moving party
the right to a jury trial. (See Trial Court Opinion, filed 9/26/22, at 1-2). Prior
(Footnote Continued Next Page)

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impasse about the viability of Appellants’ breach of contract counterclaim,

based upon the earlier ruling by the trial court deeming the contract invalid

and unenforceable.       Specifically, “[Appellants] were continually seeking to

present evidence of the [Agreement] to prove the breach of contract

[counter]claim despite the earlier ruling…deeming the contract to be invalid

and unenforceable.” (Trial Court Opinion, filed 3/10/22, at 6).

       The following exchange then took place:

          THE COURT: It appears to me that at this particular juncture
          based on this issue and the argument on this particular line
          of questioning that is being presented tees up for us the
          issue of whether the contract of October 22, 2013, is
          enforceable by the owners against the contractor. This
          general case law or law that might be applicable,
          [Appellants] say yes. [Appellee] says no.

          We’re going to take a break, and in fairness to all the
          parties, I’m going to allow counsel to brief that issue so we
          can bring that issue to a head. If you all are in agreement,
          bring it to a head, go home, brief it, go back to your offices,
          brief it, and come argue that tomorrow morning, and we can
          get to the bottom of this breach of contract claim that’s
          contained in [Appellants’] counterclaim.

          Is that acceptable, [Appellants’ counsel]?

          [APPELLANTS’ COUNSEL]: Yes, Your Honor.

          THE COURT: Is that acceptable?

          [APPELLEE’S COUNSEL]: Yes, Your Honor.

(N.T. Trial, 3/2/22, at 228).

____________________________________________

to trial, the parties stipulated to dismiss Appellee’s claims at Count II–Fraud
and Misrepresentation and Count III–Defamation and Slander.

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      The next day, after considering the parties’ briefs and arguments, the

court found that Appellants’ breach of contract counterclaim was not viable

and “dismissed the [b]reach of [c]ontract [counter]claim after consideration

of the arguments; in accordance with the agreement of the parties to consider

and determine the viability of the breach of contract claim based on the

[Agreement].”    (Trial Court Opinion, filed 3/10/22, at 7-8).    Following the

dismissal of their counterclaim, Appellants sought to amend their counterclaim

to include an “implied in fact” contract cause of action. The trial court denied

this request noting that there was no reference to an “implied in fact” claim in

Appellants’ counterclaim.

      The trial continued and the jury returned its verdict on March 4, 2022.

The jury found in favor of Appellee on its quantum meruit claim in the amount

of $387,685.31.    With respect to Appellants’ counterclaim for fraud and

misrepresentation, the jury found in favor of Appellee. In addition, the jury

rendered an advisory verdict in favor of Appellee with respect to Appellants’

UTPCPL claim, and, despite the court directing a verdict in favor of Appellants

for their HICPA claim, the jury awarded no damages to Appellants. The trial

court partially adopted the advisory jury verdicts, with the exception of the

verdict as to damages for the violation of HICPA. As to that claim, the court

awarded Appellants $5,000.00 in damages.

      On March 15, 2022, Appellee filed a motion to mold the verdict, seeking

prejudgment interest. The court granted the motion on June 13, 2022, and

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on July 27, 2022, the court awarded Appellee pre-judgment interest in the

amount of $154,167.91. Meanwhile, Appellants filed a motion for post-trial

relief on March 21, 2022, which the trial court granted in part, reducing

Appellee’s award to $316,062.00.       The court denied relief on Appellants’

request for a new trial based on their assertion that the dismissal of the breach

of counterclaim was an error.

      On July 29, 2022, Appellee filed a praecipe for entry of judgment, and

the prothonotary entered judgment in favor of Appellee and against Appellants

in the amount of $470,229.91. Appellants filed a timely notice of appeal on

Monday, August 29, 2022. The next day, the court ordered Appellants to file

a concise statement of errors complained of on appeal per Pa.R.A.P. 1925(b).

Appellants complied and filed their concise statement on September 20, 2022.

      Appellants raise the following two issues on appeal:

         1. Did the trial court err by allowing [Appellee] to amend its
         Complaint to assert a quantum meruit claim after the
         statute of limitations for such a claim had expired?

         2. Did the trial court err by dismissing [Appellants’]
         counterclaim for breach of contract, where that ruling
         violated [HICPA’s] text and purpose, and was procedurally
         improper?

(Appellants’ Brief at 6).

      In their first issue, Appellants contend that the trial court erred when it

granted Appellee’s motion to amend its complaint to assert a quantum meruit

claim after the court had already granted partial summary judgment in favor

of Appellants on Appellee’s breach of contract claim. Appellants argue the

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court lacked authority to allow Appellee to add a quantum meruit claim

because the four-year statute of limitations had already expired. Appellants

insists the trial court erred in finding that Appellee had previously asserted a

quantum meruit claim in its initial amended complaint based merely on

Appellee’s mention of “unjust enrichment” in its fraud and misrepresentation

claim.   Appellants emphasize that quantum meruit is a separate theory of

recovery than unjust enrichment, and the court erred in relying on Appellee’s

mention of unjust enrichment to form the basis of a quantum meruit claim.

Appellants conclude the Appellee’s claim for quantum meruit was time-barred,

and this Court must grant relief. We disagree.

      “When reviewing a trial court’s ruling on a petition to amend a

complaint, we grant the trial court a broad discretion in evaluating the petition.

We will not disturb the sound discretion of the trial court absent an abuse of

discretion.” Diaz v. Schultz, 841 A.2d 546, 549 (Pa.Super. 2004), appeal

denied, 578 Pa. 709, 853 A.2d 362 (2004) (internal quotation marks and

citation omitted).

      Amendments to pleadings are governed by Rule of Civil Procedure 1033,

which provides in part:

         (a) A party, either by filed consent of the adverse party or
         by leave of court, may at any time change the form of
         action, add a person as a party, correct the name of a party,
         or otherwise amend the pleading. The amended pleading
         may aver transactions or occurrences which have happened
         before or after the filing of the original pleading, even
         though they give rise to a new cause of action or defense.
         An amendment may be made to conform the pleading to the

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         evidence offered or admitted.

Pa.R.C.P. 1033(a).

      “Leave to amend lies within the sound discretion of the trial court and

the right to amend should be liberally granted at any stage of the proceedings

unless there is an error of law or resulting prejudice to an adverse party.” Hill

v. Ofalt, 85 A.3d 540, 557 (Pa.Super. 2014) (citation omitted).             See

Morrison Informatics, Inc. v. Members 1st Fed. Credit Union, 635 Pa.

636, 646, 139 A.3d 1241, 1246 (2016) (noting that “amendments to pleadings

under Rule of Civil Procedure 1033 should be granted with liberality so as to

secure determination of cases on their merits whenever possible”) (citation

and internal quotation marks omitted; emphasis in original).

      Nevertheless, an amendment should not be allowed where it would

present an entirely new cause of action where the statute of limitations has

expired. Phillips v. Lock, 86 A.3d 906, 915 (Pa.Super. 2014). “A proposed

amendment of the complaint which adds or changes the theory of recovery

upon which relief is sought through the introduction of new factual allegations

generally constitutes a new cause of action.” Rachlin v. Edmison, 813 A.2d

862, 871 (Pa.Super. 2002) (citing Reynolds v. Thomas Jefferson

University Hospital, 676 A.2d 1205, 1210-11 (Pa.Super. 1996), appeal

denied, 549 Pa. 703, 700 A.2d 442 (1996)).         On the other hand, “if the

proposed amendment does not change the cause of action but merely

amplifies that which has already been averred, it should be allowed even

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though the [s]tatute of [l]imitations has already run.” Stalsitz v. Allentown

Hosp., 814 A.2d 766, 776 (Pa.Super. 2002)

     “Quantum meruit is an equitable remedy to provide restitution for unjust

enrichment in the amount of the reasonable value of services.”     Durst v.

Milroy Gen. Contracting, Inc., 52 A.3d 357, 360 (Pa.Super. 2012) (quoting

Am. & Foreign Ins. Co. v. Jerry’s Sport Ctr., Inc., 606 Pa. 584, 594 n.8,

2 A.3d 526, 532 n.8 (2010)).     Our Supreme Court has explained that “a

quantum meruit action sounds in quasi-contract, a form of restitution, and is

made out where one person has been unjustly enriched at the expense of

another.” Shafer Elec. & Const. v. Mantia, 626 Pa. 258, 262 n.3, 96 A.3d

989, 992 n.3 (2014) (internal citations, quotation marks, and brackets

omitted).

     “Therefore, a claim of quantum meruit raises the issue of whether a

party has been unjustly enriched, and in order to prove such claim a party

must successfully prove the elements of unjust enrichment.”      Mitchell v.

Moore, 729 A.2d 1200, 1202 n.2 (Pa.Super. 1999), appeal denied, 561 Pa.

698, 751 A.2d 192 (2000).        The elements necessary to prove unjust

enrichment are as follows:

        (1) benefits conferred on defendant by plaintiff; (2)
        appreciation of such benefits by defendant; and (3)
        acceptance and retention of such benefits under such
        circumstances that it would be inequitable for defendant to
        retain the benefit without payment of value. The application
        of the doctrine depends on the particular factual
        circumstances of the case at issue. In determining if the
        doctrine applies, our focus is not on the intention of the

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         parties, but rather on whether the defendant has been
         unjustly enriched.

Id. at 1203–04 (citation and emphasis omitted).

      Instantly, the trial court explained that in seeking to amend the

complaint,

         [c]ounsel for [Appellee] cited paragraph 33 of the
         [c]omplaint. This paragraph, included in Count II for fraud
         and misrepresentation, avers: “These misrepresentations
         were deliberately designed to induce [Appellee] to provide
         work, valuable services and materials, all of which were
         used in the construction and improvements to [Appellants’]
         home, and all of which unjustly enriched the
         defendants.” (Amended Complaint, at ¶ 33) (emphasis
         added). [Appellee] argues that the reference to unjust
         enrichment of [Appellants] is sufficient to place them on
         notice of a claim for quantum meruit. …

(Trial Court Opinion, 3/13/19, at 12) (footnotes omitted, citation formatting

provided). The trial court continued:

         [T]he fact remains that [Appellee] has alleged in its
         [c]omplaint     that    it  performed    construction    and
         improvement services at the request of [Appellants],
         ([Amended Complaint] at ¶¶ 6, 9, 15, 33), that [Appellants]
         refused to pay for such services, (Id. at ¶ 34), and that
         [Appellants] were “unjustly enriched” (Id. at ¶ 33)—“a
         synonym for quantum meruit.” N.E. Fence & Iron Works,
         Inc. v. Murphy Quigley Co., 933 A.2d 664, 667 (Pa.Super.
         2007). These are the necessary elements of a claim by a
         home improvement contractor for quantum meruit. Durst,
         supra at 360.         Accordingly, the [c]ourt holds that
         [Appellee’s] [c]omplaint is sufficient to assert a claim for
         quantum meruit. It follows that [Appellee] may amend its
         [c]omplaint to “amplify” the claim, because it will not be
         introducing a new cause of action after the expiration of the
         statute of limitations.

(Id. at 14) (footnotes omitted, citation formatting provided).

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      Upon review, we see no abuse of discretion in the trial court’s conclusion

that Appellee’s proposed amendment to the complaint did not constitute

adding a wholly new cause of action after expiration of the statute of

limitations.   Specifically, Appellee did not assert new facts to establish its

entitlement to relief, as its claim for quantum meruit was based on the same

facts previously alleged in the initial amended complaint.       See Rachlin,

supra. Rather, Appellee merely sought to “amplify” the allegations previously

stated. See Stalsitz, supra. Based on the claims raised in Appellee’s initial

amended complaint as set forth above and recognizing that leave to amend a

complaint should be freely given, we see no abuse of discretion in the trial

court’s ruling to permit Appellee to amend its complaint and include a claim

for quantum meruit, where the previous complaint had already pled all the

elements necessary to establish such claim.      See Morrison Informatics,

Inc., supra; Hill, supra. Accordingly, Appellants’ first issue is meritless.

      In their second issue, Appellants argue that the trial court erred when it

dismissed their counterclaim for breach of contract during trial. Within this

issue, Appellants present three sub-arguments. First, Appellants insist the

court erred in dismissing the counterclaim because HICPA only bars

contractors from attempting to enforce an invalid contract and they, as

homeowners, should be permitted to enforce the Agreement.              Second,

Appellants contend the trial court erred when it denied their request to amend

their counterclaim to assert a claim for breach of an implied in fact contract.

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Finally, Appellants claim that the trial court erred procedurally when it

dismissed their counterclaim in the middle of trial without a pending motion

to dismiss or motion for a directed verdict. We discuss each of these sub-

arguments separately.

      Regarding Appellants’ first sub-argument, we initially note that the trial

court correctly decided that the Agreement did not comply with Section

517.7(a) of HICPA. Specifically, the Agreement failed to include a description

of the work to be performed, materials used, and a set of specifications that

cannot be changed without a written change order, in violation of Section

517.7(a)(7). See 73 P.S. § 517.7(a)(7). Additionally, the Agreement did not

include the total sales price due under the contract, in violation of Section

517.7(a)(8). See 73 P.S. § 517.7(a)(8). As our Courts have made clear,

HICPA requires compliance with all factors set forth at Section 517.7(a) to

validly create a construction contract under the statute.     Shafer Elec. &

Const. v. Mantia, 626 Pa. 258, 268, 96 A.3d 989, 996 (2014). Appellants

do not dispute the trial court’s finding that the contract did not comply with

the requirements set forth in Section 517.7(a); however, they suggest that

this only renders the Agreement invalid or unenforceable by the contractor

and insist that the Agreement remains valid and enforceable by the

homeowner.

      In Dippel v. Brunozzi, 365 Pa. 264, 267, 74 A.2d 112, 114 (1950),

our Supreme Court held that an agreement between parties which violates a

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provision of a statute is illegal, unenforceable, and void ab initio. The Court

further explained that such contract

         cannot, under any circumstances, be made the basis of a
         cause of action. The law when appealed to will have nothing
         to do with it, but will leave the parties just in the condition
         in which it finds them. If they have fully executed their
         unlawful contract, the law will not dist[ur]b them in the
         possession of what each has acquired under it. If one has
         executed in whole or in part, the law turns a deaf ear when
         he pleads for its aid to compel the other to do as much.

Id. (citation omitted).

      Appellants suggested that under Peyton v. Margiotti, 398 Pa. 86, 156

A.2d 865 (1959), they may still enforce a contract that has been invalidated

by statute. In Peyton, our Supreme Court held that a contract agreement

that provided for a fee wholly contingent upon success of a petition for pardon

was against public policy. Nevertheless, the Court declined to find the contract

void. It explained that the parties, an attorney and client, were not equal,

and therefore “despite the essential invalidity of the contingent fee agreement

the law should be allowed to favor the plaintiffs because of the circumstances.”

Peyton, supra at 93, 156 A.2d at 869.

      Appellants have not cited any case where either this Court or our

Supreme Court have expanded the holding of Peyton into circumstances

similar to those before us. As the parties to the Agreement at issue were not

an attorney and client on an “unequal” playing field like in Peyton, that case

is distinguishable from the facts present here. Therefore, we agree with the

trial court that Appellants are not entitled to enforcement of a void and

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unenforceable contract. See Dippel, supra.

      With respect to their second sub-argument, the trial court explained its

denial of Appellants’ request to amend its counterclaim to include a breach of

an implied in fact contract, as follows:

         Following the ruling dismissing [Appellants’] breach of
         contract [counter]claim, [Appellants] sought to amend their
         counterclaim to include an implied-in-fact contract cause of
         action referencing the similar circumstances in which [the
         court] allowed [Appellee] to amend [its] pleadings.
         However, the circumstance [Appellants] found themselves
         in was not akin to that of the [Appellee], previously. In
         allowing [Appellee] to amend its Complaint, [the court]
         found that [Appellee’s] complaint adequately asserted
         language that put [Appellants] on notice of a quantum
         meruit/unjust enrichment claim which thereby preserved
         the claim from being barred by the statute of limitations.
         Presently, [the trial court] was unable to find any such
         language that would put [Appellee] on notice of an implied-
         in-fact contract claim. In [Appellants’] Answer, New Matter,
         and Counter Claim to the Second Amended Complaint, [the
         trial court] only found reference made to the Contract itself.
         The “Contract” actually being a defined term in the
         [counterclaim] asserted by [Appellants].         [Appellants]
         defined “Contract” as “a written contract” that was entered
         into on or about October 23, 2013. [Appellants] at no point
         in their pleadings aver an implied-in-fact contract claim that
         would allow this [c]ourt to find that [Appellee] was put on
         notice of such a claim. Moreover, any new claim would be
         barred by the statute of limitations. Consequently, this
         [c]ourt denied [Appellants’] request to amend their
         pleadings to include an implied-in-fact contract claim.

(Trial Court Opinion, filed 3/10/22, at 8).   We agree with the trial court’s

reasoning and see no abuse of discretion in the court’s denial of Appellants’

petition to amend its counterclaim. See Phillips, supra; Hill, supra.

      Concerning their final sub-argument in their second issue on appeal,

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that the trial court committed a procedural error when it dismissed their

counterclaim for breach of contract in the midst of trial, we must initially

consider whether Appellants properly preserved this issue for appeal.

         In order to preserve an issue for appellate review, a party
         must make a timely and specific objection at the appropriate
         stage of the proceedings before the trial court. Failure to
         timely object to a basic and fundamental error will result in
         waiver of that issue. On appeal the Superior Court will not
         consider a claim which was not called to the trial court’s
         attention at a time when any error committed could have
         been corrected.

Hong v. Pelagatti, 765 A.2d 1117, 1123 (Pa.Super. 2000) (citations

omitted).

      Here, our review of the record confirm that the parties agreed during

trial to the procedure suggested by the trial court—namely, that the parties

brief the issue and argue their respective positions, mid-trial, so that the trial

court could determine whether the breach of contract counterclaim was or was

not a valid and viable claim.     (See N.T. Trial, 3/2/22, at 228).      Because

Appellants did not make a timely, specific objection to this procedure, we

conclude that they did not preserve this issue for appeal. See Hong, supra.

Accordingly, we affirm.

      Judgment affirmed.

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Date: 10/10/2023

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