Court Opinion

ID: 9374224
Source: CourtListenerOpinion
Date Created: 2023-02-22 17:07:42.215112+00
Date Added: 2024-06-11T17:16:45.647478
License: Public Domain

J-S22018-22

NON-PRECEDENTIAL DECISION - SEE SUPERIOR COURT I.O.P. 65.37

    JP MORGAN CHASE BANK, N.A.                 :   IN THE SUPERIOR COURT OF
                                               :        PENNSYLVANIA
                                               :
                v.                             :
                                               :
                                               :
    SVETLANA USTINOVA                          :
                                               :
                        Appellant              :   No. 344 EDA 2022

              Appeal from the Order Entered December 15, 2021
    In the Court of Common Pleas of Monroe County Civil Division at No(s):
                               4613-CV-2020

BEFORE:       BOWES, J., McCAFFERY, J., and SULLIVAN, J.

MEMORANDUM BY McCAFFERY, J.:                         FILED FEBRUARY 22, 2023

       In this guaranty contract matter, Svetlana Ustinova (Appellant) takes

this counseled appeal from the order entered in the Monroe County Court of

Common Pleas, granting summary judgment in favor JP Morgan Chase Bank,

N.A (Bank).1         Appellant avers the trial court erred in granting summary

judgment where: (1) discovery was not completed; (2) the guaranty contract

was ambiguous, and this issue of ambiguity should have been submitted to a

jury to resolve; (3) the contract was unconscionable because Appellant did

not fully understand its terms; (4) the contract was impossible to perform;

____________________________________________

1 On the following day, December 16, 2021, the trial court also entered
judgment in favor of Bank in the amount of $204,685.86.
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and (5) parol evidence should have been admitted to show she did not

understand the terms of the contract. We affirm.

                               I. Procedural History

       We summarize the relevant pleadings.       On August 27, 2020, Bank

commenced by instant action by filing a complaint, which averred the

following: on July 31, 2017, Best Video Studio LLC (Borrower) executed a

“Promissory Note,” in favor of Bank, for the amount of $200,000. On the

same day, Appellant executed a “Commercial Guaranty” (the contract), which

provided she “absolutely and unconditionally guarantees and promises to pay”

the indebtedness of Borrower.2 See Commercial Guaranty, 7/31/17, at 1,

Exh. B to Bank’s Complaint, 8/27/20. It is undisputed that Borrower defaulted

on the promissory note. Bank accelerated the full amount of the indebtedness

under the terms of that note, but Appellant has failed to cure the Borrower’s

default as required by the guaranty contract. Bank thus demanded judgment

against Appellant in the amount of $203,895.59.3 Appellant filed a counseled

answer and new matter.

____________________________________________

2 The pleadings do not explain the relationship between Appellant and
Borrower.

3This amount included: (1) the principal balance of $190,925.38; (2) interest
of $11,915.92; and (3) late fees and costs of $1,054.29. Bank’s Complaint at
3.

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      On February 26, 2021, the trial court issued a case management order,

which stated discovery shall be completed by November 30, 2021. Prior to

that deadline, however, on September 16, 2021, Bank filed the underlying

motion for summary judgment.

      Appellant filed an answer and brief, arguing: (1) summary judgment

should be denied because this matter is not ripe, where the discovery deadline

had yet to    pass and     Appellant had not deposed Bank’s corporate

representative or fact witnesses; (2) the contract was unconscionable because

“there is a dispute over whether [Appellant] understood the term[s] she was

signing[;]” and (3) the contract was ambiguous, where Appellant believed

“she merely signed a Guaranty on behalf of [B]orrower and not a personal

guaranty” and the parties disagreed as to whether the contract required Bank

to seek payment first from Borrower before seeking payment from the

guarantor.   Appellant’s Brief in Opposition to Bank’s Motion for Summary

Judgment, 11/8/21, at 4-5 (unpaginated) (Brief in Opposition to SJ). Finally,

Appellant set forth case law about the impossibility of a contract, but

presented no discussion on the application of that doctrine to this case. See

id. at 3-4. Relevant to her argument on appeal, Appellant stated elsewhere

that Borrower was “in active Chapter 11 bankruptcy.” Appellant’s Answer to

Bank’s Motion for Summary Judgment, 9/20/21, at 2 (Appellant’s Answer to

SJ) (unpaginated).

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      On December 15, 2021, the trial court granted Bank’s motion for

summary judgment and directed judgment to be entered in its favor in the

requested amount, $204,685.86. Appellant filed a motion for reconsideration,

which was denied. She took a timely appeal and complied with the court’s

order to file a Pa.R.A.P. 1925(b) statement of errors complained of on appeal.

                  II. Statement of Questions Presented

      Appellant presents the following issues for our review:

      1. Did the trial court abuse its discretion when it decided the
      Motion for Summary Judgment while discovery in this matter had
      yet to be completed and, as the record was incomplete, there was
      an absence of material facts?

      2. Did the trial Court err as a matter of law when it granted
      [Bank’s] Motion for Summary Judgment by failing to take the facts
      in the light most favorable to [Appellant] by:

          a. Finding the contract terms unambiguous when in fact the
          terms of the contract were ambiguous to the extent that
          [Appellant] did not understand terms of the Guaranty;

          b. Failed to find the Guaranty clause in question
          unconscionable because [Appellant] did not understand what
          she was signing, and this left [Appellant] with a lack of
          meaningful choice;

          c. Failing to find the contract was impossible to perform
          because [Borrower] had filed for Bankruptcy, and this would
          make performance of the Guaranty clause impossible to
          perform; and

          d. Failing to consider allowing parol[ ] evidence that
          [Appellant] thought she was signing the Guaranty on behalf
          of the borrower and not a personal Guaranty?

Appellant’s Brief at 3-4.

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                          III. Standard of Review &

         General Summary Judgment and Contract Principles

      At this juncture, we consider the following principles. In reviewing a

challenge to the entry of summary judgment, we may disturb the trial court’s

order “only where it is established that the court committed an error of law or

abused its discretion. As with all questions of law, our review is plenary.”

Pass v. Palmiero Auto. of Butler, Inc., 229 A.3d 1, 5 (Pa. Super. 2020)

(citation omitted). Pennsylvania Rule of Civil Procedure 1035.2 provides

      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 nonmoving 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 he bears the burden of
      proof establishes the entitlement of the moving party to judgment
      as a matter of law. Lastly, we will review the record in the light
      most favorable to the nonmoving party, and all doubts as to the
      existence of a genuine issue of material fact must be resolved
      against the moving party.

Id. (citation omitted).

      With respect to contract interpretation, this Court has stated:

      The interpretation of any contract is a question of law and this
      Court’s scope of review is plenary. Moreover, “[w]e need not defer
      to the conclusions of the trial court and are free to draw our own
      inferences. In interpreting a contract, the ultimate goal is to
      ascertain and give effect to the intent of the parties as reasonably
      manifested by the language of their written agreement.” . . .

Humberston v. Chevron U.S.A., Inc., 75 A.3d 504, 509-10 (Pa. Super.

2013) (citations omitted).

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      . . . If contractual terms are clear and unambiguous, they are
      deemed the best reflection of the parties’ intent. If they are
      ambiguous, it is permissible to ascertain their meaning through
      parol (i.e., extrinsic) evidence. Contractual terms are ambiguous
      “if they are subject to more than one reasonable interpretation
      when applied to a particular set of facts.” A contract is not
      ambiguous, however, merely because the parties do not agree on
      its construction.

Pass, 229 A.3d at 5 (citations omitted).

                       IV. Completion of Discovery

      We first summarize that Appellant has averred the underlying contract

is ambiguous, unconscionable, as well as impossible to perform. Although the

trial court stated its reasons for denying relief on each claim, Appellant fails

to address, let alone dispute, them.    Instead, on appeal, Appellant merely

presents the same broad claims that have been rejected by the trial court.

      In her first issue, Appellant reiterates her assertion that summary

judgment was premature because discovery was not completed. The sum of

her argument is that there have not been any depositions, answers to

interrogatories, or admissions on which she could establish a genuine issue of

material fact. Appellant’s Brief at 8-9. We conclude no relief is due.

      In considering her argument, the trial court reviewed the discovery in

this matter.   As stated above, a case management order was issued on

February 26, 2021, and it directed that discovery was to be completed by

November 30, 2021.         The court noted Appellant served Bank with

interrogatories and requests to produce documents, and Bank provided its

responses on April 11th. The court pointed out Appellant had not alleged any

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deficiencies in Bank’s responses, “never sought to extend” the discovery

deadline, and did not explain why additional discovery was not taken before

Bank’s September 16th filing of the summary judgment motion. Trial Ct. Op.,

12/15/21, at 3, 4. The court reasoned:

      [Appellant] claimed to want depositions and/or to subpoena
      witnesses after the [summary judgment] motion had been filed.
      There was plenty of time to do those things prior to the filing of
      the . . . motion, but no action was taken by [Appellant].
      Furthermore, [Appellant] had not even filed a motion . . . to
      compel discovery. [Appellant] took no action, despite reasonable
      time given to complete discovery [before] the motion [was] filed.
      Therefore, we do not find that the [summary judgment] motion
      was filed prematurely.

Id. at 4-5 (emphasis added).

      Appellant does not address, let alone dispute, any of this discussion by

the trial court. She has not —in the trial court proceedings nor on appeal —

identified any issue of fact that requires additional discovery. Accordingly, we

do not disturb the court’s well-reasoned rationale. See Pass, 229 A.3d at 5.

                           V. Contract Ambiguity

      In her second issue, Appellant avers the trial court erred in failing to

take the facts in the light most favorable to her, and in not finding the guaranty

clause is ambiguous. Although “[t]he guaranty clause states that [Appellant]

absolutely and unconditionally guaranteed or promised to pay for [Borrower’s]

indebtedness[,]” Appellant posits that she believed “she was signing on behalf

of the borrower and not herself.” Appellant’s Brief at 9, 10. She reasons that

“[i]f she could have” interpreted the contract in this manner, then “another

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person could have read the contract in the same way.” Id. at 10. Appellant

further claims that while she believes the contract requires Bank to seek

payment first from Borrower before seeking payment from the guarantor,

Bank denies there is such a requirement. Id. Appellant contends, as she did

before the trial court, that contract interpretation is a factual issue for the trier

of fact. See id.; Appellant’s Brief in Opposition to SJ at 6. No relief is due.

      As the trial court summarized, a guaranty is “a promise to pay the debt

of another when the creditor is unable, after due prosecution, to collect the

amount owed by the debtor.” See Osprey Portfolio, LLC v. Izett, 67 A.3d

749, 755 (Pa. 2013). Here, the guaranty contract provided:

      CONTINUING UNLIMITED GUARANTY. For good and valuable
      consideration,     [Appellant]  (“Guarantor”)     absolutely   and
      unconditionally guarantees and promises to pay [Bank]
      (“Lender”) . . . the indebtedness (as the term is defined below) of
      [Borrower] to [Bank] on the terms and conditions set forth in this
      Guaranty. Under this Guaranty, the liability of Guarantor is
      unlimited and the obligations of Guarantor are continuing.

                                    *    *     *

      NATURE OF GUARANTY. The Guaranty is a guaranty of payment
      and not of collection. Therefore, [Bank] can insist that the
      Guarantor pay immediately, and [Bank] is not required to attempt
      to collect first from the Borrower, any collateral, or any other
      person liable for the indebtedness.

Commercial Guaranty at 1.

      The trial court found the above terms were clear and unambiguous:

“[They] set forth that [Appellant] was obligated on the debt of the Borrower.”

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Trial Ct. Op. at 5-6. The court rejected Appellant’s reasoning that the contract

was ambiguous simply because she did not understand its terms:

      [Appellant] has not identified what terms she didn’t understand or
      that were ambiguous. Nor does the Guaranty appear to be
      ambiguous or difficult to understand. [Appellant’s] assertion is
      self-serving and insufficient to overcome a motion for summary
      judgment.

Id. at 6.

      Again, Appellant does not address or dispute this rationale. We agree

with the court’s reasoning.      See Pass, 229 A.3d at 5 (contract is not

ambiguous merely because the parties do not agree on its construction).

Furthermore, Appellant is mistaken that the interpretation of a contract is an

issue of fact for a jury. See Humberston, 75 A.3d at 509 (the interpretation

of a contract is a question of law). Finally, we add that Appellant’s assertion —

that she was signing the guaranty contract on behalf of Borrower — is not

logical. Under Appellant’s reading, Borrower would contract itself to be both

the borrower and guarantor of the same loan. For all the foregoing reasons,

we do not disturb the trial court’s findings.

                     VI. Unconscionability of Contract

      In her third issue, Appellant avers the trial court erred in not finding the

contract was unconscionable. In support, her sole arguments are that: (1)

because she “did not fully understand” the contract terms, she had no

“meaningful choice as to what she signed,” and (2) “the contract term was

unreasonably favorable to [the] drafter because [Bank’s interpretation] would

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allow [Bank] to go after [Appellant] without going after [B]orrower first and

to go after a significantly large sum of money.” Appellant’s Brief at 12. This

claim is meritless.

      This Court has explained:

      Whether a contract is unconscionable is a matter of law.
      [U]nconscionability is a defensive contractual remedy that relieves
      a party from an unfair contract or an unfair portion of a contract.
      Further, in general, unconscionability has been recognized to
      include an absence of a meaningful choice on the part of one of
      the parties together with contract terms that are unreasonably
      favorable to the other party. “Unconscionability [does] nothing
      more than reaffirm the most basic tenet of the law of contracts —
      that parties must be free to choose the terms to which they will
      be bound.”

Centric Bank v. Sciore, 263 A.3d 31, 39 (Pa. Super. 2021) (citations

omitted).

      “The party challenging the agreement bears the burden of proof.”

Cardinal v. Kindred Healthcare, Inc., 155 A.3d 46, 53 (Pa. Super. 2017).

      An unconscionability analysis requires a two-fold determination:
      (1) that the contractual terms are unreasonably favorable to the
      drafter (“substantive unconscionability”), and (2) that there is no
      meaningful choice on the part of the other party regarding the
      acceptance of the provisions (“procedural unconscionability”). . . .

Id. (citation omitted).

      The trial court correctly pointed out that in her pleadings, Appellant did

not identify any contract term as allegedly unconscionable. Trial Ct. Op. at 7.

Instead, she argued the contract was unconscionable solely because “there is

a dispute over whether [she] fully understood the term she was signing[.]”

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Appellant’s Brief in Opposition to SJ at 5.4 To this end, Appellant failed to

establish both prongs of an unconscionable-contract claim. See Cardinal,

155 A.3d at 53.

       On appeal, Appellant asserts, for the first time, that the contract terms

are “unreasonably favorable to the drafter[.]” See Appellant’s Brief at 12.

Because this argument was not raised before the trial court, it is waived. See

Pa.R.A.P. 302(a). Furthermore, the merits of such a claim are specious —

that the contract is unreasonably favorable to Bank because the contract

“would allow [Bank] to go after [Appellant] without going after [B]orrower

first and to go after a significantly large sum of money.” See Appellant’s Brief

at 12. Appellant does not explain why it would be unfair for Bank to not pursue

repayment from Borrower first, and she overlooks the fact that the amount to

be repaid by the guarantor is simply the amount of Borrower’s debt.         We

conclude no relief is due.

                          VII. Impossibility of Contract

       In her fourth issue, Appellant avers the trial court erred in not finding

the contract was impossible to perform. She first claims the contract required

____________________________________________

4  Appellant’s answer to the summary judgment motion did not raise any
particular defense, and instead merely stated “there are a number of defenses
to the formation of the contract . . . which would defeat enforceability of any
contract.” Appellant’s Answer to Bank’s Motion for Summary Judgment, at 1-
2.

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Bank to seek repayment from Borrower before seeking payment from her.

Appellant’s Brief at 13. She then reasons:

        [Borrower] has filed for Bankruptcy which means that as of now[,
        Bank] cannot go after [B]orrower for the loan. Since [Bank]
        cannot exhaust its remedies by going after [Borrower,] it makes
        the contract impossible to perform because the Guaranty against
        [Appellant] can never come into play.

Id. No relief is due.

        This Court has stated:

        Legal impossibility is defined in § 261 of the Restatement (Second)
        of Contracts 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.

Felix v. Giuseppe Kitchens & Baths, Inc., 848 A.2d 943, 947-48 (Pa.

Super. 2004), quoting Restatement (Second) of Contracts § 261 (1981).

        In her pleadings before the trial court, Appellant merely cited case

authority concerning the contract doctrine of impossibility, without presenting

any legal argument.      See Appellant’s Brief in Opposition to SJ at 3-4.     In

another pleading, she stated Borrower was in bankruptcy petition, similarly

without presenting any explanatory discussion. See Appellant’s Answer to SJ

at 2.    Appellant’s present line of reasoning is thus arguably waived.       See

Pa.R.A.P. 302(a).

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      Nevertheless, to the extent Appellant has preserved her argument, we

conclude no relief is due. First, in insisting the guaranty contract required

Bank to pursue repayment from Borrower first, Appellant wholly ignores the

plain language of the contract:

      NATURE OF GUARANTY. The Guaranty is a guaranty of payment
      and not of collection. Therefore, [Bank] can insist that the
      Guarantor pay immediately, and [Bank] is not required to
      attempt to collect first from the Borrower, any collateral, or
      any other person liable for the indebtedness.

See Commercial Guaranty at 1 (emphasis added). The trial court found, and

we agree, that this language is clear and unambiguous. See Trial Ct. Op. at

5. The court further pointed out that additional discovery will not change this

conclusion. Id. at 8.

                           VIII. Parol Evidence

      In her final issue, Appellant avers the trial court erred in not allowing

parol evidence to show she believed “she was signing the Guaranty on behalf

of [B]orrower and not a personal Guaranty.” Appellant’s Brief at 14. She

insists the “meaning of the contract term is in question,” and this question

“must go before a trier of fact to make that determination.” Id. We disagree.

      This Court has explained:

      Pennsylvania law defines the parol evidence rule as:

          Where the parties, without any fraud or mistake, have
          deliberately put their engagements in writing, the law
          declares the writing to be not only the best, but the only,
          evidence of their agreement.             All preliminary
          negotiations, conversations and verbal agreements are
          merged in and superseded by the subsequent written

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            contract . . . and unless fraud, accident or mistake be
            averred, the writing constitutes the agreement between
            the parties, and its terms and agreements cannot be
            added to nor subtracted from by parol evidence.

        The parol evidence rule seeks to preserve the integrity of a written
        agreement by barring the contracting parties from trying to alter
        the meaning of their agreement through use of contemporaneous
        oral declarations.

DeArmitt v. N.Y. Life Ins. Co., 73 A.3d 578, 589 (Pa. Super. 2013) (citations

omitted). As stated above, parol evidence is permissible if a contract term is

ambiguous, and a contract term is not ambiguous “merely because the parties

do not agree on its construction.” Pass, 229 A.3d at 5.

        First, we note Appellant has not identified what parol evidence she

wished to introduce. Additionally, because the trial court found the guaranty

contract terms are clear and unambiguous, it properly precluded any parol

evidence as to any contrary interpretation Appellant had. See Pass, 229 A.3d

at 5.

        Finally, the trial court considered the integration clause of the guaranty

contract:

        Integration. [Appellant] further agrees that [Appellant] has read
        and fully understands the terms of this Guaranty[. T]he Guaranty
        fully reflects [Appellant’s] intentions and parol evidence is not
        required to interpret the terms of this Guaranty. . . .

Trial Ct. Op. at 9, quoting Commercial Guaranty at 2. “An integration clause

stating the parties intend the writing to represent their entire agreement is a

‘clear sign’ the writing ‘expresses all of the parties’ negotiations, conversations

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and agreements made prior to its execution.’” DeArmitt, 73 A.3d at 589-90

(citation omitted).

      The trial court properly pointed out Appellant raised no claim there is a

genuine issue of material facts as to whether this clause “clearly set[ ] out the

intent of the parties[.]” Trial Ct. Op. at 9. Appellant does not address nor

dispute this discussion concerning the integration clause.      Accordingly, no

relief is due.

                               IX. Conclusion

      In sum, we determine all of Appellant’s multiple challenges to the

guaranty contract are meritless. Accordingly, we affirm the trial court’s order

granting summary judgment in favor of Bank, in the amount of $204,685.86.

      Order affirmed.

Judgment Entered.

Joseph D. Seletyn, Esq.
Prothonotary

Date: 2/22/2023

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