Court Opinion

ID: 4258217
Source: CourtListenerOpinion
Date Created: 2018-03-26 18:50:49.302561+00
Date Added: 2024-06-11T14:28:22.188049
License: Public Domain

J-A18036-17

NON-PRECEDENTIAL DECISION - SEE SUPERIOR COURT I.O.P. 65.37

 PPG ARCHITECTURAL FINISHES              :   IN THE SUPERIOR COURT OF
 INC.                                    :        PENNSYLVANIA
                                         :
                    Appellant            :
                                         :
                                         :
              v.                         :
                                         :
                                         :   No. 1960 WDA 2016
 N. SIPERSTEIN WEST-END PAINT            :
 COMPANY INC., SIPERSTEIN WEST           :
 END PAINT CORPORATION AND               :
 SIPERSTEIN'S BRICKTOWN PAINT            :
 CORPORATION

                    Appellees

                  Appeal from the Order December 4, 2016
     In the Court of Common Pleas of Allegheny County Civil Division at
                           No(s): GD-11-001095

BEFORE: BOWES, J., LAZARUS, J., and OTT, J.

DISSENTING MEMORANDUM BY BOWES, J.:                 FILED MARCH 26, 2018

      Although I agree with portions of the learned majority’s analysis, I

believe that the issues raised by Appellant, PPG Architectural Finishes Inc.

(“PPG”), are barred by collateral estoppel. As such, I would affirm the trial

court’s order sustaining the preliminary objections of Appellees, N. Siperstein

West-End Paint Company Inc., Siperstein West End Paint Corporation, and

Siperstein’s Bricktown Paint Corporation. Hence, I dissent.

      As the resolution of this matter requires an understanding of previous

litigation relevant to these proceedings, see PPG Architectural Finishes
J-A18036-17

Inc. v. Siperstein, 60 A.3d 561 (Pa.Super. 2012), appeal denied, 7 A.3d 812

(Pa. 2013), I begin by recounting this Court’s recitation of the factual

background of that case. That proceeding involved a complaint filed by PPG

against fifteen separate legal entities, not including the above-named

Appellees, doing business under the trademark “Siperstein’s,” (referred to in

that matter as the “Siperstein Companies”) and Lawrence Katz (“Katz”), an

officer and owner of a number of the Siperstein Companies. We previously

set forth the following:

             PPG and the Siperstein Companies had a business
      relationship that dated back to the early 1980s, by which the
      Siperstein Companies submitted purchase orders to PPG in
      Pennsylvania for varying quantities of paint on open account. PPG
      shipped the orders from Harrisburg, Pennsylvania to the various
      Siperstein Companies’ locations in New Jersey, Massachusetts,
      and Connecticut. The business typically amounted to sales of $2
      million to $3 million each year.

             The invoices for the shipments indicated the specific
      Siperstein Company to which the products were being shipped and
      billed, and PPG kept an accounting of the amounts owed by each
      Siperstein Company. However, PPG internally had only one
      account number that included all of the Siperstein Companies,
      excepting the Bergenfield store, which requested its own account.
      The Siperstein Companies then submitted payment to PPG in
      Pennsylvania, either with a check from the relevant company’s
      individual account or with a check from a consolidated account
      that indicated for which store payment was being made.

             In the mid-to-late 2000s, PPG began having difficulty
      obtaining timely payment from Siperstein Companies.           Katz
      executed several promissory notes in his individual capacity, each
      relating to an amount owed by a specific Siperstein store, to
      secure continued shipments of products from PPG. Katz also
      repeatedly informed individuals at PPG that he would see to it that
      PPG was paid amounts not secured by one of the promissory
      notes. PPG eventually required immediate payment for new

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J-A18036-17

      orders, plus an additional 50% to be applied to past-due orders,
      before it would ship any additional product to any of the Siperstein
      Companies. Eventually, because the Siperstein Companies failed
      to pay down the debt, PPG ceased filling orders.

            PPG filed a complaint in the Allegheny County Court of
      Common Pleas on June 5, 2009 [(the “2009 action”)]. The
      complaint states counts of breach of contract, quantum meruit,
      and account stated against the Siperstein Companies for past-due
      invoices totaling over $800,000, as well as counts of breach of
      contract, promissory estoppel, and negligent misrepresentation
      against Katz individually for his oral promises to see that PPG was
      paid.

PPG, supra, 60 A.3d 561 (unpublished memorandum at *2-4). Following a

non-jury trial, the trial court entered a verdict in favor of PPG, and against

Siperstein Bergenfield Paint & Wallpaper Co., Inc. in the amount of

$43,901.25, and against the remaining Siperstein Companies, jointly and

severally, in the amount of $794,747.60. Both parties appealed.

      As is pertinent here, on appeal PPG contended that the trial court “erred

in excluding from the amount awarded to PPG in its verdict the amounts due

for product delivered by PPG to Siperstein’s Long Branch location and

Bricktown location when the undisputed evidence of record established that

the Long Branch and Bricktown locations were part of the “Siperstein Chain,”

. . . and where the trial court held that the other members of the “Siperstein

Chain” were jointly and severally liable for the entire debt owed to PPG by the

chain.” Id. at *8.

      On appeal, we determined, inter alia, that PPG had failed to satisfy the

procedural requirements necessary to allege that the Siperstein Companies

were jointly and severally liable as an unincorporated association. Id. at *18.

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Nevertheless, we affirmed the trial court’s conclusion that the entities sued

therein, which did not include Appellees, were estopped from denying joint

and several liability based on well-established principles of agency. Id. at

*19-23. In this vein, we found that the record supported the trial court’s

conclusion that PPG reasonably believed that the Siperstein Companies “were

a single entity, or a de facto partnership of companies.”       Id. at *22.   In

addition, the record supported its finding that “PPG reasonably relied on its

belief to its detriment in continuing to extend credit to the Siperstein

Companies with the expectation that the companies would cover each other’s

debts,” and thus, that the Siperstein Companies were jointly and severally

liable “for the entire debt on PPG’s group account.” Id. at *22-23.

      Following this determination, we considered whether the trial court had

erred in excluding from the verdict the debts of the Long Branch and Bricktown

locations, since they were not named defendants in that case. We held that,

because “each and all of the Siperstein Companies whose orders were billed

to the main PPG account are jointly and severally liable for the entire debt of

that account, the entire debt of that account should be included in the verdict.”

Id. at *23. In addition, we noted, “[w]hether all of the legal entities that had

outstanding debts on the account were parties to the action is immaterial.”

Id. at *23-24. As the record did not include a stipulation as to the debts owed

by those stores, we remanded for the trial court to determine whether there

was sufficient proof of the debts of the Long Branch and Bricktown stores for

inclusion in the verdict against the Siperstein Companies.

                                      -4-
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      Subsequently, the Pennsylvania Supreme Court denied a petition for

review. PPG Architectural Finishes, Inc. v. Siperstein, 7 A.3d 812 (Pa.

2013). Thereafter, on remand, the trial court, by order dated March 19, 2014,

modified the original verdict to include the amounts stipulated as owed by the

Long Branch and Bricktown stores, and which were otherwise included in the

invoice of the main PPG account. Despite our finding that each of the legal

entities with debts owed on PPG’s main account were jointly and severally

liable, PPG could only enter judgment against the defendants named in the

2009 action.

      While the 2009 action was pending, PPG filed the instant complaint in

2011, seeking damages for breach of contract and quantum meruit against

Appellees, who represent Siperstein’s Long Branch and Bricktown locations.

PPG raised many of the same allegations it raised in the 2009 action, including

that Appellees were jointly and separately liable for the indebtedness of the

entire Siperstein enterprise. Appellees filed preliminary objections contending

that the matter was barred by collateral estoppel and res judicata. Before the

trial court ruled on Appellees’ preliminary objections, the matter was stayed

pending the resolution of the 2009 action. On December 4, 2016, the trial

court sustained Appellees’ preliminary objections on the basis of res judicata

and collateral estoppel. PPG filed a timely notice of appeal and complied with

the trial court’s order to file a Rule 1925(b) concise statement of errors

complained of on appeal. The trial court authored its Rule 1925(a) opinion,

and this matter is now ready for our review.

                                     -5-
J-A18036-17

      PPG raises five questions for our consideration:

      1. Whether the trial court erred in finding that res judicata and
         collateral estoppel applied because the named defendants in
         this action were not named parties and no verdict was entered
         against them in the [2009 action].

      2. Whether the trial court erred in concluding that it previously
         considered the adequacy of the evidence as to whether the
         stores operated by the defendants in this action formed part of
         the “Siperstein chain” and concluded that these stores were not
         part of such chain.

      3. Whether the trial court erred in finding that res judicata and
         collateral estoppel were applicable because, in doing so, the
         [trial court] failed to distinguish store locations operated by
         defendants with corporate entities that have been sued or may
         be sued.

      4. Whether the trial court erred in sustaining preliminary
         objections because res judicata and collateral estoppel are
         affirmative defenses that are not properly raised by way of
         preliminary objections.

      5. Whether the requirements of res judicata and collateral
         estoppel have been met.

Appellant’s brief at 2-3.

      As a preliminary matter, I agree with the majority’s determination that

PPG waived its fourth issue, which challenged the procedural propriety of

sustaining Appellees’ preliminary objections based on res judicata and

collateral estoppel. I believe that the majority correctly reasoned that PPG

waived this argument by failing to preserve this issue by filing preliminary

objections to Appellees’ preliminary objections.

      Turning to the merits of this matter, I disagree with the majority’s

conclusion that the trial court erred in sustaining Siperstein’s preliminary

                                     -6-
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objections based on collateral estoppel. The following guidelines are relevant

to our analysis:

      Our standard of review of an order of the trial court overruling or
      granting preliminary objections is to determine whether the trial
      court committed an error of law.          When considering the
      appropriateness of a ruling on preliminary objections, the
      appellate court must apply the same standard as the trial court.

Perelman v. Perelman, 125 A.3d 1259, 1263 (Pa.Super. 2015) (citation

omitted).

      PPG contends, in part, that the trial court erred in sustaining Appellees’

preliminary objections based on the doctrine of collateral estoppel. This Court

has previously observed, “[c]ollateral estoppel, or issue preclusion, is a

doctrine which prevents re-litigation of an issue in a later action, despite the

fact that it is based on a cause of action different from the one previously

litigated.”   Weissberger v. Myers, 90 A.3d 730, 733 (Pa.Super. 2014)

(citation omitted). Collateral estoppel applies to bar re-litigation of an issue

where

      (1) the issue decided in the prior case is identical to one presented
      in the later case; (2) there was a final judgment on the merits;
      (3) the party against whom the plea is asserted was a party or in
      privity with a party in the prior case; (4) the party or person in
      privity against whom the doctrine is asserted had a full and fair
      opportunity to litigate the issue in the prior proceeding and (5)
      the determination in the prior proceeding was essential to the
      judgment.

Id. (citation omitted).

      PPG initiated the present action based on its claim that “recovery could

not be effected against the 2009 defendants.” Appellant’s brief at 8. PPG

                                      -7-
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contends that the issue herein is whether Appellees, as opposed to the

Siperstein Companies named in the 2009 action, are jointly and severally

liable for the debt owed by the Long Branch and Bricktown stores. Appellant’s

brief at 10. It maintains that, since Appellees were not parties to the 2009

action, whether they were jointly and severally liable was not an issue in that

matter.    PPG alleges that the corporate entities named in this action are

distinguishable from the store locations found to be jointly and severally liable

in the 2009 action.1 PPG argues that, since Pa.R.C.P. 2177 requires an action

against a corporate entity to be prosecuted in its corporate name, and

Appellees were not named in the 2009 action, they were not subject to the

verdict.   Finally, PPG contends, without development, that since Appellees

were not parties to the 2009 action, “the other requirements for . . . collateral

estoppel are not met.” Appellant’s brief at 15.

       The majority begins its analysis by reiterating this Court’s previous

holding in the 2009 action that the Siperstein Companies were jointly and

severally liable “because they ‘caused PPG to have the reasonable belief that

they were a single entity, or a de facto partnership of companies.’” Majority

Memorandum, at 14 (citing PPG, supra, 60 A.3d 561 (unpublished

memorandum at *22)). It also notes that PPG raised the same allegation in

the 2011 action.       Nonetheless, the majority, apparently accepting PPG’s

____________________________________________

1 Nevertheless, PPG concedes that, on remand, the trial court modified its
original verdict to include the stipulated amounts owed by the Long Branch
and Bricktown stores. Appellant’s brief at 11.

                                           -8-
J-A18036-17

argument that it is dispositive that the corporate defendants in this matter are

different from the Long Beach and Bricktown Siperstein locations whose debts

were included in the 2009 verdict, determined that “[t]herefore . . . PPG may

pursue its claim of joint and several liability against the 2011 Defendants

based upon a de facto partnership theory.” Majority Memorandum, at 15.

      Finally, the majority contests the trial court’s determination that PPG

should have sought to amend the 2009 complaint to include the Long Branch

and Bricktown locations, or to consolidate it with the instant matter.            It

observes that Pa.R.C.P. 213 places it within the trial court’s discretion to

determine whether two matters should be consolidated. Although it may be

true that the trial court had discretion to consolidate the actions, it was not

obligated to do so. In any case, this reasoning does not otherwise implicate

collateral estoppel. Since I find that the elements of collateral estoppel are

clearly met in this case, I respectfully disagree with the majority’s analysis.

      Regarding the first prong of the collateral estoppel analysis, I submit

that the issues in the two cases are identical. The issue decided in the 2009

action was whether the “Siperstein Companies,” who owed debts on PPG’s

main account, were jointly and severally liable for the debts owed by the entire

enterprise. The issue before us is identical. As noted above, the trial court

decided this issue, finding that the Siperstein Companies were jointly and

                                      -9-
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severally liable, and, on appeal, we affirmed.2 Notably, in so affirming, we

observed that “[w]hether all of the legal entities that had outstanding debts

on the account were parties to the action [was] immaterial.” PPG, supra, at

*23-24 (emphasis added).            Furthermore, I am not convinced that it is

dispositive that the corporate entities that represent the Long Beach and

Bricktown stores in this proceeding are legally distinct. We previously found

that the Siperstein Companies were jointly and severally liable for “all of the

legal entities that had outstanding debts” owed to PPG, id., and, unlike res

judicata, collateral estoppel does not require identity of the parties to be

applicable. Although PPG could have used collateral estoppel as a sword in

this action, the doctrine does not preclude Appellees herein, who were third

parties to the 2009 action, from employing it as a shield.

       Second, this issue was litigated to a final judgment on the merits in the

prior action. Following trial, it proceeded to direct appeal, and after this Court

affirmed the trial court’s order, our High Court denied the petition for

allowance of appeal. Third, it is undisputed that PPG, the party against whom

collateral estoppel is being asserted, was a party to the 2009 action. Fourth,

given the extended litigation, numerous pre-trial motions, and hearings, which

culminated in a non-jury trial followed by lengthy appellate proceedings, PPG
____________________________________________

2 As noted, infra, we found that “each and all of the Siperstein Companies
whose orders were billed to the main PPG account are jointly and
severally liable for the entire debt of that account[.]” PPG Architectural
Finishes Inc. v. Siperstein, 60 A.3d 562 (Pa.Super. 2012) (unpublished
memorandum at *23) (emphasis added). It is undisputed that the Long
Branch and Bricktown locations owed debts on the main PPG account.

                                          - 10 -
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was certainly afforded a full and fair opportunity to litigate the issue. Indeed,

PPG’s allegations that individual Siperstein Companies were jointly and

severally liable for the debts owed by other Siperstein Companies was

ultimately adjudicated in its favor.      Finally, the finding that individual

Siperstein Companies were jointly and severally liable to PPG was essential to

the prior judgment, as that was the primary focus of the prior litigation, and

resolved the question of liability among the myriad defendants.

      I am unpersuaded by PPG’s assertion that, since the corporate entities

named as defendants herein were not named parties in the 2009 action, the

elements of collateral estoppel are somehow inapplicable or unmet. Indeed,

the doctrine of collateral estoppel speaks directly to this situation.    As we

observed above, collateral estoppel is intended to “prevent re-litigation of an

issue in a later action, despite the fact that it is based on a cause of action

different from the one previously litigated.” Weissberger, supra. A prior

court of concurrent jurisdiction determined, as a factual and legal matter, that

the whole of the Siperstein enterprise is jointly and severally liable for the

debts of its separate legal entities, including the corporations named in this

suit that represent the Long Branch and Bricktown stores.           Indeed, the

stipulated amounts of those stores’ debts were added to the modified verdict

at the conclusion of the 2009 action.

      Further, we must be mindful of the distinction between issue preclusion

and claim preclusion. Whereas res judicata bars re-litigation of a particular

claim, collateral estoppel applies more broadly. Collateral estoppel bars all

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claims where the factual or legal predicate supporting those claims, i.e. the

underlying issue, has previously been determined.          Hence, when issue

preclusion applies, it may bar multiple claims if they all rely upon identical

legal or factual underpinnings.

       In this case, collateral estoppel operates to bar PPG from relitigating

whether third parties are liable for the debts previously adjudicated because

that issue was decided in its favor in the 2009 action. It is irrelevant what

cause of action it asserts in this proceeding to reach the conclusion that

Appellees are jointly and severally liable for the debts of the Siperstein

enterprise, or even merely the Long Branch and Bricktown stores, as the

factual and legal basis of that issue has been decided.

       Nor does PPG’s inability to satisfy its judgment against the 2009

defendants alter this conclusion. In the 2009 action, the court determined

that PPG was entitled to recover the amounts owed by the Siperstein

Companies, including the balances owed by the Long Branch and Bricktown

locations participating in this matter. Whether PPG can collect on those debts

is not relevant to the outcome of this proceeding.3 Appellees, as legal entities

within the Siperstein enterprise who owed debts on PPG’s main account, have

been found to be jointly and severally liable for that award. PPG, supra at

____________________________________________

3In this sense, I agree with the trial court’s insistence that PPG should have
ensured that Appellees were a party to the 2009 action. If PPG truly cannot
collect on the 2009 verdict, it has only itself to blame since it could have
ensured that all of the Siperstein Companies indebted on its main account
were parties to that proceeding.

                                          - 12 -
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*23-24. As such, there are no other relevant factual and legal matters left to

be decided in this case. Thus, I would find that the trial court did not err in

sustaining Siperstein’s preliminary objections on the basis of collateral

estoppel, and I would affirm its order.      For these reasons, I respectfully

register this dissent.

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