Court Opinion

ID: 2790043
Source: CourtListenerOpinion
Date Created: 2015-03-30 20:10:19.239889+00
Date Added: 2024-06-11T12:26:03.543323
License: Public Domain

J-A01023-15

NON-PRECEDENTIAL DECISION – SEE SUPERIOR COURT I.O.P 65.37

UNITED STATES STEEL CORPORATION, : IN THE SUPERIOR COURT OF
                                 :      PENNSYLVANIA
               Appellee          :
                                 :
          v.                     :
                                 :
WITHERUP FABRICATION & ERECTION, :
INC.,                            :
                                 :
               Appellant         : No. 674 WDA 2014

                   Appeal from the Order April 15, 2014,
                 Court of Common Pleas, Allegheny County,
                      Civil Division at No. GD 10-1445

BEFORE: FORD ELLIOTT, P.J.E., DONOHUE and ALLEN, JJ.

MEMORANDUM BY DONOHUE, J.:                          FILED MARCH 30, 2015

      Witherup Fabrication & Erection, Inc. (“Witherup”) appeals from the

order entered on April 15, 2014, in the Court of Common Pleas, Allegheny

County, directing Witherup to pay $148,225.44 to United States Steel

Corporation (“U.S. Steel”) in interest and $95,000.00 to the Allegheny

County Clerk of the Civil Division, Department of Court Records.    For the

reasons that follow, we affirm in part and reverse in part.

      A brief summary of the relevant facts and procedural history is as

follows.   On September 3, 2009, an explosion occurred at U.S. Steel’s

Clairton facility. The explosion resulted in damage to U.S. Steel’s property

and the death of Nicholas Revetta, an employee of Power Piping.      At the

time of the explosion, Power Piping was a general contractor for U.S. Steel,

working on the Clairton facility.   Witherup was a subcontractor to Power
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Piping.   U.S. Steel determined that the explosion occurred as a result of

Witherup’s welding.

      On January 22, 2010, Nicholas Revetta’s estate filed a complaint

against U.S. Steel.   U.S. Steel thereafter filed third-party claims against

Witherup and Power Piping.      On March 23, 2013, U.S. Steel and Power

Piping executed a settlement agreement.        U.S. Steel and Power Piping

agreed that Power Piping could recover a part of any monies U.S. Steel

collected from Witherup.

      On September 17, 2013, U.S. Steel and Witherup reached a

settlement agreement, (the “Settlement Agreement”), which involved the

payment of $9,500,000 by Witherup to U.S. Steel.       On October 16, 2013,

prior to a release being signed, U.S. Steel filed a Petition to Deposit Monies

Into Court (the “Petition”), requesting Witherup deposit the settlement funds

into court as it had been thirty days since the parties agreed to a settlement.

Witherup filed its response on October 17, 2013, stating that it was not

necessary to pay the settlement funds into court as it fully intended to

comply with the terms of the settlement agreement.           Witherup further

anticipated that it would provide U.S. Steel with a draft agreement by

October 21, 2013. On October 21, 2013, Witherup sent a draft of a Release

and Settlement Agreement to U.S. Steel and Power Piping.

      The trial court entered an order on October 30, 2013, requiring

Witherup to deposit the settlement funds with the court and threatened to

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penalize Witherup in the form of interest in accordance with Rule 229.1(g) of

the Pennsylvania Rules of Civil Procedure.     The trial court calculated the

interest to be in the amount of $1,106.16 per day if the parties did not

execute the release by November 14, 2013, set to begin on November 15,

2013 and lasting until a joint motion to release the escrowed funds was filed.

The October 30, 2013 order also provided that the order would be “null and

void” if all parties executed a settlement agreement and release prior to

noon on November 14, 2013.

      On November 13, 2013, in response to Witherup’s request for

assistance in reaching a resolution, the trial court held a settlement

conference on the Petition. At the conference, Witherup claimed that both

Power Piping and U.S. Steel’s release was a material element of the

Settlement Agreement, and asked the trial court to stay its October 30,

2013 order. Power Piping informed the court that its insurer, CNA, was still

evaluating whether it would release any claims it may have against

Witherup.   Because no representative from CNA appeared at the hearing,

however, the trial court scheduled another settlement conference for

November 20, 2013.      In the meantime, the trial court denied Witherup’s

request to stay its October 30, 2013 order, but provided that it would not

impose any sanctions if Witherup deposited the money with the court by

November 20, 2013. Witherup deposited the money into court on November

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18, 2013, ostensibly satisfying the trial court’s conditions for setting aside

the imposition of sanctions.

      At the settlement conference held on November 20, 2013, a

representative of CNA stated that it was not prepared to waive its potential

indemnity claim against Witherup. U.S. Steel thereafter filed a petition to

enforce the Settlement Agreement on December 2, 2013. On February 4,

2014, Witherup filed a response to U.S.’s Steel’s petition to enforce the

settlement agreement as well as a cross-motion to enforce the Settlement

Agreement.     In its cross-motion to enforce the Settlement Agreement,

Witherup requested that the trial court vacate the portion of the October 30,

2013 order requiring payment of interest and costs since Witherup complied

with the trial court’s order to deposit the monies into court. The trial court

set a hearing for April 8, 2014.

      In the interim, on March 27, 2014, Witherup obtained an executed

release (the “Release”) from Power Piping and U.S. Steel. As a result, the

trial court issued an order to disburse the money on March 28, 2014. In its

order, the trial court provided that U.S. Steel and Witherup “reserve[d] their

respective rights relative to entitlement to interest pursuant to the October

30, 2013 Order of Court and request[ed] that Hearing/Argument on that

issue be addressed before the [c]ourt on April 8, 2014[.]” Order, 3/28/14.

      On April 8, 2014, the trial court conducted a hearing on the matter of

interest. At the hearing, Witherup requested that the trial court vacate its

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October 30, 2013 order imposing sanctions in the form of interest against

Witherup because the requisite elements of Rule 229.1, the statutory basis

on which the trial court entered the order, were never established. The trial

court denied Witherup’s request and entered an order on April 15, 2014,

directing Witherup to pay $148,225.441 in interest to U.S. Steel, as well as

$95,000 to the Clerk of Court Records. In response, Witherup filed a motion

for reconsideration and a notice of appeal to this Court on April 25, 2014.

The trial court denied Witherup’s motion for reconsideration on May 13,

2014.

        On appeal, Witherup raises the following issues for our review, which

we have reordered for ease of disposition:

             1. Whether the trial court erred in ordering Witherup
             to pay a commission in the amount of $95,000.00
             for court costs associated with the handling of funds
             deposited into court where Witherup had discharged
             its obligations under the settlement by depositing the
             funds, and where it was U.S. Steel that filed the
             Petition to Deposit Monies Into Court, and it was U.S.
             Steel that availed itself of any services rendered by
             the Department of Court Records in acting as a
             custodian for the settlement funds[?]

             2. Whether the Order directing Witherup to pay a
             commission approaching six (6) figures to the
             Department of Court Records amounts to an
             unconstitutional taking of property without due
             process where the Order and the statute relied upon
             to justify the commission impose the fee in an

1
   The trial court calculated interest from November 15, 2013 until March 28,
2014, the date of the parties’ joint motion to disburse the funds, for a total
of 134 days. See N.T., 4/8/14, at 16-17.

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            arbitrary fashion and without regard to the
            reasonableness of the amount and without defined
            standards as to who is responsible for the fee or the
            circumstances under which it can be charged[?]

            3. Whether the trial court’s April 15, 2014 Order
            imposing a penalty against Witherup in the form of
            interest in the amount of $148,225.44 was
            erroneous given that none of the predicates to an
            award of interest under Rule 229.1 had been
            established[?]

            4. Whether the trial court erred in relying on Rule
            229.1 in directing Witherup to pay interest on a
            settlement without ever making a finding of fact that
            Witherup had breached the settlement terms and
            where Witherup did not receive a signed release until
            March 27, 2014 – Over four (4) months after the
            interest award[] was made[?]

Witherup’s Brief at 4-5.

      Before we address Witherup’s claims, we must address the trial court’s

conclusion in its Rule 1925(a) opinion, that all matters raised by Witherup

are time barred and accordingly are waived. Trial Court Opinion, 7/15/14,

at 9; Pa.R.A.P. 1925(a). The trial court states that “Witherup had thirty (30)

days after entry of the [October 30, 2013] [o]rder to seek appellate relief[,]”

because it was a final order and disposed of all claims. Id. at 10. The trial

court further states that “[t]he April 15, 2014 [o]rder merely dealt with the

computation of interest and [c]ourt costs; however, the right to said interest

and [c]ourt costs was established by the October 30, 2013 [order], which

was not appealed in a timely manner.” Id. We must determine, therefore,

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whether the trial court’s October 30, 2013 order was a final order,

necessitating Witherup to file an appeal within thirty days.

      Rule 341 of the Pennsylvania Rules of Appellate Procedure defines a

final order as one that “disposes of all claims and of all parties.” 2 Pa.R.A.P.

341(b)(1). In this case, the trial court issued the following order:

            AND NOW, to wit, this 30th day of October, 2013, it
            is hereby ORDERED, ADJUDGED AND DECREED that
            Plaintiff’s Motion to Deposit Monies into Court is
            granted. On or before noon on November 14, 2013,
            Defendant shall deposit the sum of Nine Million, Five
            Hundred Thousand Dollars ($9,500,000.00) with the
            Clerk of the Civil Division, Department of Court
            Records, to be held in escrow pending further Order
            of Court.

            Defendant is further ORDERED to pay as interest
            calculated in accordance with Pa.R.C.P. 229.1(g) the
            sum of $1,106.16 per day to Plaintiff beginning from
            November 15, 2013, and all court costs incurred as a
            result of this Order and until such date that the
            parties submit a Joint Motion to Release Escrowed
            Funds with the Court.

            This Order shall be null and void if a settlement
            agreement and release is executed by all parties
            prior to noon on November 14, 2013.

            Pursuant to Joint Motion of the Parties, the within
            Order is to be filed under Seal.

2
   Rule 341(b) also provides that a final order is any order that: (2) is
expressly defined as a final order by statute; or (3) is entered as a final
order pursuant to subdivision (c) of this rule. As the order in question is not
defined as a final order by statute and was not entered as a final order
“upon an express determination that an immediate appeal would facilitate
resolution of the entire case[,]” pursuant to subsection (c), we focus our
analysis on Rule 341(b)(1).

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Order, 10/30/13, at 1-2.

      We conclude that the trial court’s October 30, 2013 order was not a

final order under Rule 341(b)(1), as the order does not dispose of all claims

and of all parties. As this Court established, “[a] final order is one that is

intended to be final as to all parties and to the whole subject matter.”

Pittsburgh Const. Co. v. Griffith, 834 A.2d 572, 579 (Pa. Super. 2003)

(emphasis added).    In this case, at the time the trial court entered the

October 30, 2013 order, the underlying matter remained yet to be resolved.

Although the parties reached an agreement as to the amount Witherup

would pay to U.S. Steel, the parties remained engaged in continuous

discussions and settlement conferences to execute a written settlement

agreement and release.     The October 30, 2013 order itself reflects the

ongoing nature of the case, stating that the settlement funds were “to be

held in escrow pending further Order of Court.” Order, 10/30/13, at 1

(emphasis added).

      Furthermore, the record reflects that the issue of interest remained an

ongoing issue.   The order specifically provides a contingency, stating that

the order “shall be null and void if a settlement agreement and release is

executed by all parties prior to noon on November 14, 2013.” Id. at 2. At

the November 13, 2013 settlement conference, the parties had not yet

executed a full release. The trial court, upon request by Witherup, “refused

to stay its Order of October 30th requiring the deposit of monies, but

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indicated ‘there would be no sanction if the money was deposited by

the November 20th hearing date.’”         Trial Court Opinion, 7/15/14, at 3

(emphasis added). Witherup abided by the trial court’s terms and deposited

the settlement funds into court on November 18, 2013. Id. at 6.

      A separate occasion to address the October 30, 2013 order arose when

U.S. Steel filed its petition to enforce the Settlement Agreement on

December 2, 2013. In response, Witherup filed a cross-motion to enforce

the terms of the Settlement Agreement. Witherup maintained in its cross-

motion that it remained willing to settle the matter based on the terms

agreed to, but that the condition precedent to distributing settlement funds

to U.S. Steel, namely, the executed release by both U.S. Steel and Power

Piping, was unsatisfied.   Witherup’s Response to U.S. Steel’s Motion to

Enforce Settlement Agreement and Cross-Motion to Enforce, 2/4/14, ¶ 22.

Witherup concluded by stating:

            Further, Witherup stands ready to comply with all of
            the terms negotiated on September 17, 2013, and
            has complied with this [c]ourt’s Order of October 30,
            2013 requiring that the settlement funds be paid into
            Court.     As such, Witherup requests that the
            provisions of this [c]ourt’s Order requiring payment
            of interest and costs be vacated.

Id. at ¶ 23. 3

3
   U.S. Steel and the trial court deem Witherup’s cross-motion to enforce the
Settlement Agreement to be an untimely motion for reconsideration of the
trial court’s October 30, 2013 order. See Order, 4/15/14; U.S. Steel’s Brief,
at 18. Witherup, however, did not ask the court to reconsider its order;

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        After reviewing the record, we conclude that the trial court’s October

30, 2013 order was not a final order under Rule 341(b) as it did not

“dispose[] of all claims and of all parties.” Pa.R.A.P. 341(b)(1). The terms

of the order itself made clear that it was not final in that compliance with

conditions stated in the order rendered it null and void.        Moreover, the

continuous proceedings in the trial court made clear that the ultimate

outcome of the petition filed by U.S. Steel was not final until the entry of the

April 15, 2014 order from which this appeal was taken.            We therefore

disagree with the trial court’s conclusion that the October 30, 2013 order

was final and Witherup’s failure to file an appeal within thirty days of the

entry of order rendered the appeal untimely. As a result, we now address

the merits of Witherup’s claims.

        As its first issue on appeal, Witherup contends that the trial court

erred by requiring Witherup to pay a commission in the amount of $95,000

to the Department of Court Records for depositing the settlement funds into

court pursuant 42 P.S. § 21042(11).4          Witherup’s Brief at 42.   Witherup

rather, Witherup requested that the court vacate the portion of the October
30, 2013 order requiring payment of interest and costs because of its
compliance with the October 30, 2013 order requiring that the settlement
funds be deposited into court. Thus, the claim that Witherup filed an
untimely motion for reconsideration is meritless.

4
    42 P.S. § 21042 provides, in relevant part:

             § 21042. Fee Schedule

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asserts that “[t]here is no support under the law for an order requiring a

defendant that has discharged its payment obligations to pay for any fees

related to the handling of such funds deposited into court.”       Id. at 43.

Witherup further asserts that “to the extent that any commission was owed

for the deposit[ed] money into court, the burden of any fees for such

services should have been borne by U.S. Steel.” Id.

      Other than what is quoted herein, however, Witherup has not

developed any specific arguments or cited to any relevant authority in

support of these claims for relief. As Witherup has not provided us with any

basis upon which to grant relief, we decline to do so.

      For its second issue on appeal, Witherup argues that the trial court’s

order directing Witherup to pay $95,000 to the Department of Court Records

is an unconstitutional taking of property pursuant to the Fifth Amendment of

the United States Constitution. Witherup’s Brief at 45. Witherup specifically

asserts that ”the amount was wildly disproportionate to any work actually

            The fees to be received by the prothonotary of the
            court of common pleas of a county of the second
            class shall be as follows:

                                    ***

            (11) Funds on deposit.—
            (i) Receiving and distributing money paid into court
            for each dollar under $500 ……………………………… (4%)
            (ii) For each dollar exceeding $500 ………………… (1%)

We note that the statute does not indicate which party is responsible for
payment.

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performed by the county[,]” and that the $95,000 was taken without

procedural due process. Id. at 46, 50-53. Our review of the record reveals,

however, that Witherup raised this issue for the first time in its 1925(b)

statement.    Rule 302(a) of the Pennsylvania Rules of Appellate Procedure

provides that “[i]ssues not raised in the lower court are waived and cannot

be raised for the first time on appeal.” Pa.R.A.P. 302(a). “This waiver rule

applies even if the issue raised for the first time on appeal is a constitutional

question.”   Coulter v. Ramsden, 94 A.3d 1080, 1090 (Pa. Super. 2014)

(citing ABG Promotions v. Parkway Publishing, Inc., 834 A.2d 613, 619

(Pa. Super. 2003)). As Witherup waived this issue, we cannot address the

merits of its claim.

      For its third and fourth issues on appeal, Witherup argues that the trial

court erred by imposing sanctions in the form of interest and costs under

Rule 229.1 of the Pennsylvania Rules of Civil Procedure.       Pa.R.C.P. 229.1.

Witherup contends that the trial court did not have a legal basis to impose

the sanctions “given that none of the predicates to an award of interest

under Rule 229.1 had been established.”       Id. at 4; Pa.R.C.P. 229.1.     We

agree.

      “Our standard of review of issues concerning sanctions is one of abuse

of discretion by the trial court.” ACE American Ins. Co. v. Underwriters

at Lloyds and Companies, 939 A.2d 935, 945 (Pa. Super. 2007).              After

our review of the record, we conclude that the trial court abused its

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discretion by imposing sanctions in the form of interest against Witherup

pursuant to Rule 229.1.

     Rule 229.1 provides, in relevant part:

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

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

                 (1) invalidate the agreement of settlement as
                 permitted by law, or
                 (2) impose sanctions on the defendant as
                 provided in subdivision (e) of this rule.

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

                 (1) a copy of any document evidencing the
                 terms of the settlement agreement,
                 (2) a copy of the executed release,
                 (3) a copy of a receipt reflecting delivery of the
                 executed release more than twenty days prior
                 to the date of filing of the affidavit,
                 (4) a certification by the attorney of the
                 applicable interest rate,
                 (5) the form of order prescribed by subdivision
                 (h), and
                 (6) a certification by the attorney that the
                 affidavit and accompanying documents have
                 been served on the attorneys for all interested
                 parties.

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

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

Pa.R.C.P. 229.1.

      A plain reading of Rule 229.1(g) provides that a court shall impose

sanctions beginning on the twenty-first day after the defendant receives an

executed release. Id. In this case, no release had been signed when U.S.

Steel filed the Petition. See Trial Court Opinion, 7/15/14, at 3. Witherup

did not receive a fully executed release until March 27, 2014.      Trial Court

Opinion, 7/15/14, at 4. Under Rule 229.1(g), Witherup had twenty days, or

until April 14, 2014, to deliver the settlement funds to U.S. Steel. The trial

court, however, imposed the sanctions under Rule 229.1(g) on October 30,

2013, nearly five months prior to Witherup’s receipt of the executed release,

and five and a half months prior to Witherup’s deadline for delivering the

settlement funds. The trial court’s imposition of sanctions pursuant to Rule

229.1 was erroneous.

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      Moreover, Rule 229.1(e) requires that the Plaintiff, seeking the

imposition of sanctions pursuant to Rule 229.1(g), “shall file an affidavit with

the court attesting to non-payment.”      The Rule further requires that the

affidavit “be accompanied by … a copy of the executed release.” Pa.R.C.P.

229.1(e)(2). The record is devoid of any affidavit filed by U.S. Steel. Even

if U.S. Steel filed an affidavit, however, the affidavit would have failed to

satisfy the requirements of Rule 229.1(e)(2) as no executed release existed

at the time. As a result, U.S. Steel’s request for imposition of sanctions in

the form of interest failed to satisfy the requirements of Rule 229.1.5     We

therefore conclude that the trial court’s imposition of sanctions pursuant to

5
   We note that the trial court and U.S. Steel assert that the delay in
procuring the executed release was caused by Witherup’s requirement that
Power Piping sign the release, which was not a material element of the
Settlement Agreement. See U.S. Steel’s Brief at 4-5, 22; Trial Court
Opinion, 7/15/14, at 8. The trial court states in its 1925(a) opinion that
Witherup’s requirement that “a non-party, Power Piping [], and its
insurance carriers [] be parties to the settlement agreement to the extent
that Power Piping needed to execute a release in favor of Witherup prior to
any settlement[,]” was contrary to its recollection in settling the settlement
agreement between U.S. Steel and Witherup. Id. (emphasis in original).

The terms of the settlement agreement reached on September 17, 2013
were not placed on the record even though the event took place as the
result of a pre-trial conciliation. Moreover, because U.S. Steel could not
comply with the affidavit requirements of Pa.R.C.P. 229.1(e), there is
nothing in the record to establish the terms of the settlement agreement.
Thus, prior to the entry of the October 30, 2013 order, there was no basis
for the trial court to conclude that there was “no material dispute as to the
terms of the settlement or terms of the release[,]” which is a prerequisite to
imposing sanctions pursuant to Rule 229.1(g). See Pa.R.C.P. 229.1(g). As
the case unfolded and based upon cross petitions to enforce the settlement
agreement, it became clear that there was a material dispute as to the
terms of the settlement agreement.

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Rule 229.1 was erroneous and reversible error. Accordingly, we vacate the

portion of the trial court’s October 30, 2013 order imposing sanctions in the

form of interest against Witherup, pursuant to Rule 229.1(g).

     Affirmed in part and reversed in part. Jurisdiction relinquished.

Judgment Entered.

Joseph D. Seletyn, Esq.
Prothonotary

Date: 3/30/2015

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