Court Opinion

ID: 4684985
Source: CourtListenerOpinion
Date Created: 2021-05-07 16:16:18.917606+00
Date Added: 2024-06-11T08:04:25.548953
License: Public Domain

J-S12034-21

NON-PRECEDENTIAL DECISION - SEE SUPERIOR COURT I.O.P. 65.37

 JRW SERVICE GROUP, LLC                 :    IN THE SUPERIOR COURT OF
                                        :         PENNSYLVANIA
                                        :
              v.                        :
                                        :
                                        :
 NEW AGE DEVELOPMENT GROUP,             :
 LLC                                    :
                                        :    No. 2309 EDA 2020
                      Appellant

          Appeal from the Judgment Entered November 17, 2020
  In the Court of Common Pleas of Chester County Civil Division at No(s):
                           No. 2019-01830-CT

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

MEMORANDUM BY MUSMANNO, J.:                          FILED: MAY 7, 2021

      New Age Development Group, LLC (“New Age”), appeals from the

Judgment entered against it and in favor of JRW Service Group, LLC (“JRW”).

We affirm.

      As found by the trial court, the factual history underlying the instant

case is as follows:

             On February 11, 2015, the United States Navy Engineering
      Facilities Command (“NAVFAC”) issued a solicitation for requests
      for proposal on a contract for work to be performed at the
      Philadelphia Naval Business Center (“Project”). … [New Age] was
      awarded the work for the Project in July 2015[,] on contract
      #40085-15-D-7509 (“Prime Contract”). The Prime Contract was
      a fixed price contract beginning in 2015[,] with options for four
      one-year extensions[,] for a total of five years of annual work.
      The base year was 2015-2016 (“Year One”)[,] and the option
      years were 2016-2017 (“Year Two”), 2017-2018 (“Year Three”),
      2018-2019 (“Year Four”), and 2019-2020 (“Year Five”).
J-S12034-21

           New Age solicited bids on the project for roof survey and
     drain and gutter cleaning work that fell within the scope of work
     under the Prime Contract (“Subcontract Work”). [] JRW … was
     awarded the Subcontract Work for Year One for a total price of
     $87,713.53.     New Age’s project manager, Shawn Kingsley
     [(“Kingsley”)], executed JRW’s proposal and authorized JRW to
     begin subcontract work on October 2, 2015 (“2015 Contract”).
     JRW was performing Subcontract Work at least as early as October
     19, 2015.

           On October 27, 2015, a New Age representative forwarded
     [to] JRW a proposed subcontract with the message, “Please
     execute and return immediately.” (“Proposed Subcontract”). The
     Proposed Subcontract misstated the job name, job location,
     project address, start date, and finish date for the Project[,] and
     otherwise contained provisions and terms not applicable to the
     Subcontract Work. JRW did not sign the Proposed Subcontract[,]
     and New Age did not pursue the matter.

          JRW performed and was paid in full for the Subcontract
     Work in Year One….

           NAVFAC extended the Prime Contract for Year Two. New
     Age requested JRW to perform the Year Two Subcontract Work
     with no increase in JRW’s price from the 2015 Contract. JRW
     agreed to an increase in its Subcontract Work[,] in exchange for
     exclusive rights to the Subcontract Work for each year of the
     Prime Contract.

          On September 16, 2016, JRW submitted a new proposal to
     New Age, substantially similar to the 2015 Contract, and reflecting
     the same prices for the Subcontract Work, but adding under
     Technical Application Notes the following term:

       Contract Length: No yearly increases for the duration of the
       five[-]year total contract (“2016 Contract”).

     On November 14, 2016, New Age project manager [] Kingsley
     signed the 2016 Contract and returned it to JRW. JRW performed
     and was paid in full for the Subcontract Work for Year Two.

          NAVFAC extended the Prime Contract for Year Three.
     Around December 2017, JRW and New Age engaged in a dispute
     over a separate and unrelated subcontract for work being

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     performed at the Philadelphia VA Hospital. On April 9, 2018, New
     Age issued correspondence to JRW relaying, “As per Section 12 of
     the Contract[,] ‘Termination of Subcontract for Convenience,’ New
     Age … has the right to “terminate this SUBCONTRACT at any time,
     without cause, upon providing SUBCONTRACTOR at least five
     days’ prior written notice of the effective date of termination.’ The
     effective date of this termination will be 4/13/2018” (“Termination
     Clause”). The language quoted is from the Proposed Subcontract.

           The operative contract, the 2016 Contract, does not contain
     the Termination Clause…. NAVFAC later extended the Prime
     Contract for Year Four and Year Five… New Age was awarded a
     judgment in the amount of $301,476.49 against JRW in a separate
     matter in the United States District Court for the Eastern District
     [of Pennsylvania] ….

Trial Court Decision, 7/1/20, at 1-4 (paragraph numerical designations

omitted, paragraphs reformatted).

     On February 14, 2019, JRW filed a breach of contract action against New

Age. Eventually, JRW filed an Amended Complaint. New Age filed an Answer

and New Matter to the Amended Complaint. After a bench trial, the trial court

entered a verdict against New Age, and in favor of JRW, in the amount of

$200,389.65. New Age filed post-trial Motions, which the trial court denied.

Following the entry of Judgment on the verdict, New Age filed the instant

timely appeal, followed by a court-ordered Pa.R.A.P. 1925(b) Concise

Statement of matters complained of on appeal.

     New Age presents the following claim for our review:

     Did the trial court commit an error of law or abuse its discretion
     when it ruled that it could not apply a final judgment of
     $301,476.49[,] held by [New Age] against [JRW,] as a set-off to
     the verdict, because [New Age] raised the set-off as a defense
     under [N]ew [M]atter[,] rather than as a counterclaim?

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J-S12034-21

Brief for Appellant at 4.

      New Age claims that its claim for set-off was properly raised under New

Matter.   Id. at 12.   New Age asserts that Pennsylvania courts have long

recognized the right to set-off one debt against another debt. Id. According

to New Age, a claim for set-off is an affirmative defense, “because it raises

new facts that, if true, would defeat [New Age’s] obligation to pay JRW.” Id.

at 13. New Age claims that it properly raised its claim of set-off under New

Matter, as required by Pa.R.C.P. 1030.     Id.   New Age challenges the trial

court’s legal conclusion that a set-off must be raised by means of a counter-

claim. Id. at 14-15.

      “The proper interpretation of a rule presents a question of law and our

standard of review is de novo.” In re Estate of Krasinski, 218 A.3d 1246,

1251 (Pa. 2019); Touloumes v. E.S.C. Inc., 899 A.2d 343, 346 n.4 (Pa.

2006). “Our scope of review, to the extent necessary to resolve the legal

question before us, is the entire record and is thus plenary.” Id.

      In its Order denying New Age’s post-trial Motions, the trial court

concluded that New Age’s failure to plead a set-off by means of a counter-

claim defeated its claim. See Trial Court Order, 10/1/7/20, at 1 n.1. While

we agree that New Age failed to properly plead its claim for a set-off, we do

so on a different basis. See In re A.J.R.-H., 188 A.3d 1157, 1175-76 (Pa.

2018) (explaining that the “right-for-any-reason” doctrine “allows an appellate

                                     -4-
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court to affirm the trial court’s decision on any basis that is supported by the

record.”).

      Our review of the record discloses that New Age presented the following

claim for a set-off in its New Matter:

      26. [JRW’s] claims are barred by the doctrine of set-off and
      recoupment.

Answer To Amended Complaint With New Matter, 5/17/13, at ¶ 26. Thus,

New Age raised its set-off defense in the form of a legal conclusion, and only

in the most cursory way.      New Age’s New Matter offers no allegation of

precisely what charges they would seek to set-off, or provide any explanation

of facts that would support a set-off claim. Because Pennsylvania is a fact-

pleading jurisdiction, see Youndt v. First Nat. Bank of Port Allegany, 868

A.2d 539, 544 (Pa. Super. 2005), inclusion of such allegations is indispensable

to the viability of the claim or defense raised. In their absence, the assertion

of a legal theory, such as the claim asserted by New Age, is not sufficient to

raise a legal defense. See Am. Rock Mechs., Inc. v. N. Abbonizio Contrs.,

Inc., 887 A.2d 322, 324 (Pa. Super. 2005). Cf. DelConte v. Stefonick, 408

A.2d 1151, 1153 (Pa. Super. 1979) (stating that “[a]ssertions of legal rights

and obligations in a complaint may be construed as conclusions of law, which

have no place in a pleading[.]”). Because New Age failed to adequately plead

a set-off, we affirm the Judgment entered by the trial court.

      Judgment affirmed.

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J-S12034-21

Judgment Entered.

Joseph D. Seletyn, Esq.
Prothonotary

Date: 5/7/21

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