Court Opinion

ID: 4343213
Source: CourtListenerOpinion
Date Created: 2018-11-20 18:43:59.059064+00
Date Added: 2024-06-11T14:49:06.611700
License: Public Domain

J-A20015-18

NON-PRECEDENTIAL DECISION – SEE SUPERIOR COURT I.O.P. 65.37

ZOKAITES PROPERTIES, L.P.,                        IN THE SUPERIOR COURT
                                                            OF
                                                       PENNSYLVANIA
                          Appellant

                     v.

BELL-PUG, INC., DENNIS M.
BLACKWELL, AND CAPUTO & CAPUTO,
P.C.,

                          Appellee                    No. 92 WDA 2018

              Appeal from the Order Entered December 12, 2017
              In the Court of Common Pleas of Allegheny County
                     Civil Division at No(s): GD 17-000585

BEFORE: BENDER, P.J.E., LAZARUS, J., and MUSMANNO, J.

MEMORANDUM BY BENDER, P.J.E.:                  FILED NOVEMBER 20, 2018

      Appellant, Zokaites Properties, L.P., appeals the December 12, 2017

order granting the preliminary objections filed by Caputo & Caputo, P.C., and

dismissing Appellant’s second amended complaint without leave to amend.

After careful review, we affirm.

      The trial court summarized the relevant facts and procedural history of

this case in its Pa.R.A.P. 1925(a) opinion:

            This matter arises from a debt allegedly owed to [Appellant]
      by [] Bell-Pug[, Inc. (“Bell-Pug”)] for unpaid rent. On December
      2, 2015, [Appellant] served a Notice of Distraint on [] Bell-Pug[]
      and, as [Bell-Pug] never filed a response to said notice,
      [Appellant] claims to have a valid lien on all of [Bell-Pug’s]
      personal property. In spite of this lien, [] Bell-Pug entered into
      an agreement to sell its liquor license to Emporio Village, LLC, on
      March 3, 2016. Pursuant to the agreement, Emporio Village was
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       to make payments to its own attorney, Louis Caputo, Esquire,
       which Attorney Caputo was to hold in escrow.

              In mid-March 2016, [Appellant’s] counsel allege[d] that he
       had a telephone conversation with Attorney Caputo, in which the
       latter agreed to hold all proceeds from the liquor license sale in
       escrow pending a resolution of the matter between [Appellant]
       and [] Bell-Pug. On March 21, 2016, [Appellant’s] counsel sent
       Attorney Caputo a letter purporting to memorialize an agreement
       arising out of the previous week’s conversation, writing: “Zokaites
       Properties accepts your offer to escrow any sale proceeds to be
       distributed pending order of court or agreement of the parties.”
       Attorney Caputo did not reply to this letter.

              On June 23, 2016, [Appellant] presented an Emergency
       Motion for Injunctive Relief to enjoin Attorney Caputo to retain
       any liquor license proceeds in escrow, as [Appellant] “did not trust
       Caputo to uphold” his agreement. Judge Michael Della Vecchia of
       this [c]ourt denied [Appellant’s] motion via an order dated
       September 12, 2016.

             On July 25, 2016, [Appellant’s] counsel sent Attorney
       Caputo another letter citing the alleged March 2016 agreement
       that the latter would retain any liquor license sale proceeds in
       escrow. Again, Attorney Caputo did not reply.

             At an unknown date, the sale of the liquor license was
       executed, and Attorney Caputo tendered payment to [] Bell-Pug’s
       attorney, Dennis Blackwell, Esquire.

             Appellant filed suit, and included claims against Attorney
       Caputo’s law firm, Caputo & Caputo, P.C., for breach of contract
       and promissory estoppel.[1] [] Caputo & Caputo[, P.C.] filed
       preliminary objections[ in the nature of a demurrer] and, on
       December 12, 2017, Judge Timothy Patrick O’Reilly of this [c]ourt
       issued an order sustaining the same. This timely appeal ensued[]
       and, in light of Judge O’Reilly’s retirement, this opinion in support
       of that order is being rendered by the undersigned[, Judge Patrick
       Connelly].

____________________________________________

1 Counts I, II, and III of Appellant’s second amended complaint asserted
claims against Bell-Pug and Attorney Blackwell and were previously dismissed
with prejudice by order of court dated October 20, 2017. Counts IV and V
against Caputo & Caputo, P.C. are the only remaining claims.

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Trial Court Opinion (“TCO”), 3/1/18, at 1-2 (citations to record omitted).

      On December 19, 2017, Appellant filed a timely notice of appeal,

followed by a timely court-ordered Pa.R.A.P. 1925(b) statement of errors

complained of on appeal. Herein, Appellant presents the following issues for

our review, which we have reordered for ease of disposition:

      1. Whether the lower court committed errors of law and fact in
         concluding that Appellant did not detrimentally rely on
         [Attorney Caputo’s] promise such that a claim of promissory
         estoppel arose thereby[?]

      2. Whether the lower court committed errors of law and fact in
         concluding that there was [no] valid contract between the
         parties[?]

Appellant’s Brief at 3.

      Before addressing the merits of Appellant’s claims, we note our well-

settled standard of review:

      A preliminary objection in the nature of a demurrer is properly
      granted where the contested pleading is legally insufficient.
      Preliminary objections in the nature of a demurrer require the
      court to resolve the issues solely on the basis of the pleadings, no
      testimony or other evidence outside of the complaint may be
      considered to dispose of the legal issues presented by the
      demurrer. All material facts set forth in the pleading and all
      inferences reasonably deducible therefrom must be admitted as
      true.

      In determining whether the trial court properly sustained
      preliminary objections, the appellate court must examine the
      averments in the complaint, together with the documents and
      exhibits attached thereto, in order to evaluate the sufficiency of
      the facts averred. The impetus of our inquiry is to determine the
      legal sufficiency of the complaint and whether the pleading would
      permit recovery if ultimately proven. This Court will reverse the
      trial court’s decision regarding preliminary objections only where
      there has been an error of law or abuse of discretion. When
      sustaining the trial court’s ruling will result in the denial of claim

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      or a dismissal of suit, preliminary objections will be sustained only
      where the case [is] free and clear of doubt.

Lugo v. Farmers Pride, Inc., 967 A.2d 963, 966 (Pa. Super. 2009) (quoting

Strausser v. PRAMCO III, 944 A.2d 761, 764-65 (Pa. Super. 2008)).

      Here, Appellant claims that the trial court erred in finding a lack of

consideration to establish the existence of a valid contract between Appellant

and Caputo & Caputo, P.C. Appellant’s Brief at 12. In support of its argument,

Appellant asserts that it detrimentally relied on Attorney Caputo’s promise to

retain the sale proceeds in escrow in its refraining from initiating other

collection action against Bell-Pug, id. at 22, and concludes that “detrimental

reliance serves as a substitute for consideration.” Id. at 12. Contrary to its

assertion, we deem Appellant’s claims to be wholly without merit.

      Preliminarily, we note:

      A cause of action for breach of contract must be established by
      pleading (1) the existence of a contract, including its essential
      terms, (2) a breach of a duty imposed by the contract and (3)
      resultant damages. While not every term of a contract must be
      stated in complete detail, every element must be specifically
      pleaded. Clarity is particularly important where an oral contract
      is alleged.

Pennsy Supply, Inc. v. American Ash Recycling Corp. of Pennsylvania,

895 A.2d 595, 600 (Pa. Super. 2006) (internal citations and quotation marks

omitted). “It is axiomatic that consideration is an essential element of an

enforceable contract.” Id. (internal citation and quotation marks omitted).

“A contract is formed when the parties to it 1) reach a mutual understanding,

2) exchange consideration, and 3) delineate the terms of their bargain with

sufficient clarity.” Weavertown Transport Leasing, Inc. v. Moran, 834

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A.2d 1169, 1172 (Pa. Super. 2003). “Consideration consists of a benefit to

the promisor or a detriment to the promissee.” Id.

      It is not enough, however, that the promisee has suffered a legal
      detriment at the request of the promisor. The detriment incurred
      must be the ‘quid pro quo’, or the ‘price’ of the promise, and the
      inducement for which it was made…. If the promisor merely
      intends to make a gift to the promisee upon the performance of a
      condition, the promise is gratuitous and the satisfaction of the
      condition is not consideration for a contract.

Id. (quoting Stelmack v. Glen Aiden Coal Co., 14 A.2d 127, 128 (Pa.

1940)). Whether a contract is supported by consideration presents a question

of law. Pennsy Supply, Inc., 895 A.2d at 601.

      In the instant matter, Appellant’s breach of contract claim against

Caputo & Caputo, P.C. clearly fails, as the averments in its second amended

complaint fail to establish the exchange of consideration, which is an essential

component of a contract. Appellant’s complaint specifically avers:

      [Appellant] detrimentally relied on this contract by refraining from
      initiating other legal action to collect these proceeds including
      refraining from initiating collection action against the license which
      was liened by [Appellant] under the Notice of Distraint, the
      Uniform Commercial Code, the Assignment of Leases and Rents
      and/or further lien action against the license by initiating action
      with the Liquor Control Board, among other action [Appellant]
      could have taken but for the contract with [Attorney] Caputo.

Appellant’s Second Amended Complaint, 7/17/17, at 13 ¶ 63.                     While

forbearance from instituting legal action may constitute good consideration

for an agreement, “it must be bargained for and given in exchange for the

promise made by the promisor.” Cardamone v. University of Pittsburgh,

384 A.2d 1228, 1233 (Pa. Super. 1978) (internal citations omitted; emphasis

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added). Appellant’s complaint fails to aver that Attorney Caputo’s promise

was made for the purpose of inducing Appellant’s forbearance. See Pennsy

Supply, Inc., 895 A.2d at 601 (stating that to constitute consideration for a

contract, “the promise must induce the detriment and the detriment must

induce the promise”).

     In support of its determination that Appellant failed to establish the

existence of a valid contract, due to lack of consideration, the trial court

reasoned as follows:

     Even accepting all material facts set forth as true, it is not clear
     that Attorney Caputo received any consideration in exchange for
     his alleged promise. Moreover, [Appellant’s] allegation that “[it]
     detrimentally relied on this contract” indicates that forbearance
     was not explicit condition of the contract itself, but ancillary to the
     same.

            This reading is further supported by the March 21, 2016
     letter purporting to memorialize the agreement, which mentions
     Attorney Caputo’s alleged promise “to hold any sales proceeds in
     escrow pending a resolution between [Appellant] and Bell-Pug,”
     but makes no reference to [Appellant’s] refraining from initiating
     other legal action. In fact, the March 21, 2016 letter never
     references any consideration from [Appellant] for said promise.
     Accordingly, lacking consideration, [Appellant] fails to allege the
     existence of a contract. See Geisinger Clinic v. DiCuccio, 606
     A.2d 509, 512 (Pa. Super. 1992) (“A contract is evidenced by
     mutuality of obligation. A mutuality of obligation exists when both
     parties to the contract are required to perform their respective
     promises.”).

            Even assuming arguendo that, contemporaneous to
     Attorney Caputo’s alleged promise, [Appellant] had pledged to
     refrain from initiating further legal action, this alone does not
     constitute consideration. A contract would arise if Attorney
     Caputo’s alleged promise was made for the purpose of inducing
     [Appellant’s] forbearance, but [Appellant] makes no such
     allegation. See Pennsy Supply, Inc. … , 895 A.2d [at] 601 …

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      (“If, however, the promisor made the promise with no particular
      interest in the detriment that the promisee had to suffer to take
      advantage of the promised gift or other benefit, the detriment was
      incidental or conditional to the promisee’s receipt of the benefit.”)
      (emphasis removed). Indeed, Attorney Caputo was merely an
      escrow agent in this transaction, “had no other rights or duties”
      than to hold and ultimately transmit $4,500, and would have
      gained nothing from [Appellant’s] forbearance.

TCO at 3-4 (citations to record omitted). After careful review of the record,

we discern no error of law or abuse of discretion by the trial court.

      Next, Appellant claims that the trial court erred in finding that it failed

to establish a cause of action for promissory estoppel. Appellant asserts that

it properly averred detrimental reliance in its second amended complaint, and

that the trial court failed to accept the statements in its complaint as true in

accordance with the applicable standard of review. Appellant’s Brief at 12,

18. After careful review, however, we conclude that, even while accepting all

factual averments as true, Appellant’s second amended complaint is legally

insufficient to sustain a claim for promissory estoppel.

      It has been well-established that:

      The doctrine of promissory estoppel permits a claimant to enforce
      a promise in the absence of consideration. To maintain a
      promissory estoppel action[,] a claimant must aver the following
      elements: (1) the promisor made a promise that it should have
      reasonably expected would induce action or forbearance on the
      part of the promise; (2) the promisee actually took action or
      refrained from taking action in reliance on the promise; and (3)
      injustice can be avoided only by enforcing the promise.

Sullivan v. Chartwell Inv. Partners, LP, 873 A.2d 710, 717-18 (Pa. Super.

2005) (internal citations and quotation marks omitted).          “However, the

doctrine of promissory estoppel does not apply if the complaining party acted

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on its own will and not as the result of the [promisor’s] representations.” GMH

Associates, Inc. v. Prudential Realty Group, 752 A.2d 889, 904 (Pa.

Super. 2000).

      Here, it is apparent based on Appellant’s own averments, that it did not

rely on Attorney Caputo’s alleged promise and refrain from taking legal action

to collect the liquor license sale proceeds. Appellant expressly admitted in its

complaint to the filing of a motion for preliminary injunction against Attorney

Caputo, “because it did not trust [him] to uphold [their] agreement to retain

the proceeds in escrow.” Appellant’s Second Amended Complaint at 7 ¶ 26.

      As the trial court so aptly stated:

      Promissory estoppel requires that “the promisee actually took
      action or refrained from taking action in reliance on the promise.”
      V-Tech Services, Inc. v. Street, 72 A.3d 270, 276 (Pa. Super.
      2013). While [Appellant] does specifically allege this forbearance
      (“[Appellant] detrimentally relied on this contract by refraining
      from initiating other legal action”), [Appellant] also admits it did
      bring further legal action by seeking a preliminary injunction
      against Attorney Caputo to enforce his alleged promise.
      Moreover, [Appellant’s] admission that it sought the preliminary
      injunction “because it did not trust Caputo to uphold its agreement
      to retain the proceeds in escrow,” belies [Appellant’s] claim that
      it reasonably believed Attorney Caputo would keep his alleged
      promise.

TCO at 4-5 (citations to record omitted). Moreover, we note that enforcement

of the alleged promise is not the only means by which to avoid injustice. See

Sullivan, supra. Rather, Appellant’s remedies lie with Bell-Pug. Caputo &

Caputo, P.C. was merely acting as an escrow agent in accordance with a

written purchase and escrow agreement regarding the sale of the liquor

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license and has no other connection to Appellant’s underlying dispute between

Appellant and Bell-Pug. Thus, we discern no error of law or abuse of discretion

by the trial court.

      In light of the foregoing, we affirm the December 12, 2017 order

sustaining Caputo & Caputo, P.C.’s preliminary objections and dismissing

Appellant’s second amended complaint without leave to amend.

      Order affirmed.

Judgment Entered.

Joseph D. Seletyn, Esq.
Prothonotary

Date: 11/20/2018

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