Court Opinion

ID: 4635808
Source: CourtListenerOpinion
Date Created: 2020-11-24 18:08:56.044598+00
Date Added: 2024-06-11T07:58:26.211176
License: Public Domain

J-A28002-20

NON-PRECEDENTIAL DECISION - SEE SUPERIOR COURT I.O.P. 65.37

 MICHAEL DUFFY                             :   IN THE SUPERIOR COURT OF
                                           :        PENNSYLVANIA
                                           :
              v.                           :
                                           :
                                           :
 DANIEL ZHAO                               :
                                           :
                    Appellant              :   No. 1692 WDA 2019

            Appeal from the Judgment Entered October 18, 2019
     In the Court of Common Pleas of Allegheny County Civil Division at
                        No(s): No. GD-12-003835

BEFORE: OLSON, J., MURRAY, J., and McCAFFERY, J.

MEMORANDUM BY OLSON, J.:                         FILED NOVEMBER 24, 2020

      Appellant, Daniel Zhao, appeals pro se from the judgment entered on

October 18, 2019, in favor of Plaintiff, Michael Duffy (hereinafter “Plaintiff”),

and against Appellant, in the amount of $625,000.00. We affirm.

      The trial court ably summarized the underlying facts of this case:

        The underlying action arose from the souring of a
        longstanding business relationship between [Plaintiff] and
        [Appellant]. In 1997, Plaintiff and [Appellant] entered into a
        joint venture to sell industrial equipment to companies in the
        metal industry.

        Between 1997 and 2009, the parties engaged in more than
        [20] business opportunities where they arranged for the
        purchase and sale of equipment. [Appellant] formed the
        company United Rolling Mill Technology, LLC ("URT") in 2007.
        Plaintiff was not employed by URT, however, he held business
        cards and an email address with the company.

        Plaintiff and [Appellant] continued to make sales through
        June 2009. At that time, [Appellant] alerted Plaintiff to a
        potential sale with the Dalishen Group ("Dalishen"), which is
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        located in China. [Appellant] asked Plaintiff to find a metal
        finishing mill that would have for sale equipment required by
        Dalishen. The parties learned that Aleris Aluminum Sheet
        Rolling Mill ("Aleris") was for sale and traveled to Canada to
        visit and inspect the mill. They further learned that Aleris
        produced the type of equipment needed by Dalishen.
        Dalishen ultimately purchased the equipment and URT was
        paid a $2.5 million commission. [Appellant] failed to share
        the commission with Plaintiff.

Trial Court Opinion, 1/6/20, at 1-2.

      Following a four-day trial, the jury found in favor of Plaintiff, and against

Appellant, in the amount of $625,000.00. Appellant filed a post-trial motion

and raised the following claims:

        During the trial, [Appellant] was not permitted to present any
        evidence, despite having already presented the planned
        exhibits to the Plaintiff during [Appellant’s] deposition. Such
        evidence, if viewed by the jury, would have refuted Plaintiffs
        testimony and exhibits. The jury never saw any exhibits from
        [Appellant].

        During the trial, [Appellant] was instructed to present [his]
        closing statement ahead of Plaintiff's closing statement, this
        was against standard procedure and prevented [Appellant]
        from making an effective statement to the jury before jury
        deliberations.

        Question 2 of the verdict and interrogatories to the jury is
        about unjust enrichment claim. The wording of Question 2 is
        inappropriate. The question mistakenly stated that "Mr. Zhao
        keeping the full $2,500,000.00 commission profit from the
        Aleris equipment sale." The mistakes occurred on multiple
        fronts: (a) Mr. Zhao did not keep the full $2.5 million, the
        $2.5 million was paid by sellers of Aleris to URT, LLC, a limited
        liability corporation; (b) the $2.5 million was not commission
        profit, it was revenue pre-cost URT generated from the
        commission of the sale; (c) the Aleris sale was not about
        equipment, but was a sale of the entire Aluminum metals
        plant. Thus, [Appellant] did not receive personal benefit in
        the amount of $2.5 million from the Aleris plant sale. The jury

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       should not have been instructed to consider [Appellant]
       personally benefitted in the amount of $2.5 million when
       deliberating unjust enrichment claim.

       However, unjust enrichment is not within the Plaintiff's legal
       basis for claims in the Plaintiff pretrial statement. In Plaintiff's
       pretrial statement only contained two claims: breach of
       partnership agreement and breach of fiduciary duty.
       Importantly, jury rejected the Plaintiff's allegation that
       Plaintiff Michael Duffy and [Appellant] Daniel Zhao formed an
       oral partnership agreement, or a partnership by implication,
       to identify and pursue opportunities together to buy and re-
       sell industrial equipment in the metals industry, and to
       facilitate the sale and purchase of such equipment directly by
       buyers and sellers, and to share equally in the profits.

       Therefore, jury determined that there was no partnership
       agreement between Plaintiff and [Appellant], the basis for
       Plaintiff's complaint. [Appellant] could not be held responsible
       for breach of partnership agreement or breach of fiduciary
       duty if there was never a partnership. During the trial,
       Plaintiff's only claim was the formation of the partnership with
       [Appellant], and Plaintiff never made any claim about any
       other arrangement with [Appellant] for any compensation.
       The jury should not have been instructed to consider unjust
       enrichment and award the Plaintiff benefits.

       Moreover,    consistent    with    [Appellant’s]   preliminary
       objections and brief in support of preliminary objections filed
       on Jan 22, 2013, Plaintiff's unjust enrichment claim fails to
       state a claim upon which relief can be granted.

       Plaintiff failed to meet the pleading requirements of Rule
       1019(f).

          1. Plaintiff's amended complaint fails to satisfy the specific
          pleading requirements of Rule 1019(1) of the
          Pennsylvania Rules of Civil Procedure. Damages in
          quantum meruit and for unjust enrichment—i.e., special
          damages—must be specifically pled in a party's
          complaint. Pa.R.Civ.P. 1019(f); Pulli v. Warren Nat.
          Bank, 412 A.2d 464, 465 (Pa. 1979). The party seeking
          to recover on a theory of quantum meruit has the burden
          of proving the performance of services, the acceptance of

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          such services, and the valuation of those services. In re
          Dart's Estate, 232 A.2d 724, 726 (1967); Lenker v.
          Thayer, 3 Pa. D. & C.2d 117, 120 (Pa. Corn. P1. 1955).

          Here, Plaintiff's complaint makes no allegation regarding
          the reasonable value of the services he rendered to
          [Appellant] or the injustice that would result if [Appellant]
          retained the benefit of such services. The Plaintiff never
          discussed the value of services rendered in the absence
          of implied partnership agreement. Instead, the complaint
          merely states that Plaintiff expected to be paid 50% of
          the fee received by URT and that he and [Appellant]
          agreed to the same. Because such minimal statements do
          not satisfy the specific pleading requirements of Rule
          1019(f) and because jury rejected the existence of the
          partnership agreement, this court should not have
          instructed jury to consider unjust enrichment claim.

          2. Plaintiff failed to plead that the value of his services
          exceeds [Appellant’s] offer of payment.

          Unjust enrichment also fails because Plaintiff alleged that
          [Appellant] offered him payment for his services but failed
          to prove that this payment was unreasonable outside of
          the purview of their implied partnership. To establish a
          claim under the equitable doctrine of unjust enrichment,
          a plaintiff must show: (a) benefits conferred on one party
          by another; (b) appreciation of such benefits by the
          recipient; and (c) acceptance and retention of those
          benefits under such circumstances that it would be
          inequitable for the recipient to retain the benefits without
          the payment of their value. Durst v. Milroy Gen.
          Contracting, Inc., 52 A.3d 357, 360 (Pa. Super. Ct.
          2012).

          Because Plaintiff's allegation that [Appellant’s] offered
          payment is inequitable is based on the partnership
          agreement between them, and because jury rejected the
          existence of this agreement, this court should not have
          included unjust enrichment claim in questions to the jury.

       In conclusion, due to Question 2 in the interrogatories to the
       jury, the amount of money awarded to the Plaintiff was

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        excessive, and [Appellant] motions to this court to remittitur
        relief.

Appellant’s Post-Trial Motion, 9/25/19, at 1-3 (some capitalization omitted).

      The trial court denied Appellant’s post-trial motion on October 16, 2019

and, on October 18, 2019, judgment was entered on the verdict.

      Appellant filed a timely notice of appeal. He raises the following claims

to this Court:

        1. Did the trial court err when the trial court judge failed to
        disqualify and recuse himself for bias and prejudice against
        [] Appellant?

        2. Did the trial court err when [the] trial court judge let his
        own bias influence [the] jury and effect an outcome of the
        trial that aligns with his own bias?

Appellant’s Brief at 12 (some capitalization omitted).

      On appeal, Appellant claims that the trial court showed unfair bias

against him and that the trial court judge erred in failing to “disqualify and

recuse himself for bias and prejudice against Appellant.” Id. at 24. According

to Appellant, the trial court judge was biased against him because: the judge

“had already formed an opinion as to the desired outcome of the trial prior to

the start of trial;” the judge “repeatedly interrupted Appellant during

[Appellant’s] opening statement to the jury;” during trial, “Appellant noticed

what he would later realize were potentially ex parte communications between

[Plaintiff’s counsel] and [the] trial court judge;” the judge “attempt[ed] to

dismiss the jury” during trial; the judge “allow[ed] his bias to impact rulings

on evidence;” the judge “allow[ed] his own opinion to impact interrogatories

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to the jury;” and, the judge “allow[ed] his bias to influence jury deliberations

and direct[ed the] jury to reach an outcome in line with [the] trial court judge’s

opinion.” Id. at 24-45 (some capitalization omitted).

      As our Supreme Court has held, “[i]in this Commonwealth, a party must

seek recusal of a jurist at the earliest possible moment, i.e., when the party

knows of the facts that form the basis for a motion to recuse. If the party

fails to present a motion to recuse at that time, then the party's recusal issue

is time-barred and waived.”      Lomas v. Kravitz, 170 A.3d 380, 390 (Pa.

2017).   In this case, Appellant did not request that the trial court recuse

himself at any time prior to or during trial and Appellant did not raise any of

his current claims of bias or error during trial or in his post-trial motion.

Further, although Appellant claims that he only became “convinced” of the

trial court’s bias during oral argument on his post-trial motion, all of

Appellant’s claims relate to actions that occurred during trial, in front of

Appellant, and would have been known to Appellant at the time they occurred.

See Appellant’s Brief at 20.

      Therefore, since Appellant failed to seek the trial court’s recusal during

trial – when Appellant would have “know[n] of the facts that form[ed] the

basis” of his recusal claims – and since Appellant did not include any of his

current claims in his post-trial motion, all of Appellant’s claims on appeal are

waived. See Lomas, 170 A.3d at 390; Pa.R.A.P. 302(a) (“[i]ssues not raised

in the trial court are waived and cannot be raised for the first time on appeal”);

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Pa.R.C.P. 227.1(b) (“post-trial relief may not be granted unless the grounds

therefor . . . are specified in the motion”).

      Judgment affirmed. Jurisdiction relinquished.

Judgment Entered.

Joseph D. Seletyn, Esq.
Prothonotary

Date: 11/24/2020

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