Court Opinion

ID: 9707283
Source: CourtListenerOpinion
Date Created: 2023-08-26 02:07:41.654412+00
Date Added: 2024-06-11T18:22:30.469995
License: Public Domain

DEL SOLE, Judge,
concurring and dissenting:
I agree with the majority that the pleadings failed to state a claimed breach of commercial lease upon which lost profits may have been awarded and therefore join that part of the opinion denying the claim for lost profits. However, I must dissent from that part of the opinion which denied Appellee the $22,000 liquidated damages award.
The majority embraced the position that the award represented the enforcement of a penalty. Although this may be true, I nevertheless would hold that the agreement should be enforced. This was an agreement freely entered into by *594parties of substantially equal bargaining power, in order to assure the construction work was completed within the time called for in the construction schedule. In the event Appellant was unable to meet the construction schedule it agreed to pay Appellee $500 a day. This was an incentive for Appellant’s to complete the work within the agreed upon time schedule. I note that this type of agreement has become standard in modern day business. The Pennsylvania Department of Transportation (PennDOT) enters into this type of contract agreement regularly. I can discern no reason why there should be a distinction in the enforceability of such agreements based upon whether it is a private agreement freely entered into by consenting parties or one entered into for the benefit of the public.
We also note the recent Pennsylvania Supreme Court case of AM/PM Franchise v. Atlantic Richfield, 526 Pa. 10, 584 A.2d 915 (1990), adopted the position that parties should be entitled to prove good will damages. The court stated that historically, Pennsylvania has disallowed recovery for loss of good will damages or prospective profits in breach of warranty cases. The court noted that good will damages had always been found to be too speculative to permit recovery. See Michelin Tire Co. v. Schulz, 295 Pa. 140, 145 A. 67 (1929). In the AM/PM case the court stated:
... we believe that the rationale for precluding prospective profits under the rubric of “too speculative” ignores the realities of the marketplace and the science of modern economics. We believe that claims for prospective profits should not be barred ab initio. Rather plaintiffs should be given an opportunity to set forth and attempt to prove their damages.
The court thus overruled Michelin to the extent it prohibited a plaintiff from alleging a claim for damage to good will as a matter of law.
While admittedly the AM/PM case is a commercial code case, I find the language to be compelling. This case signifies that Pennsylvania will look to modern day approaches in enforcing contracts where contractual agree*595ments are freely entered into. The realities of the marketplace should not be ignored. Appellee faced the very real danger of economic losses due to the renovation work being conducted by Appellants. This led to an agreement between the parties of a construction schedule, which if not lived up to by Appellants would lead to a payment of $500 a day to Appellee. The fact that this figure was arbitrarily chosen is irrelevant. The crucial aspect of the agreement is that it was entered into freely between parties of equal bargaining strengths and sophistication. Therefore, I would find this agreement is enforceable. I would further hold that the per diem amount to be paid by Appellants to Appellee was in lieu of any claim for lost profits.