Court Opinion

ID: 9693326
Source: CourtListenerOpinion
Date Created: 2023-08-25 16:37:22.255005+00
Date Added: 2024-06-11T18:19:44.903238
License: Public Domain

CAVANAUGH, Judge,
concurring:
I agree with the majority that the parol evidence rule should bar any evidence pertaining to the alleged contemporaneous oral agreement in this matter. However, I write separately for the following reasons.
First, I think it is important to note the anomalous background of this case. This matter proceeded in accordance with the Judge Pro Tempore system in Philadelphia. The employment of such a system suggests several considerations for an appellate court which, although not issues on appeal, I feel cannot go unnoticed. This case was tried over a period of several days in July, August and September of 1992 before Judge Pro Tempore Thomas B. Rutter and a jury. The reproduced record is contained in seven volumes and is in excess of 2,500 pages. The certified record is much larger. However, the post-trial motions were disposed of by The Honorable Mark I. Bernstein, a commissioned judge, who was not present for the original trial. Therefore, the post-trial motions were considered and adjudicated by a judicial officer who did not try the case and did not have the immediate hands-on intimacy of the case as would a trial judge.1
Therefore, I would note that while our appellate standard of review presupposes that we are addressing an issue decided by one who has had the opportunity to view the parties and the witnesses and to hear the testimony first-hand, this is not true of cases which employ the Judge Pro Tempore system. For this reason, I believe that in such cases our standard of review from the lower court’s disposition must be informed by a recognition that the post-trial judge was different from the Judge Pro Tempore who actually heard the case. While these considerations have not been articulated in any of our appellate decisions, I believe that the unusual nature of the case should not go unnoticed.
I also note that, because the majority has reversed and simply remanded for further proceedings, it is unclear what further proceedings might occur in this case on remand. Since we have ruled out the evidence admitted in violation of the parol evidence rule, it could be argued that there is no case remaining and the result is, in effect, a Judgment Notwithstanding the Verdict in favor of appellant, Fidelity Bank. However, it can also be argued that only a new trial may be granted as a result of this appellate decision which diminishes the record.
In the event that this case proceeds to a new trial, I wish to go on record as to other considerations which were raised by Fidelity Bank on appeal which may again be at issue upon re-trial. First, I would note my agreement with appellants on the issue of reliance damages. If appellee is successful at re-trial, damages, if any are proven, should properly be limited to reliance damages. See Green v. Interstate United Management Services Corp., 748 F.2d 827 (3d Cir.1984) (a plaintiff who is successful in a lawsuit for breach of an oral agreement that is subject to the statute of frauds is only entitled to recover reliance damages for the breach); see also Linsker v. Savings of America, 710 F.Supp. 598 (E.D.Pa.1989) (reliance damages are the only *1176measure of recovery for an action for breach of an oral contract subject to the statute of frauds; a plaintiff cannot be compensated for the loss of its bargain pursuant to such a contract). Reliance damages have been defined to be the expenses which are paid on account of the purchase and the “expenses incurred on the faith of the contract.” Polka v. May, 383 Pa. 80, 85, 118 A.2d 154, 156 (1955); Fannin v. Cratty, 331 Pa.Super. 326, 332, 480 A.2d 1056, 1059 (1984); Weir v. Rahon, 279 Pa.Super. 508, 513, 421 A.2d 315, 317 (1980). However, reliance damages are not automatic. Upon re-trial, the plaintiffs must show that they incurred expenses in reliance upon the oral promise, and that there is a direct relationship between those expenses and the defendant’s breach of its oral agreement. Weir, 279 Pa.Super. at 514-16, 421 A.2d at 318.
Additionally, I agree with appellant’s contention that the award of $250,000.00 made to Charles and Emily McMurtrie was contrary to law. The courts of this Commonwealth have long held that where the gravamen of a claim is injury to a corporation, the shareholders of the corporation may not claim injury to themselves rather than the corporation. In re Penn Central Securities Litigation, 347 F.Supp. 1324 (E.D.Pa.1972); Burdon v. Erskine, 264 Pa.Super. 584, 401 A.2d 369 (1979). The shareholder claims in this case are clearly derivative as the McMur-tries’ injuries, if any, are indirectly related to Kehr’s claim for breach of contract. As such, only Kehr may maintain this action. Mid-State Fertilizer v. Exchange National Bank, 877 F.2d 1333 (7th Cir.1989) (Seventh Circuit court of appeals dismissed as 'derivative the claims asserted by guarantors, who were also shareholders of the plaintiff corporation, against bank for refusing to make additional advances under a line of credit; in doing so, the court stated that guarantors are contingent creditors of a corporation who could not recover directly for injuries to the corporation; any injury to the guarantors was indirectly the result of the bank’s breach of its agreement with the corporation). Thus, because the claims for breach of contract or impairment or destruction of Kehr’s business is solely vested in the corporation and not in the shareholders, I would find that upon retrial, Charles and Emily McMurtrie are precluded from bringing a direct action against Fidelity Bank or any of its representatives for damages suffered as a result of the alleged breach of Fidelity Bank’s obligations to Kehr.
Finally, I want to note my confusion with respect to the appellants’ contentions concerning the liquidation in a commercially unreasonable manner issue. On page 9 of ap-pellee’s brief it is stated in footnote 9 “In his memorandum opinion, Judge Bernstein stated that the jury found in favor of Appellants on their claim that Fidelity liquidated Kehr’s assets in a commercially unreasonable manner. (Op. at p.3). This was not the case. In the second action filed by Appellants against Fidelity and its officer, Thomas Donnelly, Appellants claimed that Fidelity disposed of certain assets of Kehr, consisting of accounts receivable, inks and dyes, and a VOC permit, in a commercially unreasonable manner. (R.82A). The jury found that Fidelity and Donnelly collected the accounts receivable in a commercially reasonable manner. Appellants then withdrew their claims and a consensual judgment was entered in favor of Fidelity and Donnelly in that ease. (R.6a).”
On the other hand, the record in this case contains jury verdict interrogatory answers 15 and 16 which are at odds with Fidelity’s argument.
In conclusion, I concur in the result mandated by the majority opinion but would add the above stated considerations.

. I note that while the Judge Pro Tempore, Thomas B. Rutter, was in attendance at the hearing on the post-trial motions, the matter was disposed of by Order of Judge Bernstein alone.