Court Opinion

ID: 4366097
Source: CourtListenerOpinion
Date Created: 2019-02-08 18:38:07.066708+00
Date Added: 2024-06-11T14:48:44.260532
License: Public Domain

J-A26017-18

NON-PRECEDENTIAL DECISION - SEE SUPERIOR COURT I.O.P. 65.37

 ALEX M. KEDDIE IV, IN HIS              :    IN THE SUPERIOR COURT OF
 INDIVIDUAL CAPACITY AND                :         PENNSYLVANIA
 DERIVATIVELY ON BEHALF OF              :
 CROSSETT INC., A PENNSYLVANIA          :
 BUSINESS CORPORATION                   :
                                        :
                   Appellant            :
                                        :
                                        :    No. 104 WDA 2018
              v.                        :
                                        :
                                        :
 JANET M. GREGORY, IN HER               :
 INDIVIDUAL CAPACITY AND AS             :
 PRESIDENT AND CHAIRMAN OF THE          :
 BOARD OF DIRECTORS OF                  :
 CROSSETT, INC., AND DOUGLAS C.         :
 SMITH, IN HIS INDIVIDUAL               :
 CAPACITY AND AS VICE PRESIDENT         :
 OF CROSSETT, INC.                      :

                 Appeal from the Order December 1, 2017
  In the Court of Common Pleas of Warren County Civil Division at No(s):
                           No. A.D. 450 of 2012

BEFORE: BENDER, P.J.E., SHOGAN, J., and MURRAY, J.

MEMORANDUM BY SHOGAN, J.:                        FILED FEBRUARY 8, 2019

     Alex M. Keddie IV (“Keddie”), in his individual capacity and derivatively

on behalf of Crossett, Inc. (“Crossett”), a Pennsylvania Business Corporation

engaged in trucking services, appeals from the order entered on December 1,

2017, by the Court of Common Pleas of Warren County finalizing this matter.

We affirm.
J-A26017-18

      The parties, Keddie, Janet M. Gregory (“Gregory”), and Douglas Smith

(“Smith”), were employees and shareholders of Crossett. Trial Court Opinion,

12/23/13, at 5-6. At the time of litigation, Keddie served as Chief Executive

Officer of Crossett. Gregory was the former President and Chairman of the

Board of Directors of Crossett. Id. Smith was the former Vice President of

Crossett. Id.

      Initially, Keddie and Gregory owned the company jointly. Trial Court

Opinion, 12/23/13, at 4. After prolonged conflict between the two, Gregory

orchestrated a takeover of the company with Smith’s help and fired Keddie

during a July 23, 2012 shareholders’ and Board of Directors meeting. Id. at

7-13. Keddie filed a Complaint for Declaratory Judgment on August 9, 2012,

against Gregory and Smith, collectively (“Appellees”). Id. at 1-2. In Count I

of the complaint, Keddie sought a preliminary and permanent injunction

seeking, inter alia, invalidation of the actions taken at the July 23, 2012

meeting and reinstatement of Keddie to the Board of Directors. Id. at 2.

      By order entered October 23, 2012, the trial court granted Keddie’s

motion for a preliminary injunction. Order, 10/23/12, at 1-2. The preliminary

injunction granted Keddie the following relief: 1) reinstating Keddie as CEO

of Crossett, retroactively to July 23, 2012; 2) reinstating Keddie to the Board

of Directors of Crossett; 3) setting aside as invalid all actions taken at the July

23, 2012 stockholders’ meeting, including the election of a new Board of

Directors; 4) setting aside as invalid all actions taken at the July 23, 2012

                                       -2-
J-A26017-18

Board of Directors’ meeting; 5) reinstating the Board of Directors as it was

constituted prior to the July 23, 2012 shareholders’ meeting; 6) reinstating

the officers of Crossett as they existed prior to the July 23, 2012 shareholders’

meeting; and 7) delineating the right to vote the Employee Stock Ownership

Plan (“ESOP”) shares by restricting that right to the full Board of Directors

only. Order, 10/23/12, at 1-2.

      On January 22, 2013, Keddie filed a motion for summary judgment,

seeking 1) an order making permanent the preliminary injunction, 2) damages

by virtue of Keddie’s position as a shareholder of Crossett, and 3) damages

by virtue of Keddie’s individual position with respect to Crossett. By order

entered December 23, 2013, the trial court granted Keddie’s motion for

summary judgment in part and denied it in part as follows: 1) the October

23, 2012 preliminary injunction was made permanent; 2) the motion for

summary judgment was granted as to liability for breach of fiduciary duty by

Gregory but denied as to damages and as to Smith’s breach of fiduciary duty;

and 3) the motion for summary judgment was granted as to liability for breach

of fiduciary duty by Gregory but denied as to damages and as to Smith’s

breach of fiduciary duty. Order, 12/23/13, at 1.

      After partial summary judgment was granted, further discovery was

conducted, pretrial motions were filed, and the parties reached a settlement

agreement that was entered as an order of court on June 30, 2014. The June

30, 2014 order stated the case was to be marked “‘settled and discontinued

                                      -3-
J-A26017-18

with prejudice.’ This court shall retain jurisdiction to enforce the settlement

agreement and to take any action with respect to other pending matters.”

Order, 6/30/14, at 1. Smith and Gregory entered into substantially identical

settlement agreements (“Settlement Agreements”).1          The purpose of the

Settlement Agreements was to set forth the terms and conditions by which

Keddie would purchase both Gregory’s and Smith’s stock ownerships in

Crossett. Article II, Paragraph 2.2 of the Settlement Agreements set forth the

Formula for “Determination of Purchase Price, Down Payment, Original Note

Principal, Interest Rate, etc.” Smith/Gregory Settlement Agreements, 5/1/14,

at Article II, Paragraph 2.2.

       Paragraph 2.3 of the Settlement Agreements provided for a one-time

adjustment of the per-share purchase price and set forth the means by which

the one-time adjustment of the per-share purchase price would be

determined.      Smith/Gregory Settlement Agreements, 5/1/14, Article II,

Paragraph 2.3. The Settlement Agreements state that the adjustment would

be based on the final per-share valuation for the calendar year ended

December 31, 2013, of the shares of the common stock of Crossett held by

the Company’s ESOP. Id. Paragraph 2.3 further provides that the Vineyard

____________________________________________

1 The purchase price as identified in Article II, Paragraph 2.1 of the respective
agreements, differs. The purchase price for Smith was $239,154.00, and for
Gregory it was $1,618,960.00. Smith/Gregory Settlement Agreements,
5/1/14, Article II, Paragraph 2.1. Furthermore, the Formulas included in
Article II, Paragraph 2.2 of the respective Settlement Agreements differ, each
reflecting the shares held by the individual. Id. at Paragraph 2.2.

                                           -4-
J-A26017-18

Group, LLC (“Vineyard”), a valuation company that had been used by Crossett

in 2011 and 2012 to conduct Crossett ESOP share valuations, would conduct

the 2013 ESOP valuation. Id. In calculating the 2013 ESOP valuation shares,

Vineyard was to use substantially the same procedures, methods, and

reasoning in calculation that it had used for its 2011 and 2012 ESOP share

valuations.     Smith/Gregory Settlement Agreements, 5/1/14, Article II,

Paragraph 2.3.

       In November 2014, Vineyard issued its report on the 2013 valuation at

$174.00 per share.        Keddie disagreed with the valuation as performed by

Vineyard. Despite his challenges to that valuation, however, Keddie filed the

ESOP Form 55002 valuation. In his letter accompanying the filing of Form

5500, which Keddie signed as CEO and President of Crossett, he stated that

the valuation was to be used by the trustee (Northwest Savings Bank) for

purposes of ESOP distributions in 2014 only and for no other purpose. Trial

Court Opinion, 9/2/16, at 3-4.          Because Keddie was dissatisfied with the

Vineyard valuation, he hired LitCon Group, LLC (“LitCon”) to examine the

Vineyard report to determine if it met the requirements of Paragraph 2.3 of

the Settlement Agreements.            Id.      LitCon’s report took exception to the

____________________________________________

2Testimony at the February 29, 2016 hearing established that Form 5500 is
an annual report filed by the ESOP which is a public disclosure of plan assets.
N.T., 2/29/16, at 178.

                                            -5-
J-A26017-18

$174.00 per share set by Vineyard and set a value per share of $127.00. Id.

at 4.

        On March 26, 2015, Keddie filed a “motion to enforce settlement

agreement”.     On April 15, 2015, Appellees filed a “motion to enforce the

settlement agreement”. A hearing on these motions was held on February

16, 17, and 29, 2016.

        On September 2, 2016, the trial court granted Gregory’s and Smith’s

motion to enforce the settlement agreement, and denied Keddie’s motion.

Keddie filed a notice of appeal on September 14, 2016, which was docketed

with this Court at 1372 WDA 2016.

        Because in previous court management orders the trial court had

directed that “[a]ttorneys’ fees and expenses shall be considered only after

the pending motions are resolved,” Gregory and Smith filed a motion to quash

the appeal as interlocutory, because the motion for attorneys’ fees and costs

was still outstanding. Order, 5/12/15, at 1. Due to the issue of attorneys’

fees and costs having been expressly reserved by the trial court, the appeal

was deemed interlocutory, and this Court quashed the appeal.             Order,

11/15/16, at 1; see Joseph F. Cappelli & Sons v. Keystone Custom

Homes, 815 A.2d 643, 648 (Pa. Super. 2003) (Because the trial court

specifically reserved the issue and because the right to attorneys’ fees arose

as a function of the rights determined in the underlying litigation, the trial

court order was not final absent resolution of the attorneys’ fees issue.).

                                     -6-
J-A26017-18

       On December 1, 2017, the trial court issued an order directing Keddie

to pay Gregory’s and Smith’s attorneys’ fees and costs in the amount of

$255,009.96. On December 28, 2017, Keddie filed the instant appeal from

the September 2, 2016, and December 1, 2016, orders. Keddie and the trial

court complied with Pa.R.A.P. 1925.

       Keddie presents the following issues for our review:

I.     Whether the trial court committed an error of law by accepting the
       Company’s [Employee Stock Ownership Plan (“ESOP”)] 2013
       valuation to calculate the buyout amounts under the Settlement
       Agreements even though the author of the 2013 valuation
       admitted that his valuation did not comply with the [Conforming
       Valuation Requirement(“CVR”)] – i.e., it was not performed
       “substantially in accordance with the procedures, methods and
       reasoning used by the Company for its 2011 and 2012 ESOP
       valuations”?

II.    Whether the trial court committed another error of law by not only
       ignoring the plain language of the CVR, but also the undisputed
       evidence that the valuation company promised that its 2013
       valuation would “use the same approach for 2013 and future years
       that was used for 2012”?

III.   Whether the trial court committed an error of law by using the
       2013 valuation to value the Company to calculate the buy out
       amounts even though the valuation itself warned that it “should
       not be used for any purpose other than for ESOP purposes.”

IV.    Whether the trial court committed an error of law by finding that
       any remedy for the 2013 valuation’s failure to comply with the
       CVR was “impossible” because that valuation had been accepted
       for ESOP purposes?

V.     Whether the trial court erred by awarding attorney’s fees and
       costs to [Appellees] when they are not the “prevailing party” as
       required by Article 14.1 of the Settlement Agreements, and
       further erred by not applying the lodestar analysis when
       determining the reasonableness of [Appellees’] request for
       attorney’s fees and expenses?

                                      -7-
J-A26017-18

Keddie’s Brief at 4-5.

       We first note that despite presenting five issues in his statement of

questions involved as “I-V”, in the argument section of his appellate brief

Keddie presents a single issue identified as “I”, and seven sub-issues identified

as “A-G”. Keddie’s Brief at 31-43. Although he failed to file a brief compliant

with Pa.R.A.P. 2119,3 we will not find Appellant’s issues waived.       Keddie’s

inconsistent presentation of argument, however, hampers somewhat our

ability to concisely address separately each issue as presented in his

statement of questions. Thus, we will address together the first four issues

Keddie proffers in his statement of questions involved.

       In his first four issues on appeal, Keddie maintains that the trial court

erred when it accepted the 2013 ESOP valuation to calculate the buyout

amounts under the Settlement Agreements.             Keddie’s Brief at 31-41.

Specifically, Keddie contends that the trial court erred in interpreting the CVR

to allow the 2013 valuation to utilize procedures, methods, and reasoning not

____________________________________________

3 In relevant part, Pa.R.A.P. 2119(a) provides: “The argument shall be divided
into as many parts as there are questions to be argued; and shall have at the
head of each part--in distinctive type or in type distinctively displayed--the
particular point treated therein, followed by such discussion and citation of
authorities as are deemed pertinent.”         Appellate briefs must conform
materially to the requirements of the Pennsylvania Rules of Appellate
Procedure, and this Court may quash or dismiss an appeal if the defect in the
brief is substantial. In re Ullman, 995 A.2d 1207, 1211 (Pa. Super. 2010);
Pa.R.A.P. 2101.

                                           -8-
J-A26017-18

substantially the same as those used in the valuations for years 2011 and

2012. Keddie’s Brief at 31. Keddie asserts that:

     [a]s a matter of law, the trial court erred by disregarding the CVR’s
     unambiguous requirement that the final 2013 valuation use the
     same procedures, methods, and reasoning in the 2011 and 2012
     valuations. Instead, the trial court mistakenly read the CVR to
     permit the use of any professionally-prepared valuation to
     calculate the PPA even if the procedures, methods and reasoning
     used were indisputably changed from the prior years. The
     Settlement Agreements, however, unambiguously condition the
     acceptance of the final 2013 valuation needed to calculate the PPA
     on the CVR, which requires the valuation to be performed
     essentially and materially in conformity with the procedures,
     methods and reasoning used in the 2011 and 2012 valuations.
     Contrary to the CVR’s plain language, the trial court’s
     interpretation effectively wrote that essential protective covenant
     out of the Settlement Agreement.

Id. at 28. Keddie further argues that if the valuation company, Vineyard, had

used valuation methods and reasoning consistent with those used in the 2011

and 2012 valuations as required by the CVR, Crossett’s stock value in 2013

would have been $134 per share rather than the $174 per share as designated

in the 2013 valuation. Id. at 29.

     In reviewing a trial court’s determination regarding a motion to enforce

settlement agreements, this Court has held:

     [t]he enforceability of settlement agreements is determined
     according to principles of contract law.          Because contract
     interpretation is a question of law, this Court is not bound by the
     trial court’s interpretation. Our standard of review over questions
     of law is de novo and to the extent necessary, the scope of our
     review is plenary as the appellate court may review the entire
     record in making its decision. With respect to factual conclusions,
     we may reverse the trial court only if its findings of fact are
     predicated on an error of law or are unsupported by competent
     evidence in the record.

                                     -9-
J-A26017-18

Step Plan Serv.’s, Inc. v. Koresko, 12 A.3d 401, 408 (Pa. Super. 2010)

(internal quotations and citations omitted). “Where a settlement agreement

contains all of the requisites for a valid contract, a court must enforce the

terms of the agreement.” Id. at 409.

      This Court has explained the following with regard to interpretation of

contracts:

            When interpreting the language of a contract, the intention
      of the parties is a paramount consideration. In determining the
      intent of the parties to a written agreement, the court looks to
      what they have clearly expressed, for the law does not assume
      that the language of the contract was chosen carelessly.

            When interpreting agreements containing clear and
      unambiguous terms, we need only examine the writing itself to
      give effect to the parties’ intent. The language of a contract is
      unambiguous if we can determine its meaning without any guide
      other than a knowledge of the simple facts on which, from the
      nature of the language in general, its meaning depends. When
      terms in a contract are not defined, we must construe the words
      in accordance with their natural, plain, and ordinary meaning. As
      the parties have the right to make their own contract, we will not
      modify the plain meaning of the words under the guise of
      interpretation or give the language a construction in conflict with
      the accepted meaning of the language used.

            On the contrary, the terms of a contract are ambiguous if
      the terms are reasonably or fairly susceptible of different
      constructions and are capable of being understood in more than
      one sense. Additionally, we will determine that the language is
      ambiguous if the language is obscure in meaning through
      indefiniteness of expression or has a double meaning. Where the
      language of the contract is ambiguous, the provision is to be
      construed against the drafter.

In re Jerome Markowitz Trust, 71 A.3d 289, 301 (Pa. Super. 2013)

(citation omitted).

                                    - 10 -
J-A26017-18

      Here, the language in the substantially identical Settlement Agreements

provides, in relevant part, as follows:

                                 Article II
                              Purchase Price
      2.1 Purchase Price.       As consideration for the Purchased
      Shares, Keddie shall: (a) at or before the Closing (as defined in
      Section 3.1) on the terms and subject to the conditions set forth
      in this Agreement, execute and deliver this Agreement and
      thereby become obligated to pay to [Smith/Gregory] the total
      purchase price (the “Purchase Price”) of [Smith: Two Hundred
      Thirty-nine   Thousand    One     Hundred    Fifty-four   Dollars
      ($239,154.00); Gregory:     One Million Six Hundred Eighteen
      Thousand Nine Hundred Sixty Dollars ($1,618,960.00)];
      determined as provided in Section 2.2 below and subject to
      subsequent adjustment as provided in Section 2.3 below; and (b)
      execute and deliver the agreements and instruments hereinafter
      specified in Section 2.4. The Purchase Price shall be paid in
      accordance with Sections 2.4 and 2.3 below.

      2.2 Determination of Purchase Price, Down Payment,
      Original Note Principal, Interest Rate, etc.

      (a) The Parties acknowledge and agree: (i) that the Purchase
      Price recited in Section 2.1 above has been determined to equal
      the “[Net] Unadjusted Price” . . .of the following formula (the
      “Formula”), (ii) the Down Payment recited in Section 2.4(a) below
      has been determined to equal the “5% Down Payment” set forth
      [in] the Formula, (iii) the Original Principal Amount of the
      [Smith/Gregory] Secured Promissory Note has been determined
      to equal the “balance of the Purchase Price” set forth [in] the
      Formula, and (iv) the regular monthly installments of principal due
      under the [Smith/Gregory] Secured Promissory Note have been
      determined to equal said balance of the Purchase Price divided by
      thirty-six (36) as set forth [in] the Formula.

                                    ***

      2.3 Adjustment of the Purchase Price, Down Payment etc.
      The Parties acknowledge and agree that the Purchase Price, Down
      Payment, Original Principal Amount of the [Smith/Gregory]
      Secured Promissory Note and the regular monthly installments of
      principal due under that Note are subject once to adjustment,

                                     - 11 -
J-A26017-18

      upward or downward, based upon the final per-share valuation,
      for the calendar year ended December 31, 2013, of the shares of
      common stock of the Company held by the Company’s ESOP.
      More particularly, Vineyard Group, LLC has been and shall
      be engaged by Crossett to perform, substantially in
      accordance with the procedures, methods and reasoning
      used by Vineyard for its 2011 and 2012 ESOP share
      valuations, a valuation of the outstanding shares of
      common stock of Crossett on a per-share, minority, non-
      marketable basis for ESOP purposes (the “2013 Per-Share
      Value”) and to render a written “Report” setting forth
      Vineyard’s analysis and conclusion, inter alia, as to the
      2013 Per-Share Value.            Notwithstanding any purported
      limitation set forth in the Report on the use of the conclusion as
      to the 2013 Per-Share Valued, the Parties agree that if the 2013
      Per-Share Value concluded by Vineyard varies from the $138.00
      per-share value used in Line 1 of the Formula set forth in Section
      2.2(a) above, then for purposes of this Agreement:

            (1) The Purchase Price, Down Payment, Original
            Principal Amount of the [Smith/Gregory] Secured
            Promissory Note and regular monthly principal
            installments will all be recalculated by Keddie (who
            shall give written notice of such recalculation . . . to
            the other Parties and provide the replacement
            instruments described below): substituting the 2013
            Per-Share Value into Line 1 of the Formula and
            calculating the new amounts of the entries on [the
            related Lines.]

Smith/Gregory    Settlement    Agreements,    Article   2,   Paragraph   2.1-2.3

(emphases added).

      In its September 2, 2016 memorandum opinion, the trial court

comprehensively summarizes the substantial testimony regarding the process

used to determine the 2013 valuation as well as evidence presented by Keddie

challenging that process. Trial Court Opinion, 9/2/16, at 1-10. Our review

reflects that the trial court adequately and thoroughly addressed Keddie’s four

                                     - 12 -
J-A26017-18

issues and that it did not err in accepting the 2013 ESOP valuation conducted

by Vineyard, as being consistent with what was required by Article Two,

Paragraph 2.3 of the Settlement Agreements. Although we adopt the detailed

trial court’s opinion on these issues as our own, we find the following

statements by the trial court to be particularly relevant in disposing of Keddie’s

claims:

             It is significant that Paragraph 2.3 of the Settlement
      Agreements is clear that it is the ESOP valuation which is to be
      the base for any possible price adjustment for the purchase of
      shares by Keddie. There is no reference to market value nor
      purchase value. The testimony was uncontradicted that an ESOP
      share value calculation has to be conducted in accordance with
      certain professional standards set by the [American Institute of
      Certified    Public   Accountants     (“AICPA”)]    for valuation
      engagements. Litcon, in its analysis, did not adhere to the
      valuation engagement standards set by the AICPA but instead
      determined the value through the reasonable buyer and willing
      seller approach. The Vineyard calculation was accepted by the
      independent accounting firm, BDO USA, LLP which found it to be
      in compliance with standards necessary for the filing of the IRS
      5500 notice. The Trustee, Northwest Savings Bank, also accepted
      the Vineyard valuation and paid plan participants the share value
      set forth in the valuation for the 2013 distributions.

             In his argument that Vineyard did not perform its valuation
      “substantially in accordance with the procedures, methods and
      reasoning used by Vineyard for its 2011 and 2012 ESOP share
      valuations”, Keddie points out that five valuation methods and
      weightings were used in the draft report of Vineyard and four were
      used in the final report from Vineyard but that in the 2012 report,
      all five methods were used. However, in the 2011 valuation only
      one of the five methods was used. Testimony was clear that the
      evaluation is not a figure that can be calculated by pure
      mathematics. Instead, it necessarily involves a judgment call as
      to the relative weight to be given to various factors and as to the
      methods that will be compatible with the situation in which the
      company finds itself as of a particular date. It appears clear that
      Keddie would have known this because he had examined both the

                                     - 13 -
J-A26017-18

     2011 report and the 2012 report and realized that the former had
     utilized only one valuation method, Net Asset Value, while the
     latter used five and yet he signed the Settlement Agreement which
     clearly paired the two valuations as being substantially in accord.
     From year to year Vineyard had to analyze the methods which
     would be applicable under the situation existing at the time. This
     was done in the 2013 valuation and, in fact, when Keddie disputed
     the valuation in the draft report which included all five methods,
     Vineyard then issued the final report omitting the discounted cash
     flow method. Yet, it did not result in any change in the final
     conclusion, i.e. that the shares were worth each $174.00. Keddie
     interprets this as being an evasive move by Vineyard to avoid
     using the Corporation’s projections and the delayed capital
     expenditures. Vineyard counters that it omitted the discounted
     cash flow method because of the unreliability of the projections.

                                      ***

     There was no dispute among experts that the determination of
     what methods to use in any given year on any given corporation
     is a matter of judgment and that an evaluator may select one or
     more or all of five methods and his decision could not be rejected
     on the basis of that election alone so long as he would abide by
     the AIPCA standards for determining value of ESOP shares. The
     valuation cannot be compared to an evaluation of market value or
     what Dowd referred to as what a “reasonable investor” would use
     in deciding upon a prospective investment. Keddie, with his
     business background and education would know when signing the
     Settlement Agreements that there is a subjectivity to ESOP
     valuations and, in fact, any valuations, and that reasonable,
     competent, experienced evaluators could disagree.         Keddie’s
     experts also testified as to the individual professional judgment
     and reasoning that goes into a valuation. Clearly, it is not a
     mathematical computation.

                                     ***

     [T]he [c]ourt finds that the language of Paragraph 2.3 was chosen
     carefully by [Keddie], that, to a knowledgeable person such as
     Keddie, the language was clear and unambiguous and that the
     agreement has to be enforced in accordance with the terms used.
     Under those terms understood by Keddie, the valuation was to be
     determined by Vineyard with whom both parties were familiar,
     who knew the Corporation and its history and the parties involved
     and about whom there is no evidence that its evaluators would

                                   - 14 -
J-A26017-18

      have a reason to favor one party over the other. The valuation
      was performed substantially in accord with the 2011 and 2012
      valuations.

             Whether the valuation correct[l]y reflects market value,
      what a willing buyer would pay to a willing seller, is not the issue.
      This [c]ourt cannot compare Vineyard and Litcon reports and
      decide which is more likely to reflect the true value of the Crossett
      shares. The [c]ourt cannot insert into the Settlement Agreements
      a clause which would provide for either a market value valuation
      or an alternate arbiter of value nor can the [c]ourt modify the
      contract to provide that the ESOP valuation is not the
      determinative factor. In fact, if the [c]ourt ruled that the ESOP
      value set by Vineyard, reported as accurate to the IRS by the
      Corporation and Keddie, accepted by BDO and acted upon by the
      Trustee, Northwest Savings Bank in its issuance of payment for
      shares, would be invalid, the consequences would be disastrous
      and any remedy impossible. The [c]ourt cannot rule on the
      valuation of Crossett shares with no resultant effect on the ESOP
      shares because the figure to be established for the Crossett shares
      being sold from Gregory to Keddie is intrinsically tied into the
      ESOP share valuation. An ESOP evaluation is one that is required
      for a very specific purpose and has to abide by certain set
      standards set by regulations. It was never meant to be used for
      a market valuation but only to determine what ESOP shareholders
      were to receive for shares to be turned in. Despite it not ever
      having been intended to be used to determine the price of shares
      on the market, Paragraph 2.3 of the Settlement Agreements at
      issue provides that it is to be the standard for the purposes of the
      meeting of the minds between Keddie and Gregory and Smith in
      their unique transaction. That was the explicit, unambiguous
      decision of the parties to the agreement. It is not ambiguous, just
      ill-conceived in that it would necessarily expose the parties to a
      risk that they chose to accept.

Trial Court Opinion, 9/2/16, at 6-10.

      Thus, the parties unambiguously agreed in the Settlement Agreements

that the 2013 ESOP valuation would determine the price per share. Moreover,

the 2013 valuation prepared by Vineyard was conducted “substantially in

accordance with the procedures, methods and reasoning used by Vineyard for

                                     - 15 -
J-A26017-18

its 2011 and 2012 ESOP share valuations.”             Smith/Gregory Settlement

Agreements, 5/1/14, Article II, Paragraph 2.3. As noted by the trial court,

testimony established that an ESOP share valuation must be conducted in

accordance with certain professional standards and may vary from year to

year, requiring utilization of professional judgment.            The 2011 and 2012

valuations were not determined utilizing identical methods and reasoning, but

were   made    based    on   professional   standards       by   individuals   utilizing

professional judgment. By agreeing to the language in Paragraph 2.3 of the

Settlement Agreements that the 2013 ESOP valuation would be calculated in

the same manner as previous years, Keddie indicated his acknowledgment of

and acquiescence to this process. Furthermore, the LitCon analysis did not

adhere to the valuation standards; instead it improperly determined the value

through a reasonable-buyer and willing-seller approach.

       Thus, the trial court did not err in concluding that, pursuant to the

language of Paragraph 2.3, the parties unambiguously agreed to use the 2013

ESOP valuation prepared by Vineyard in determining price per share for

purposes of the buyout. Further, the trial court did not err in concluding that

the 2013 ESOP valuation as prepared by Vineyard was consistent with the

language provided in Paragraph 2.3 of the Settlement Agreements. Therefore,

Keddie is entitled to no relief on his first four issues.

       Keddie next argues that the trial court erred when it awarded attorneys’

fees and costs to Smith and Gregory. Keddie’s Brief at 41. Keddie again

                                       - 16 -
J-A26017-18

asserts that the trial court erred in finding that the 2013 valuation met the

requirements of the CVR, and thus, it was error to award attorneys’ fees and

costs to Appellees on this basis. Id. Keddie further contends that the trial

court erred by not performing the required lodestar calculation to determine

the reasonableness of the fees and costs claimed by Appellees. Id. at 42.

Specifically, Keddie maintains that the trial court erred in conducting the

lodestar analysis and

      failed to address the most important questions: was [Appellees’]
      request for payment of over 652 hours of attorney time, at
      hourly rates that significantly exceeded the applicable local rates,
      reasonable for a motion to enforce a settlement agreement that
      involved very limited discovery (only one deposition) and limited
      hearing time?

Id. at 42-43 (emphasis in original). Keddie asserts that had the trial court

properly applied the lodestar analysis it would have reached the conclusion

that Appellees’ attorneys’ fees and expenses are grossly excessive and

unreasonable, even at the slightly reduced total amount of $255,009.96. Id.

at 43. Thus, Keddie maintains that even if the trial court’s finding that the

final 2013 valuation met the CVR is upheld, the court’s award of attorneys’

fees should be reversed and the trial court directed to apply the lodestar

analysis to determine reasonable attorneys’ fees and costs. Id.

      We previously determined that the trial court did not err in concluding

that the final 2013 ESOP valuation met the criteria set forth in the CVR. Thus,

Keddie’s claim that Smith and Gregory are not entitled to attorneys’ fees and

                                     - 17 -
J-A26017-18

costs because the trial court erred in concluding that the 2013 valuation met

the language outlined in the Settlement Agreements is without merit.

      “Appellate review of an order of a tribunal awarding counsel fees to a

litigant is limited solely to determining whether the tribunal palpably abused

its discretion in making the fee award.” Braun v. Wal-Mart Stores, Inc.,

24 A.3d 875, 974 (Pa. Super. 2011).            In general, “the manner by which

attorneys’ fees are determined in this Commonwealth, under fee-shifting

provisions, is the lodestar approach.” Krishnan v. Cutler Group, Inc., 171
A.3d 856, 903 (Pa. Super. 2017) (citing Krebs v. United Refining Co. of

Pennsylvania, 893 A.2d 776, 792–793 (Pa. Super. 2006)). The lodestar is

the product of “the number of hours reasonably expended on the litigation

times a reasonable hourly rate.” Id. The lodestar is “strongly presumed to

yield a reasonable fee.” Logan v. Marks, 704 A.2d 671, 674 (Pa. Super.

1997). A court has the discretion to adjust the lodestar fee in light of the

degree of success, the potential public benefit achieved, and the potential

inadequacy of the private fee arrangement. Id. Further, the lodestar “should

be reduced in proportion to time spent on distinct claims which do not produce

finding of liability. After finalizing the lodestar, the court may then apply a

multiplier, i.e., enhancement.”     Braun, 24 A.3d at 975 (internal citation

omitted).

      In its December 1, 2017 opinion, the trial court thoroughly addressed

this issue. As stated by the trial court, it:

                                      - 18 -
J-A26017-18

       reviewed each and every fee, cost, expense or other sum claimed
       by [Appellees] to determine whether it is appropriate for inclusion
       in an award. With respect to claims that are supported by
       documents in the nature of itemized bills or invoices, the [c]ourt
       has reviewed each and every line item and considered the
       propriety of each item. In so doing, the [c]ourt’s touchstone was
       the law . . . , and the [c]ourt scrutinized the nature of the work,
       the amount of billable hours expended, the rates charges, and the
       individual performing the work, as well as any other
       considerations specific to a particular claim.

Trial Court Opinion, 12/1/17, at 5.

       The trial court determined that Appellees’ counsel’s hourly rate was

reasonable. The trial court explained:

       [T]he [c]ourt finds that the legal work done by Attorney [Vicki
       Kuftic] Horne was complex. This is consistent with not only her
       own testimony but also the testimony of Attorney John Quinn, Jr.
       who was called as an expert on behalf of [Appellees]. Mr. Quinn
       also corroborated Attorney Horne’s testimony that her hourly rate
       is relatively low for the sort of complex litigation she performed.
       The [c]ourt gives considerable weight to Mr. Quinn’s opinion that
       Attorney Horne’s hourly rate is reasonable. Mr. Quinn has been a
       litigator for many years in many courts, and he is the chief of the
       litigation department at the firm of Quinn, Buseck, Leemhuis,
       Toohey, & Kroto, Inc., which has its offices in Erie County.
       Litigators from this firm often appear before this [c]ourt.

              [Keddie] presented evidence that attorneys with offices in
       Warren County typically charge a significantly lower hourly rate
       for a given case than that rate charged by Attorney Horne for her
       work on the instant case. [Keddie] would have the [c]ourt find
       that his simplistic comparison is dispositive. However, the [c]ourt
       finds that the nature of the legal work done and the skill and
       standing of Attorney Horne, as discussed above,[4] justify the
____________________________________________

4  In addressing the qualifications of Attorney Horne, the trial court, earlier in
its opinion, stated the following: “The instant case involves complex litigation
over corporate share valuation techniques. Attorney Horne is highly qualified
for such work. This is evidenced by her curriculum vitae, including her

                                          - 19 -
J-A26017-18

       difference. This is especially true in hindsight when one considers
       that Attorney Horne achieved a successful result.

Trial Court Opinion, 12/1/17, at 4-5.

       Furthermore, the trial court reviewed the number of hours expended on

the litigation to determine whether that number was reasonable. The trial

court identified specific line items for attorneys’ fees that it deemed

unreasonable. Trial Court Opinion, 12/1/17, at 7-12. The total award for

attorneys’ fees was reduced by these findings. Next, the trial court found that

all of the costs and expenses, as distinguished from attorneys’ fees, requested

by Appellees were reasonable and appropriate for inclusion in the overall

award. Thus, we conclude that the trial court’s analysis was consistent with

the lodestar calculation and that it did not abuse its discretion in determining

that award. Keddie’s contention that the trial court erred by not applying the

lodestar analysis when determining the reasonableness of Appellees’ request

for attorneys’ fees and expenses lacks merit.

       Order affirmed.

____________________________________________

membership in the Academy of Trial Attorneys of Allegheny County and
service as president of that organization.” Id. at 3.

                                          - 20 -
J-A26017-18

Judgment Entered.

Joseph D. Seletyn, Esq.
Prothonotary

Date: 2/8/2019

                          - 21 -