J. Spinola, d/b/a Hillcrest Architecture v. P. Kelley Waste Not Technologies, LLC, jointly and severally ( 2016 )


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  •         IN THE COMMONWEALTH COURT OF PENNSYLVANIA
    James Spinola,                          :
    d/b/a/ Hillcrest Architecture,          :
    Appellant           :
    :
    v.                   : No. 2120 C.D. 2015
    : Submitted: April 22, 2016
    Patrick Kelley;                         :
    Waste Not Technologies, LLC,            :
    jointly and severally                   :
    BEFORE:      HONORABLE P. KEVIN BROBSON, Judge
    HONORABLE MICHAEL H. WOJCIK, Judge
    HONORABLE JAMES GARDNER COLINS, Senior Judge
    OPINION NOT REPORTED
    MEMORANDUM OPINION BY
    SENIOR JUDGE COLINS                                FILED: September 21, 2016
    James Spinola, d/b/a Hillcrest Architecture (Appellant), appeals, pro
    se, from the order of the Court of Common Pleas of Monroe County that sustained
    the preliminary objections filed by Patrick Kelley and Waste Not Technologies,
    LLC (collectively, Appellees) and dismissed the third amended complaint filed by
    Appellant on the grounds that the complaint failed to state a breach of contract
    claim. We affirm the trial court’s dismissal of Appellant’s breach of contract
    claim, however we remand for consideration of Appellees’ preliminary objections
    as they relate to the first two counts of Appellant’s third amended complaint,
    which assert claims based upon the doctrines of promissory estoppel, quantum
    meruit and unjust enrichment.1
    According to the allegations in Appellant’s Third Amended
    Complaint, Kelley first contacted Appellant on November 29, 2011 for an estimate
    for the architectural design of a building for Appellees that was to be funded
    through a state grant. (Third Amended Complaint ¶¶5, 29.) Appellant began
    performing pre-design services that could be included in the application for the
    state grant and sent Kelley an estimate on December 1, 2011. (Id. ¶¶6, 30, 31, Ex.
    G.) Having not heard from Kelley in over one year, Appellant followed up in
    January 2013 to inquire about the status of the project and Kelley responded that
    he expected the design phase to begin that spring and he would keep Appellant
    posted. (Id. ¶¶7-8.) On June 17, 2013, Appellant visited and toured the project site
    at Kelley’s request. (Id. ¶¶9-10.) Appellant sent Kelley a five-page proposed
    contract for professional architectural services on July 8, 2013, and Kelley
    responded on July 15, 2013 with three pages of changes to the proposed contract.
    (Id. ¶¶11-12, Ex. A.) Following his attorney’s review, Appellant sent an email on
    July 19, 2013 responding to each of Kelley’s proposed modifications to the
    original contract and discussing the scheduling challenges in completing the design
    work in five weeks as Kelley requested. (Id. ¶13, Ex. A.) Appellant concluded
    this email by stating: “We can schedule a start date for your project immediately
    and are anxious to proceed. If the above explanations are acceptable, please reply
    1
    The appeal in this action is not within the jurisdiction of this Court and should have instead
    been filed in the Superior Court. See 42 Pa. C.S. § 762(a) (listing the categories of exclusive
    jurisdiction of the Commonwealth Court in appeals from final orders of the courts of common
    pleas). However, because no party has filed a timely objection to jurisdiction, this Court can
    hear this matter, as jurisdiction has been “perfected” pursuant to Section 704 of the Judicial
    Code, 42 Pa. C.S. § 704.
    2
    back and we will revise the Proposal accordingly and have it to you Monday.” (Id.
    Ex. A.)
    On July 21, 2013, Kelley sent an email to Appellant in which he
    stated:
    Hi Jim,
    Thank you for your reply. You may begin work immediately.
    However, there will be some changes to the scope.
    I would like you to work on the following topics as they are
    described in your latest email:
    Schematic Design
    Design Development
    Construction Documents
    I will assume responsibility for the following topics as they are
    described in your latest email:
    Bidding/Negotiations
    Construction Administration
    Please email to me a new contract reflecting the changes from
    the original contract. I will sign it and return it to you along
    with a check in the amount of $2,000.00. I will advise you if I
    feel the need to the have the project timetable accelerated.
    Thank you.
    Best regards,
    Pat
    (Id. ¶14, Ex. A)
    Appellant alleges that he began working immediately after receiving
    this email and mailed a revised contract to Kelley. (Id. ¶15, Ex. E.) On July 23,
    2013, Kelley sent Appellant an email in which he stated:
    Jim,
    I have received your latest proposal. This proposal is not
    acceptable to me. You still have not indicated when this work
    will be completed. If I sign this contract, you would be within
    3
    your rights to perform the work at any time in the future (two
    years, three years or more from now.) Also, you have still
    included within your scope of work the advertisement for
    bidding, instructions to bidders, a bid bond form, prevailing
    wage rates, contractor’s qualifications statement, performance
    and payment of bond references, insurance requirements and
    General and Supplementary Conditions of the Contract. I
    indicated to you in my recent email that I would perform these
    tasks. In addition you have increased your price. All of this is
    unacceptable to me. I will use another architect. Thank you.
    Best regards,
    Pat Kelley
    (Id. ¶16, Ex. E.) Appellant contacted Kelley several times to discuss resuming
    their professional relationship; after not receiving any response, Appellant sent
    Kelley an invoice for services rendered on October 1, 2013 in the amount of
    $1,170.    (Id. ¶¶18-19, Ex. C.)         Kelley did not remit payment in response to
    Appellant’s invoice. (Id. ¶¶20-22.)
    On October 3, 2014, Appellant filed a civil action in the Magisterial
    District Court of Monroe County against Appellees and a judgment was issued in
    Appellant’s favor in the amount of $3,930.50, which Appellees appealed to the
    trial court. In his third amended complaint,2 Appellant brings three causes of
    action. In Count I, Appellant seeks damages in the amount of $1,170 for the
    design work done between July 21, 2013 when Kelley stated that Appellant could
    “begin work immediately” until July 23, 2013 when Kelly stated that the terms of
    2
    Appellees filed preliminary objections to each of the three previous versions of Appellant’s
    complaint, but Appellant amended the original and first amended complaint without the trial
    court ruling on those preliminary objections. The trial court sustained Appellees’ preliminary
    objections to the second amended complaint in part, striking various paragraphs for including
    discussion of settlement talks between the parties and dismissing the third amended complaint in
    its entirety, with leave to replead, for failure to plead a breach of contract claim and failure to
    plead damages with sufficient specificity.
    4
    the latest agreement were “unacceptable.” (Id. ¶¶26-27.) In Count II, Appellant
    seeks damages of $2,500 as compensation for pre-design services that Appellant
    alleged he performed that was incorporated in Appellees’ application for a state
    grant. (Id. ¶¶28-33.) In Count III, Appellant asserts that the parties had come to a
    meeting of the minds and entered into a binding contractual relationship as of July
    21, 2013 when Kelley directed Appellant to “begin work immediately” and that
    Kelley breached this contract when he sent his July 23, 2013 email stating that the
    terms of their agreement were now “not acceptable.” (Id. ¶¶34-38.) In this count,
    Appellant seeks compensatory damages in the amount of $17,175 based upon the
    fees he would have been entitled to under the contract. (Id. ¶39.)
    Appellees filed preliminary objections in the nature of a demurrer to
    the third amended complaint in which they object on the grounds that this
    complaint failed to state a claim because it does not plead the existence of a
    contract and does not adequately explain the damages requested. In addition,
    Appellees objected on the grounds that Appellant improperly joined a request to
    enforce a subpoena to produce documents and included a request in the third
    amended complaint for oral argument related to a mediation/arbitration provision
    in the draft contracts that had been exchanged between the parties. On September
    28, 2015, the trial court issued an order sustaining the Appellees’ preliminary
    objection for failure to state a breach of contract cause of action and dismissing the
    third amended complaint. In an accompanying opinion, the trial court explained
    that Appellant did not allege the existence of a contract because Kelley’s July 21,
    2013 email that advised Appellant to “begin work immediately” was not strictly an
    acceptance of Appellant’s latest offer but instead contained additional language
    that changed the terms and scope of the contract and therefore this email was a
    5
    counter-offer. (Trial Court Opinion at 2-4.) The trial court concluded that because
    Kelley never signed the proposed agreement and Kelley’s next communication to
    Appellant on July 23, 2013 was a repudiation of Appellant’s latest draft and their
    professional relationship, there was no contract between the parties. (Id. at 4.) The
    trial court further stated that in light of its holding, it would not address Appellees’
    remaining preliminary objections. (Id.)
    On appeal to this Court, Appellant argues that Kelley’s July 21, 2013
    email constituted acceptance of the most recent proposal that Appellant had sent
    Kelley and that Kelley’s request in the July 21, 2013 email for Appellant to draft a
    new contract was simply to memorialize the terms on which the parties had agreed.
    Appellant further argues that the trial court erred in not addressing the first two
    claims based upon Appellees’ failure to pay for architectural services actually
    rendered prior to Kelley’s July 23, 2013 email because these claims are grounded
    in quasi-contract theories and do not depend on the existence of a contract.3
    A claim for breach of contract exists where the party alleging the
    breach can show (i) the existence of a contract, (ii) a breach of a duty imposed by
    that contract, and (iii) damages resulting from the breach. Fritz v. Glen Mills
    School, 
    894 A.2d 172
    , 178 (Pa. Cmwlth. 2006); Koken v. Steinberg, 
    825 A.2d 723
    ,
    729 (Pa. Cmwlth. 2003). “In order to form a contract, there must be an offer,
    3
    Our scope of review of a trial court’s decision sustaining preliminary objections in the nature of
    a demurrer is plenary, and our standard of review is de novo. Mazur v. Trinity Area School
    District, 
    961 A.2d 96
    , 101 (Pa. 2008). An appellate court may affirm a grant of preliminary
    objection in the nature of a demurrer only when, on the facts pled, it is clear and free from doubt
    that the plaintiff will be unable to prove facts legally sufficient to establish a right to relief.
    Mazur, 961 A.2d at 101; Delaware Township Board of Auditors v. Delaware Township, 
    132 A.3d 523
    , 528 (Pa. Cmwlth. 2016). When evaluating the legal sufficiency of the challenged
    pleading, we must accept as true all well-pled, material and relevant facts alleged and every
    inference fairly deducible from those alleged facts. Mazur, 961 A.2d at 101; Delaware
    Township Board of Auditors, 132 A.3d at 528.
    6
    acceptance, and consideration or a mutual meeting of the minds.” Ribarchak v.
    Municipal Authority of City of Monongahela, 
    44 A.3d 706
    , 708 (Pa. Cmwlth.
    2012).
    Upon review, we agree with the trial court that the third amended
    complaint does not state a claim for breach of contract. Kelley’s statement in his
    July 21, 2013 email that Appellant should “begin work immediately” and that he
    “will sign” a revised contract could be interpreted in isolation as a tacit acceptance
    of Appellant’s most recent proposed agreement, however, Kelley states in the very
    next sentence that he would like to make “changes to the scope” of the agreement
    and then lists the changes he would like Appellant to make. (Third Amended
    Complaint Ex. A.) Rather than an acceptance, this email viewed in its entirety
    clearly constituted a counter-offer. As our Supreme Court has explained,
    This court has long adhered to the position of 1 Restatement,
    Contracts, § 60 (1932), that “a reply to an offer, though
    purporting to accept it, which adds qualifications or requires
    performance of conditions, is not an acceptance but is a
    counter-offer.” To constitute a contract, the acceptance of the
    offer must be absolute and identical with the terms of the offer.
    Hedden v. Lupinsky, 
    176 A.2d 406
    , 408 (Pa. 1962) (citation omitted); see also
    Hatalowich v. Redevelopment Authority of Monessen, 
    312 A.2d 22
    , 24 (Pa. 1973);
    Ribarchak, 
    44 A.3d at 709
    ; Restatement (Second) of Contracts § 59 (1981).
    Rather than assenting to the terms of Appellant’s latest proposed agreement,
    Kelley’s July 21, 2013 email proposed substantially different terms and thus is
    more properly considered a counter-offer than an acceptance.
    Appellant and Kelley had also not come to a meeting of the minds
    with nothing left but to memorialize the agreement in writing. A meeting of the
    minds requires the concurrence of both parties to all the terms of the agreement;
    7
    anything less will result in a failure to execute an enforceable contract. City of
    Erie v. Fraternal Order of Police, Lodge 7, 
    977 A.2d 3
    , 12 (Pa. Cmwlth. 2009);
    Department of Transportation v. Pennsylvania Industries for the Blind and
    Handicapped, 
    886 A.2d 706
    , 713 (Pa. Cmwlth. 2005). In his July 21, 2013 email,
    Kelley removed two of the five categories of architectural services that Appellant
    had proposed to perform. (Third Amended Complaint Ex. A.) Appellant sent
    Kelley a revised agreement (Id. Ex. B), but Kelley informed Appellant in a July 23,
    2013 email that Kelley was not pleased with this new draft because Appellant had
    not removed all of the services as Kelley had requested and Appellant had
    increased the price despite the fact that he would be providing fewer services. (Id.
    Ex. E.)   Therefore, it was apparent that Kelley and Appellant were never in
    agreement on all terms of the agreement such that there could have been a meeting
    of the minds.
    However, though Appellant did not allege a breach of contract and
    Count III of the Third Amended Complaint was properly dismissed, we must
    conclude that the trial court erred by dismissing the first two claims asserted by
    Appellant. In Counts I and II, Appellant seeks payment for architectural services
    that he performed for Appellees to prepare his initial estimate, which Appellant
    alleges was included in an application for a state grant that Appellees received, and
    the services he performed after Kelley’s July 21, 2013 email when he told
    Appellant he could begin work until he received Kelley’s July 23, 2013 email in
    which Kelley stated that their agreement was unacceptable and he would hire
    another architect. (Id. ¶¶26-33.) Appellant argues that he has causes of action for
    8
    promissory estoppel, quantum meruit and unjust enrichment,4 asserting that he
    relied on Kelley’s promise that he would be awarded the full contract, that Kelley
    was enriched by a public grant in excess of $500,000 based upon Appellant’s work
    and that he had been explicitly authorized by Kelley to work in the period between
    July 21 and July 23, 2013. (Id. ¶¶27, 30, 32, 33.) Causes of action pursuant to
    promissory estoppel, quantum meruit and unjust enrichment do not depend on the
    existence of a valid, enforceable contract between the parties. See Shafer Electric
    & Construction v. Mantia, 
    96 A.3d 989
    , 996 (Pa. 2014) (“It is well-settled at
    common law...that a party shall not be barred from bringing an action based in
    quantum meruit when one sounding in breach of express contract is not
    available.”); Crouse v. Cyclops Industries, 
    745 A.2d 606
    , 610 (Pa. 2000)
    (observing that the doctrine of promissory estoppel may be invoked where the
    plaintiff relies on a promise by the defendant but there is no enforceable agreement
    between the parties because the agreement was not supported by consideration);
    Mitchell v. Moore, 
    729 A.2d 1200
    , 1203 (Pa. Super. 1999) (stating that unjust
    enrichment is an equitable doctrine where the law implies a contract between
    parties to require one party to pay another for the value of a benefit conferred
    where no express contract exists). Therefore, the trial court erred in dismissing the
    third amended complaint on the ground that no contract was entered between the
    parties.
    4
    Appellant also cited detrimental reliance in the third amended complaint, which is merely
    another name for a promissory estoppel claim. Matarazzo v. Millers Mutual Group, Inc., 
    927 A.2d 689
    , 692 (Pa. Cmwlth. 2007).
    9
    Accordingly, we reverse the trial court’s September 28, 2015 order to
    the extent it dismissed Counts I and II of the third amended complaint and remand
    for consideration of Appellees’ remaining preliminary objections.
    ____________________________________
    JAMES GARDNER COLINS, Senior Judge
    10
    IN THE COMMONWEALTH COURT OF PENNSYLVANIA
    James Spinola,                            :
    d/b/a/ Hillcrest Architecture,            :
    Appellant             :
    :
    v.                     : No. 2120 C.D. 2015
    :
    Patrick Kelley;                           :
    Waste Not Technologies, LLC,              :
    jointly and severally                     :
    ORDER
    AND NOW, this 21st day of September, 2016, it is hereby ORDERED
    that the order of the Court of Common Pleas of Monroe County is hereby
    AFFIRMED to the extent it dismissed Count III of the third amended complaint
    filed by Appellant James Spinola, d/b/a Hillcrest Architecture, and REVERSED to
    the extent it sustained the preliminary objection in the nature of a demurrer to
    Counts I and II of the third amended complaint and dismissed the third amended
    complaint in its entirety. This matter is REMANDED for consideration of the
    remaining preliminary objections filed by Appellees Patrick Kelley and Waste Not
    Technologies, LLC to Count I and Count II of the third amended complaint.
    Jurisdiction Relinquished.
    ____________________________________
    JAMES GARDNER COLINS, Senior Judge