Tapco Europe v. Red Square Corp. ( 2015 )

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NON-PRECEDENTIAL DECISION – SEE SUPERIOR COURT I.O.P. 65.37
TAPCO EUROPE LIMITED : IN THE SUPERIOR COURT OF
: PENNSYLVANIA
v. :
:
RED SQUARE CORPORATION, :
NOMAD BRANDS, INC., AND :
MICHAEL KWADRAT :
:
APPEAL OF: RED SQUARE :
CORPORATION, : No. 497 WDA 2014
:
Appellant :
Appeal from the Order Entered March 20, 2014,
in the Court of Common Pleas of Allegheny County
Civil Division at No. G.D. No. 13-21308
BEFORE: FORD ELLIOTT, P.J.E., PANELLA AND OLSON, JJ.
MEMORANDUM BY FORD ELLIOTT, P.J.E.: FILED APRIL 17, 2015
Red Square Corporation appeals from the order of March 20, 2014,
granting plaintiff/appellee, Tapco Europe Limited’s (“Tapco”) motion for
judgment on admissions and denying Red Square’s motion to withdraw
admissions. We affirm.1
Tapco sells building materials to Red Square. According to the
complaint, Red Square accepted shipment of goods in March and April 2013
1
On March 21, 2014, Tapco discontinued the case as to defendants
Nomad Brands, Inc. and Michael Kwadrat. Therefore, the order entering
judgment upon admissions against Red Square became a final order
disposing of all claims and parties and is appealable. Pa.R.A.P. 341(b).
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but failed to pay the invoices, totaling $155,011. Tapco filed a complaint on
November 7, 2013, and served Red Square and the other named defendants
with its first request for admissions on November 13, 2013. Red Square
failed to respond, and on March 9, 2014, Tapco filed a motion to enter
judgment upon admissions. Following a hearing, the Honorable Judith L.A.
Friedman granted the motion on March 20, 2014. Red Square filed a motion
for reconsideration on March 25, 2014, and notice of appeal on March 28,
2014. Attached to Red Square’s motion for reconsideration were its
proposed responses to Tapco’s request for admissions. Following a hearing
on April 22, 2014, Red Square’s motion for reconsideration was denied.
Red Square complied with Pa.R.A.P., Rule 1925(b), 42 Pa.C.S.A., and the
trial court has filed an opinion.
Red Square has raised the following issue for this court’s review:
I. Whether the trial court erred as a matter of
law or abused its discretion by denying
Appellant’s Motion to Withdraw Admissions
under Pa.R.Civ.P. 4014(d)[?]
Red Square’s brief at 4.
Rule 4014 governs requests for admissions. It
permits a party to serve upon another party a
written request for the admission of the truth of
certain matters relating to statements or opinions of
fact or the application of the law to fact.
Pa.R.C.P. 4014(a). This includes questions regarding
the execution, correctness, genuineness,
authenticity, signing, delivery, mailing, or receipt of
any document described in the request for
admissions. Id. “The purpose of this discovery tool
is to clarify and simplify the issues raised in prior
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pleadings in order to expedite the litigation process.”
Christian v. Pennsylvania Fin. Responsibility
Assigned Claims Plan, 454 Pa.Super. 512, 686
A.2d 1, 5 (1996) (citation omitted), appeal denied,
548 Pa. 678, 699 A.2d 733 (1997). Unless the party
responds to the request within 30 days (45 days for
a defendant), the matter is deemed admitted.
Pa.R.C.P. 4014(b). The trial court may extend or
shorten the timeframe in which the responding party
has to answer the request. Id.
Estate of Borst v. Edward Stover Sr. Testamentary Trust, 30 A.3d
1207, 1210 (Pa.Super. 2011).
Rule 4014 provides, in its entirety, as follows:
Rule 4014. Request for Admission
(a) A party may serve upon any other party a
written request for the admission, for purposes
of the pending action only, of the truth of any
matters within the scope of Rules 4003.1
through 4003.5 inclusive set forth in the
request that relate to statements or opinions of
fact or of the application of law to fact,
including the genuineness, authenticity,
correctness, execution, signing, delivery,
mailing or receipt of any document described
in the request. Copies of documents shall be
served with the request unless they have been
or are otherwise furnished or available for
inspection and copying in the county. The
request may, without leave of court, be served
upon the plaintiff after commencement of the
action and upon any other party with or after
service of the original process upon that party.
Note: This Subdivision has been amended so
that its content will conform more closely to
the content of the first sentence of
F.R.Civ.P. 36(a).
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(b) Each matter of which an admission is
requested shall be separately set forth. The
matter is admitted unless, within thirty days
after service of the request, or within such
shorter or longer time as the court may allow,
the party to whom the request is directed
serves upon the party requesting the
admission an answer verified by the party or
an objection, signed by the party or by the
party’s attorney; but, unless the court shortens
the time, a defendant shall not be required to
serve answers or objections before the
expiration of forty-five days after service of the
original process upon him or her. If objection
is made, the reasons therefor shall be stated.
The answer shall admit or deny the matter or
set forth in detail the reasons why the
answering party cannot truthfully do so. A
denial shall fairly meet the substance of the
requested admission, and when good faith
requires that a party qualify the answer or
deny only a part of the matter of which an
admission is requested, the party shall specify
so much of it as is true and qualify or deny the
remainder. An answering party may not give
lack of information or knowledge as a reason
for failure to admit or deny unless the
answering party states that he or she has
made reasonable inquiry and that the
information known or readily obtainable by him
or her is insufficient to enable him or her to
admit or deny. A party who considers that a
matter of which an admission has been
requested presents a genuine issue for trial
may not, on that ground alone, object to the
request. That party may, subject to the
provisions of Rule 4019(d), deny the matter or
set forth reasons why he or she cannot admit
or deny it.
Note: The requirements of an answer are
governed by this rule and not by Rule 1029(b).
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(c) The party who has requested the admission
may move to determine the sufficiency of the
answer or objection. Unless the court
determines that an objection is justified, it
shall order that an answer be served. If the
court determines that an answer does not
comply with the requirements of this rule, it
may order either that the matter is admitted or
that an amended answer be served. The court
may, in lieu of these orders, determine that
final disposition of the request be made at a
pre-trial conference or at a designated time
prior to trial.
(d) Any matter admitted under this rule is
conclusively established unless the court on
motion permits withdrawal or amendment of
the admission. Subject to the provisions of
Rule 212.3 governing pre-trial conferences, the
court may permit withdrawal or amendment
when the presentation of the merits of the
action will be subserved thereby and the party
who obtained the admission fails to satisfy the
court that withdrawal or amendment will
prejudice him or her in maintaining the action
or defense on the merits. Any admission by a
party under this rule is for the purpose of the
pending action only and is not an admission by
the party for any other purpose nor may it be
used against the party in any other
proceeding.
Pa.R.C.P., Rule 4014, 42 Pa.C.S.A.
A party on whom requests for admissions of fact are
served runs the risk that the facts as set forth in the
request for admissions will be conclusively binding
on him if he chooses not to file an answer to the
request for admissions or file objections to the
request.
Innovate, Inc. v. United Parcel Service, Inc., 418 A.2d 720, 723
(Pa.Super. 1980). “The rule clearly states that the party receiving the
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request must respond by answering or objecting.” Richard T. Byrnes Co.,
Inc. v. Buss Automation, Inc., 609 A.2d 1360, 1367 (Pa.Super. 1992).
Withdrawal of admissions should be granted where
upholding the admission would practically eliminate
any presentation of the merits of the case; where
withdrawal would prevent manifest injustice; and
where the party who obtained the admissions failed
to prove that withdrawal would result in prejudice to
that party. Westmoreland v. Triumph
Motorcycle Corp., 71 F.R.D. 192 (D.Conn.1976).
The test of prejudice turns on whether a party
opposing the withdrawal is rendered less able to
obtain the evidence required to prove the matters
which had been admitted. Teleprompter of Erie,
Inc. v. City of Erie, 567 F. Supp. 1277
(W.D.Pa.1983); Rabil v. Swafford, 128 F.R.D. 1
(D.D.C.1989).
Dwight v. Girard Medical Center, 623 A.2d 913, 916 (Pa.Cmwlth. 1993)
(footnote omitted).
Furthermore, if the subject matter of the admissions
is broad and far-reaching, a court should permit
withdrawal in the absence of bad faith or substantial
prejudice. Teleprompter of Erie, Inc.; Szatanek
v. McDonnell Douglas Corp., 109 F.R.D. 37
(W.D.N.Y.1985). Moreover, requests for admissions
must call for matters of fact rather than legal
opinions and conclusions. California v. The Jules
Fribourg, 19 F.R.D. 432 (N.D.Cal.1955). Since
conclusions of law are not within the permissible
scope of requests for admissions under Rule 4014,
those statements in the requests for admissions
which constitute conclusions of law are not properly
before the court. Commonwealth v. Diamond
Shamrock Chemical Co., 38 Pa.Commonwealth Ct.
89, 391 A.2d 1333 (1978).
Id.
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The record reflects that Red Square was properly served with both the
complaint and the request for admissions, yet failed to file an answer or
objections as required by the rule. Under Rule 4014(b), Red Square had
45 days to respond. Tapco waited approximately four months before filing
its motion to enter judgment upon admissions.
It is clear from Michael Kwadrat’s (“Kwadrat”) deposition that he was
served with the request for admissions but failed to turn it over to his
attorney. (Kwadrat deposition, 2/11/14 at 48-49, 51-52.) Kwadrat testified
that he travels frequently and the request for admissions likely sat unopened
in his office along with other mail. (Id. at 17, 51.)2 Kwadrat testified to
receiving a “ream of documents.” (Id. at 41.) As the trial court states, “The
deposition of Mr. Kwadrat made it clear that he received the Request for
Admissions and sat on it.” (Trial court opinion, 8/6/14 at 2.) While
Judge Friedman did not find that Kwadrat acted in bad faith, he was at least
negligent in failing to forward the documents to counsel:
No. Bad faith doesn’t matter. What I’m saying is
your client did, in fact, by his own admission, I didn’t
say this, at his deposition. He says he got a
document. There was one thing sent to him. So
whatever he did with it, I don’t know. And you don’t
know. Your client maybe forgot what he did with it.
But he got it. Okay. It was received. And the rule
is pretty clear.
2
Kwadrat is the president, as well as the sole officer and shareholder, of
Red Square. (Id. at 6.) Kwadrat is also the sole shareholder, officer, and
director of Nomad Brands, Inc. (Id. at 46.)
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Notes of testimony, 4/22/14 at 30.
More importantly, when Red Square finally submitted proposed
responses to Tapco’s request for admissions, attached to its motion for
reconsideration, it admitted that the goods identified on the invoices were
delivered, received, and accepted. Red Square also admitted in part that
the invoices remained unpaid in the amounts stated, responding with regard
to each invoice: “It is admitted that there is an unpaid invoice. Defendants
deny any obligation to pay said invoice.”
In response to requests 4 and 5, which state, “Kindly admit that you
never disputed your obligation to pay the attached invoices,” and “Kindly
admit that you never disputed the accuracy of the attached invoices,”
Red Square responds:
Defendant Red Square has been in ongoing
discussions with Plaintiff about Plaintiff’s
malfeasance, breach of contract and damage done to
Defendant Red Square[’s] business. Said breach and
repudiation prior to the shipped orders and
subsequent dispute with Plaintiff’s counsel as to
Defendant Red Square’s obligation as well as
Plaintiff’s obligation have been the source of dispute
since early 2013.
Red Square does not elaborate or explain why, if there was an anticipatory
breach, it accepted the goods.
Rule 4014(b) states,
The answer shall admit or deny the matter or set
forth in detail the reasons why the answering party
cannot truthfully do so. A denial shall fairly meet the
substance of the requested admission, and when
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good faith requires that a party qualify the answer or
deny only a part of the matter of which an admission
is requested, the party shall specify so much of it as
is true and qualify or deny the remainder.
Red Square’s general, non-specific denial of any obligation to pay the
invoices is insufficient. It not only lacks detail, but Red Square admits that
(1) the ordered goods were delivered, received, and accepted; and (2) the
invoices remain unpaid in the amounts stated in the complaint. Therefore,
even if the trial court were to permit Red Square’s proposed responses, they
are mostly admissions. Red Square admits receiving and accepting all goods
delivered by Tapco, as stated on the invoices. Furthermore, as the trial
court remarks, “Red Square also implicitly admits the balances due on the
various invoices by failing to state why it has no obligation to pay each
invoice. These general denials violate Rule 4014(b) which states in pertinent
part ‘A denial shall fairly meet the substance of the requested admission.’”
(Trial court opinion, 8/6/14 at 2-3 (emphasis in original).)
Additionally, we agree with the trial court that Red Square’s
unsupported and vague allegations of malfeasance and breach of contract
are inadequate to “meet the substance” of the requested admissions. (Id.
at 3.) Red Square does not specify how Tapco was in breach of contract, or
how its alleged malfeasance caused damage to Red Square’s business.
Notably, Red Square alleged there had been an ongoing dispute since early
2013, yet it was still unable to articulate the nature of the dispute more than
a year later. As the trial court observes,
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These virtually identical responses leave the neutral
reader without a clue as to what Red Square is
talking about. The alleged malfeasance is not
specified; the alleged breach by Plaintiff is not
specified; the alleged damage to Red Square’s
business is not specified; the alleged repudiation is
not only unspecified, it appears out of thin air.
Id.
Red Square was properly served with Tapco’s request for admissions,
yet “sat on it” for over four months. Red Square did not submit any
proposed responses to Tapco’s request until March 25, 2014, when it filed a
motion for reconsideration of the order entering judgment. Even then, its
proposed responses are mostly either admissions or vague, general denials
and unspecified allegations. We agree with the trial court that Tapco has
been substantially prejudiced by Red Square’s dilatory conduct. (Id. at
3-4.) The trial court did not abuse its discretion in refusing to permit
Red Square to withdraw its admissions and file an answer.
Order affirmed.
Judgment Entered.
Joseph D. Seletyn, Esq.
Prothonotary
Date: 4/17/2015
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