Lavery Law v. Faherty, M. ( 2023 )


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  • J-S41016-22
    NON-PRECEDENTIAL DECISION - SEE SUPERIOR COURT I.O.P. 65.37
    LAVERY LAW, P.C.                           :   IN THE SUPERIOR COURT OF
    :        PENNSYLVANIA
    :
    v.                             :
    :
    :
    MICHAEL F. FAHERTY                         :
    :
    Appellant               :   No. 884 MDA 2022
    Appeal from the Order Entered May 25, 2022
    In the Court of Common Pleas of Dauphin County
    Civil Division at 2017-CV-01435-CV
    BEFORE:      LAZARUS, J., MURRAY, J., and STEVENS, P.J.E.*
    MEMORANDUM BY MURRAY, J.:                            FILED FEBRUARY 13, 2023
    Michael F. Flaherty (Appellant) appeals from the order sustaining the
    preliminary objections filed by plaintiff and counterclaim defendant, Lavery
    Law, P.C. (the Law Firm).1 We affirm in part and reverse and remand in part.
    This is a dispute between the Law Firm and Appellant, a former
    shareholder and attorney with the firm. In 2000, Frank Lavery, Jr. (Lavery or
    Attorney Lavery), formed the predecessor to the Law Firm when he offered
    Appellant and two other attorneys shares in his legal practice. At that time,
    ____________________________________________
    *   Former Justice specially assigned to the Superior Court.
    1 The trial court’s order indicated that immediate appeal would facilitate
    resolution of the entire case. Trial Court Order, 5/25/22; see Pa.R.A.P.
    341(c). The trial court further explained that because of the significant
    relationship between the adjudicated and unadjudicated claims, immediate
    appeal would enhance the prospects of settlement. Trial Court Order,
    5/25/22.
    J-S41016-22
    Appellant, Lavery, and the other two attorneys entered into a Restricted Stock
    Agreement. In addition, Appellant executed a separate Executive Attorney
    Employment Agreement (Employment Agreement) with Lavery and the Law
    Firm. After a fifth partner was added in December 2012, the shareholders
    executed a new Restricted Stock Agreement.
    Relevantly, Appellant’s Employment Agreement provided:
    4. COMPENSATION
    (b) INCENTIVE BONUS. To provide annual incentive to the
    Attorney and to reward his and the Corporation’s performance,
    the Board of Directors of the Corporation shall provide from time
    to time for payment of bonuses to the Attorney (the “Incentive
    Compensation Bonus”) based upon the Attorney’s and the
    Corporation’s ability to meet the agreed upon objectives set forth
    on Exhibit “A” attached hereto and made a part hereof. The
    amount of the Incentive Compensation Bonus and the
    Attorney’s and Corporation’s ability to meet the agreed
    upon objectives shall be determined by the Corporation’s
    Board of Directors and/or its President and/or its
    Managing Shareholder in its, his or their sole discretion[.]
    Complaint, Exhibit G (emphasis added). The “List of Corporate and Individual
    Attorney Goals for Bonus,” prescribed only “Billable hours of 1,500 each year.”
    Id.
    In 2014, the Law Firm had no board of directors. Lavery served as the
    Law Firm’s president and managing shareholder. The trial court explained:
    [Appellant] alleges that upon becoming a shareholder in
    2000, bonus amounts were determined by a Compensation
    Committee comprised of Attorneys Lavery and [Appellant],
    followed by full agreement and formal ratification by Attorney
    Lavery as Managing Shareholder. [Appellant] claims that between
    2001 to 2013, the bonus was paid via application of a Performance
    Appraisal System, with certain adjustments providing extra points
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    for high performance, which always resulted in a consensus of
    Lavery and [Appellant] on bonus payments and then ratification
    by Lavery as Managing Shareholder.
    In 2014, [Appellant] claimed to have achieved an extremely
    high performance rating (98 out of 100) based upon generating
    $2,618,481 of income to the law firm, a figure far exceeding any
    prior amount generated by any attorney in the firm’s history.
    [Appellant] asserted that the entire fund available as bonus
    compensation for 2014 was $2,108,063. [Appellant] alleges that
    had the Law Firm applied the same parameters under the
    Performance Appraisal System as it had done in the past, he would
    have been entitled to the entire bonus distribution.
    At a November 20, 2014 shareholder meeting, the
    shareholders approved of Lavery’s motion to have the
    Compensation Committee present annual bonus amounts to the
    shareholders before the individual bonuses were determined.
    [Appellant] confronted Lavery the next day, concerned he was
    advocating for a “cash grab” of the bonus money by other
    shareholders, contrary to the firm’s past practice. Lavery told him
    he planned to allow a shareholders’ vote on bonus distribution and
    [Appellant] responded that such a redistribution vote would
    compel him to leave the firm.
    [Appellant] claims he had a number of meetings with Lavery
    thereafter, between November 21 and December 25, 2014, to
    discuss bonus distribution.    … [I]n the final days of 2014,
    Compensation Committee members Lavery and [Appellant] failed
    to agree on a bonus distribution ….
    On December 30, 2014, Lavery called a meeting of all
    shareholders. [Appellant] claims that just prior to that meeting,
    Lavery met privately with the other three shareholders to discuss
    distribution of 2014 bonuses via shareholder vote, rather than by
    the process utilized in each of the prior thirteen years. At the
    shareholder meeting, by a four to one vote (with [Appellant]
    dissenting), a distribution of the $2,108,063 bonus fund was
    approved wherein [Appellant] was awarded $1,341,993, Lavery
    was awarded $354,365, and the remainder was divided amongst
    the other shareholders. [Appellant] notes that Lavery’s bonus
    significantly increased over his 2013 figure despite his
    performance rating declining significantly between 2013 and
    2014. [Appellant] additionally noted that the bonuses paid to
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    Lavery and two other shareholders were the highest ever paid to
    those attorneys[,] while their performance scores were their
    lowest recorded. [Appellant] claimed the bonus awards were in
    conflict with the established bonus system of rewarding strong
    performance and not rewarding poor performance. He further
    alleges that the approval of the distributions, via a shareholder
    vote on December 30, 2014, rather than by the Compensation
    Committee, was an unauthorized change to the bonus system.
    This alleged unauthorized change to the bonus distribution
    practice reduced [Appellant’s] bonus from $2,108,063 to
    $1,341,993, a loss to [Appellant] of $766,070, which he claims
    [the Law Firm] owes him.
    Trial Court Opinion, 8/8/22, at 4-5. Appellant subsequently left the Law Firm.
    Following Appellant’s departure, Appellant demanded his unpaid salary
    and reimbursement of a $3,000 business expense (Appellant’s annual dues to
    an eminent domain professional organization). Id. at 5. Appellant further
    disputed the value assigned to his shares of the Law Firm and deductions
    charged for Appellant’s failure to provide one year’s notice of his departure,
    as required under the parties’ Restricted Stock Agreement. Id. at 2.
    The trial court described what next transpired:
    Following [Appellant’s] departure, [the Law Firm] sent a
    letter to [Appellant], on May 6, 2015, alleging that [Appellant] had
    unilaterally and improperly sent email notifications to firm clients,
    which [the Law Firm] had never seen nor approved, suggesting to
    clients that they select [Appellant] to retain their files and that
    this was a breach of the withdrawal provisions of the Restricted
    Stock Agreement. [The Law Firm] also informed [Appellant] that
    it considered him in breach of his obligations under the
    Employment Agreement for failing to devote all of his efforts “to
    the practice of law and business of the Corporation” wherein he
    abruptly left the [Law Firm] without appropriate notice and
    commenced his own legal practice.
    [The Law Firm] informed [Appellant] in the letter that under
    the   Employment Agreement, [Appellant] was obligated to
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    reimburse the firm for the value of all work [Appellant] performed,
    whether unbilled or billed and unpaid, on each eminent domain
    case he took with him, up to the date the file was removed from
    the firm. [The Law Firm] also demanded that [Appellant] conduct
    a prompt accounting on each contingent file, prorate each
    recovery and promptly pay the Law Firm its pre-withdrawal share.
    [The Law Firm] included in the letter a lengthy list identifying
    ninety-one (91) files taken by [Appellant] upon which it sought
    reimbursement of attorney’s fees. [The Law Firm] also demanded
    that [Appellant] reimbursee it for costs advanced on all relevant
    files, as reflected on the list.
    [The Law Firm] alleges that [Appellant] failed to reimburse
    it as required under the Employment Agreement and as demanded
    in its letter, prompting it to file its Complaint. In Count I of the
    Complaint, [the Law Firm] asserts that [Appellant] breached
    numerous sections of the Employment Agreement including
    soliciting and diverting firm clients away from [the Law Firm], by
    failing to cooperate with the Law Firm in the completion of his
    pending work and the orderly transfer of work to other Law Firm
    employees, and most significantly, by failing to compensate the
    Corporation for all outstanding disbursements for all work
    performed on legal matters transferred to [Appellant], pursuant
    to Section 13 of the Employment Agreement. [The Law Firm]
    asserts that the minimum damages it has incurred due to
    [Appellant’s] breach of Section 13 is $730,691.16, which includes
    $20,791.16 for costs, $668,000.00 for attorney’s fees, and
    $41,900.00 for paralegal fees. After the offset of $23,106.22
    allegedly due [Appellant] for his Law Firm shares, [Law Firm]
    seeks minimum damages under Count I of $707,584.94. In Count
    II, [the Law Firm] asserts a claim for Quantum Meruit/Unjust
    Enrichment in the amount of $730,691.16, plus costs of suit.
    Trial Court Opinion, 8/8/22, at 2-3.
    Appellant filed an answer, new matter and counterclaims. In his new
    matter, Appellant described the Law Firm’s past practice of determining
    bonuses.   Appellant asserted counterclaims for: (I) Breach of Contract -
    Employment    Agreement,     (II)   Breach   of   Contract   -   Restricted   Stock
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    Agreement,    (III)   Conversion,   and   (IV)   Intentional   Interference   with
    Contractual Relations.
    Under Counterclaim Count I, [Appellant’s] primary assertion is
    that [the Law Firm] breached the Employment Agreement by
    failing to pay the bonus amounts in accordance with the
    Employment Agreement and past practices.            Specifically,
    [Appellant] alleges that Lavery, whom [Appellant] agrees was
    solely delegated with the responsibility to determine bonus
    payments under Employment Agreement Section 4(b), wrongfully
    delegated the bonus determination to a shareholder vote.
    [Appellant] claims a loss $766,070 for bonus payments wrongfully
    withheld.
    [Appellant] also alleges under Count I that he was caused
    unspecified damages when [the Law Firm] delayed him payment
    of his salary due January 25, 2015, until March 10, 2015, in
    violation of the Employment Agreement’s requirement for
    payment of services. Finally, [Appellant] alleges under Count I
    that [the Law Firm] should have paid his $3,000 membership fee
    to a professional organization under Employment Agreement
    Section 5(c), which requires the Law Firm to reimburse him for
    “reasonable business expenses incurred.” [Appellant] claims that
    his new law firm was later forced to pay the fee after he left [the
    Law Firm].
    Under Counterclaim Count II, [Appellant] alleges that the
    Law Firm is in breach of the terms the Restricted Stock Agreement
    whereby it failed, as required under Sections 3 and 4, to fulfill its
    obligation to pay for [Appellant’s] 30.97% ownership interest in
    [the Law Firm] under the time limits set forth thereunder….
    In Counterclaim Count III, [Appellant] asserts a claim for
    conversion. [Appellant] primarily claims that he was entitled to
    receive the entire 2014 bonus monies of $2,108,063 under the
    terms of the Employment Agreement and the established
    Performance Appraisal System. He claims that the Law Firm’s
    failure to follow its past practice, and instead rely upon the
    unauthorized use of shareholder vote to distribute the bonus,
    resulted in conversion of bonus monies due to him of $766,070,
    which was diverted to the other shareholders.
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    [Appellant] also alleges under Count III that [the Law Firm]
    owes him $1,828.15 for his portion of a contingency fee related
    to litigation of a workers’ compensation case (Drivas). In the
    underlying case, [Appellant] had initially represented the claimant
    while still working for [the Law Firm]. After his departure, the
    claimant chose to retain [Appellant]. Thereafter, a Workers’
    Compensation decision was issued and later affirmed finding
    [Appellant’s] firm was entitled to all contingency fees due after
    [Appellant] left [the Law Firm].
    Finally, in Counterclaim Count IV, [Appellant] alleges
    intentional interference with contractual relations….
    Trial Court Opinion, 8/8/22, at 6-7.
    On February 6, 2018, the Law Firm filed preliminary objections
    demurring to Counterclaims I (breach of employment agreement), III
    (Conversion), and IV (interference with contractual relations). The Law Firm
    also objected to Counterclaim Count IV based on lack of specificity. On April
    9, 2018, the trial court sustained the Law Firm’s demurrer to Counterclaim
    Count I, finding as a matter of law that the Law Firm’s distribution of bonus
    funds complied with the Employment Agreement. Trial Court Order, 4/9/18,
    at 1. Additionally, the trial court concluded “the timeliness of [the Law Firm’s]
    payment for [Appellant’s] services in 2015 and reimbursement for business
    expenses was not in violation of its obligation to [Appellant].” Id.
    The trial court further sustained the Law Firm’s preliminary objection to
    Counterclaim Count III (conversion) concluding that Lavery, as managing
    partner, determined the bonus amount in accordance with Appellant’s
    Employment Agreement. Id. at 2. The trial court sustained in part the Law
    Firm’s preliminary objection to Counterclaim Count III (conversion), where
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    Appellant sought a $1,828.15 contingency fee in a worker’s compensation
    case. Id. at 2-3.2 Finally, the trial court sustained the Law Firm’s preliminary
    objection to Counterclaim Count IV for lack of specificity. Id. at 2.
    On May 10, 2018, after pleadings had closed, Appellant filed a motion
    for determination of finality for the trial court’s preliminary objections rulings.
    Motion for Determination of Finality, 5/10/18.         The trial court denied the
    motion because Appellant failed to file the motion within 30 days of the order
    determining preliminary objections, as required by Pa.R.A.P. 341(c)(3). Trial
    Court Order, 9/6/19.
    The matter proceeded through discovery. In late 2021, the parties filed
    motions for summary judgment, “the disposition of which they believed would
    help foster a final settlement.”          Trial Court Opinion, 8/8/22, at 8.    On
    December 13, 2021, the trial court granted, in part, the Law Firm’s summary
    judgment motion:
    [The Law Firm’s] motion for Partial Summary Judgment is hereby
    GRANTED; this Court finds as a matter of law that [Appellant] is
    subject to the re-executed Restricted Stock Agreement (absent
    the contested one-year termination notice, which shall be
    determined at trial) and that, if proven to the factfinder,
    [Appellant] may be held liable either for breach of the Employment
    Agreement or, in the alternative, under a theory of unjust
    enrichment.
    ____________________________________________
    2 The trial court stated it “will not abrogate the Order of the Worker’s
    Compensation Judge” and limited Appellant’s fee consistent with the order.
    Id. at 2-3.
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    Trial Court Order, 12/13/21, at 1 (bold emphasis in original). The trial court
    denied Appellant’s motion for summary judgment. Id.
    Following additional unsuccessful settlement negotiations, Appellant,
    with the agreement of the Law Firm, filed a motion to vacate the trial court’s
    prior preliminary objections order.       Appellant requested the order’s re-
    issuance to allow for a determination of finality under Pa.R.A.P. 341(c), and
    for inclusion of a statement that immediate appeal would facilitate resolution
    of the entire case. Motion To Re-Issue Order, 5/24/22, at 2-3.
    On May 25, 2022, the trial court entered two orders. The first order
    vacated the court’s prior preliminary objections order.        The second order
    adopted the finality language proposed by Appellant and agreed to by the Law
    Firm.    The new order provided:
    1. [The Law Firm’s] Preliminary Objections to [Appellant’s]
    Counterclaim Count I (Breach of Contract/Executive Attorney
    and Employment Agreement) is GRANTED. This determination
    is final. Pursuant to Pa.R.A.P. 341 (c), this Court finds that an
    immediate appeal would facilitate resolution of this entire case
    and further finds that there is a significant relationship between
    the adjudicated and unadjudicated claims, there is a possibility
    that such issues may be considered by this Court, and an
    immediate appeal may enhance the prospects of settlement.
    2. [The Law Firm’s] Preliminary Objections to [Appellant’s]
    Counterclaim Count III (Conversion) are GRANTED in part. This
    determination is final. Pursuant to Pa.R.A.P. 341 (c), this Court
    finds that an immediate appeal would facilitate resolution of this
    entire case and further finds that there is a significant
    relationship between the adjudicated and unadjudicated claims,
    there is a possibility that such issues may be considered by this
    Court, and an immediate appeal may enhance the prospects of
    settlement.
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    3. [The Law Firm’s] Preliminary Objections to [Appellant’s]
    Counterclaim Count IV is GRANTED for lack of specificity
    required by Pa.R.C.P. 1019(a), (b), (f), and (h).
    Trial Court Order, 5/25/22. Appellant timely appealed. Appellant and the trial
    court have complied with Pa.R.A.P. 1925.
    Appellant presents the following issues for review:
    1. WHETHER THE TRIAL COURT COMMITTED ERROR WHEN IT
    GRANTED [THE LAW FIRM]’S PRELIMINARY OBJECTION TO
    [APPELLANT’S] COUNTERCLAIM COUNT I (BREACH OF
    CONTRACT/EXECUTIVE      ATTORNEY      EMPLOYMENT
    AGREEMENT)[?]
    2. WHETHER THE TRIAL COURT COMMITTED ERROR WHEN IT
    GRANTED [THE LAW FIRM]’S PRELIMINARY OBJECTIONS TO
    [APPELLANT’S]    COUNTERCLAIM        COUNT      III
    (CONVERSION)[?]
    Appellant’s Brief at 3.
    Our review of an order determining preliminary objections in the nature
    of a demurrer is de novo, and our scope of review is plenary. Raynor v.
    D’Annunzio, 
    243 A.3d 41
    , 52 (Pa. 2020).
    We recognize a demurrer is a preliminary objection to the legal
    sufficiency of a pleading and raises questions of law; we must
    therefore accept as true all well-pleaded, material, and relevant
    facts alleged in the complaint and every inference that is fairly
    deducible from those facts. A preliminary objection in the nature
    of a demurrer should be sustained only in cases that clearly and
    without a doubt fail to state a claim for which relief may be
    granted.
    
    Id.
     (quotation marks and citation omitted).
    Appellant first argues that the trial court improperly granted the Law
    Firm’s preliminary objection to Appellant’s Counterclaim Count I, because the
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    facts, as pleaded, alleged a breach of contract cause of action. Appellant’s
    Brief at 9.   Appellant claims his breach of contract claim is based on the
    following language of the Employment Agreement:
    The amount of the Incentive Compensation Bonus and the
    Attorney’s and corporation’s ability to meet the agreed upon
    objectives shall be determined by the Corporation’s Board of
    Directors and/or its President and/or its Managing Shareholder in
    its, his or their sole discretion.
    
    Id.
     Appellant asserts Lavery previously breached the Employment Agreement
    by not exercising his sole discretion in calculating bonus awards. See id. at
    10. Instead, Lavery delegated his decision to a shareholder vote, “taking ‘sole
    discretion’ out of the equation.” Id. at 11.
    Appellant specifically challenges the trial court’s characterization of
    Appellant’s following averment as an admission: “2014 bonus payments were
    determined    by   Lavery   in   full   compliance   with   the   Employment
    Agreement[.]” Id. at 11 (emphasis added) (quoting Counterclaim Paragraph
    65). Appellant argues the trial court erred by disregarding other “well-pleaded
    facts and the inferences therefrom” in Appellant’s Counterclaim I. Id. at 12.
    Appellant asserts the trial court failed to
    appreciate that [Appellant’s] Counterclaims allege that there is a
    process to determine incentive bonus distribution under the
    Employment Agreement, but that process was not followed when
    Mr. Lavery involved other parties and delegated the distribution
    decision to a committee….
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    Id.   According to Appellant, the decision of bonus distributions by a
    shareholder vote constituted breach of the Employment Agreement. Id. at
    13.
    “[T]hree   elements      are   necessary   to   plead   a   cause   of   action
    for breach of contract: (1) the existence of a contract, including its essential
    terms; (2) a breach of the contract; and[] (3) resultant damages.” Meyer,
    Darragh, Buckler, Bebenek & Eck, P.L.L.C. v. Law Firm of Malone
    Middleman,       P.C.,   
    137 A.3d 1247
    ,   1258     (Pa.    2016)    (citation
    omitted). Contract interpretation is a question of law. Davis v. Borough of
    Montrose, 
    194 A.3d 597
    , 608 (Pa. Super. 2018). Our standard of review
    is de novo and our scope of review is plenary.          
    Id.
       When interpreting a
    contract, the goal “is to ascertain and give effect to the intent of the parties
    as reasonably manifested by the language of their written agreement.” 
    Id.
    (citation omitted).
    In rejecting Appellant’s claim, the trial court stated:
    [T]o the extent [Appellant] was seeking additional payment of his
    2014 bonus, this Court explained its reasoning for the dismissal
    of his claims in the 2018 Order:
    … [Count I, Breach of Contract] The Court finds that the
    Managing Shareholder[, Lavery], in his sole discretion,
    properly determined the method of which [Appellant’s] bonus
    for 2014 would be determined and permissibly determined
    the amount of [Appellant’s] bonus for year 2014 in accord
    with the Executive Attorney Employment Agreement….
    … [Count III, Conversion] The Court again finds that the
    Managing Shareholder properly and permissibly determined
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    [Appellant’s] bonus in accord with the terms of the Executive
    Attorney Employment Agreement.
    In so holding, this [c]ourt was relying upon the clear and
    unambiguous language in Section 4(b) of the Employment
    Agreement, which explicitly stated that “[t]he amount of the
    [bonus] and the Attorney’s and [Law Firm’s] ability to meet
    the agreed upon objectives shall be determined by the
    [Law Firm’s] Board of Directors and/or its President
    and/or its Managing Shareholder in its, his or their sole
    discretion[.]” (Complaint, Exbt. G) [Appellant] admitted in the
    pleadings that “[t]he terms of the Employment Agreement
    indicate that Lavery, as President or Managing Shareholder, was
    required to determine Bonus payments.” (Answer with New
    Matter, 65) This clear language reflects that, as applied,
    Lavery had complete discretion to decide all facets of bonus
    distribution. There is no other language in the Employment
    Agreement otherwise limiting this discretion, including
    consideration of past discretionary, bonus payment practices. As
    such, it was clearly within Lavery’s sole discretion to delegate the
    decision on the 2014 bonus distribution to a shareholder vote. As
    such, this Court found that [Appellant] failed to state a claim for
    a different bonus distribution than the one made by [the Law Firm]
    in 2014, which was in full conformity with Section 4(b) of the
    Employment Agreement.
    [The trial court] also held in both Orders that Count IV (intentional
    interference with contractual relations) should be dismissed.
    [Appellant] has not sought a determination of finality as to this
    holding and is thus not pursuing review of it on appeal. As such,
    [the court] will not be addressing the merits of [the court’s]
    dismissal of Count IV.
    Finally, [the court] briefly addresses the remaining claims made
    by [Appellant] in Counterclaim Count I, relevant to the current
    issues. In his Count I breach of contract claim, [Appellant], in
    addition to seeking bonus money, also sought unspecified
    damages for [the Law Firm’s] delayed salary payment and
    reimbursement for a $3,000 membership fee. This Court, in its
    2018 Order, dismissed these claims. This Court notes that this
    holding was issued in error[,] inasmuch as [the Law Firm]
    never raised any objections to these claims; [the Law
    Firm’s] sole objection to Count I was limited to
    [Appellant’s] claim for bonus money. As such, this Court
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    respectfully requests that, to the extent this Court’s May
    25, 2022 Order encompasses a dismissal of these two
    claims (delayed salary payment and professional fee), that
    that decision be reversed and those claims reinstated.
    Trial Court Opinion, 8/8/22, at 10-11 (emphasis added, footnote omitted).
    The record supports the trial court’s determinations, and we discern no error
    beyond the trial court’s inadvertent dismissal of Appellant’s claims for the
    unreimbursed business expense and delayed salary payment.                  See 
    id.
    Appellant’s first issue merits no relief.
    In his second issue, Appellant argues the trial court improperly
    sustained Lavery’s preliminary objection to Counterclaim Count I, because the
    well-pleaded facts established conversion of his share of the bonus funds.
    Appellant’s Brief at 14. Appellant asserts the “bonus funds were by contract
    identified as ‘Incentive Bonus’ corresponding to the reward of good or strong
    performance and not weak and significantly deteriorated performance.” Id.
    at 15 (emphasis added). Appellant again claims the trial court improperly
    relied on Paragraph 120 of Appellant’s Counterclaim. Id. Appellant asserts
    “it is not clear that [he] cannot prevail.”      Id.   Appellant offers no further
    argument in this regard.
    Under Pennsylvania case law, conversion is “the deprivation of another’s
    right of property in, or use or possession of, chattel, or other interference
    therewith,    without      the   owner’s       consent    and    without     lawful
    justification.” McKeeman v. Corestates Bank, N.A., 
    751 A.2d 655
    , 659 n.
    3 (Pa. Super. 2000) (quoting Stevenson v. Economy Bank of Ambridge,
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    197 A.2d 721
    , 726 (Pa. 1964)). A person may incur liability for conversion
    by “[u]nreasonably withholding possession from one who has the right to
    it.” Martin v. National Sur. Corp., 
    262 A.2d 672
    , 675 (Pa. 1970).
    As stated above, the trial court concluded (a) Appellant admitted the
    Law Firm had complied with the Employment Agreement; and (b) Lavery’s
    delegation of his bonus decision to the shareholders did not breach the
    Employment Agreement. See Trial Court Opinion, 8/8/22, at 10-11. Because
    we discern no error in these determinations, Appellant’s second issue does not
    merit relief. See 
    id.
    For the foregoing reasons, we affirm the trial court’s dismissal of the
    portions of Counts I and IV claiming breach of contract, conversion and unjust
    enrichment based upon the Law Firm’s determination of Appellant’s 2014
    bonus.   We reverse the portion of the order dismissing Appellant’s claims
    based upon the Law Firm’s failure to reimburse Appellant’s business expense
    and timely pay Appellant’s salary, and remand for further proceedings.
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    Motions denied. Order affirmed in part and reversed and remanded in
    part for further proceedings consistent with this memorandum. Jurisdiction
    relinquished.
    Judgment Entered.
    Joseph D. Seletyn, Esq.
    Prothonotary
    Date: 2/13/2023
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Document Info

Docket Number: 884 MDA 2022

Judges: Murray, J.

Filed Date: 2/13/2023

Precedential Status: Precedential

Modified Date: 2/13/2023