Karandrikas, G. v. Skeparnias, L. ( 2014 )

J-A22021-14
NON-PRECEDENTIAL DECISION - SEE SUPERIOR COURT I.O.P. 65.37
GEORGE N. KARANDRIKAS, : IN THE SUPERIOR COURT OF
: PENNSYLVANIA
Appellee :
:
v. :
:
LOUIS N. SKEPARNIAS, :
:
Appellant : No. 2098 MDA 2013
Appeal from the Order Entered November 6, 2013,
In the Court of Common Pleas of York County,
Civil Division, at No. 2010-SU-002514-01.
GEORGE N. KARANDRIKAS, : IN THE SUPERIOR COURT OF
: PENNSYLVANIA
Appellee :
:
v. :
:
LOUIS N. SKEPARNIAS, :
:
Appellant : No. 344 MDA 2014
Appeal from the Judgment Entered January 29, 2014,
In the Court of Common Pleas of York County,
Civil Division, at No. 2010-SU-002514-01.
BEFORE: PANELLA, SHOGAN and FITZGERALD*, JJ.
MEMORANDUM BY SHOGAN, J.: FILED OCTOBER 20, 2014
Louis N. Skeparnias (“Appellant”) appealed the November 6, 2013
order appointing a receiver and the January 29, 2014 judgment entered
against him. We consolidated the appeals sua sponte on March 27, 2014.
Upon review, we affirm the order and the judgment.
*Former Justice specially assigned to the Superior Court.
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The matter before us began with a complaint filed by George
Karandrikas (“Karandrikas”), who entered a joint venture agreement with
Appellant on July 1, 1996, for the development of real estate in York County,
Pennsylvania. Karandrikas sought $1.67 million in damages, claiming
Appellant breached the joint venture agreement and his fiduciary duty to the
joint venture through self-dealing and by improperly dissipating funds.
Specifically, Karandrikas averred that Appellant wrongfully hired and paid
himself and his company, Sigma Commercial Realty (“Sigma”), to manage
the joint venture’s properties; hired his sons’ company, Genesis
Maintenance, LLC (“Genesis”), as a property maintenance/security
subcontractor; and abated rent for his sons’ restaurant, the Sports Garden.
Appellant counterclaimed for compensatory damages and legal fees based
on his successful management of the joint venture. After a three-day bench
trial in October 2013, the trial court found in favor of Karandrikas, awarded
him $1,027,000.00 in damages plus attorney’s fees, and dismissed
Appellant’s counterclaim. Additionally, the trial court appointed a receiver to
wind up the joint venture. According to the trial court, Karandrikas’
evidence was “credible and compelling,” while Appellant’s evidence “was not
credible and, in parts, downright unbelievable.” Trial Court Opinion,
1/27/14, at 4.
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Appellant filed a post-trial motion containing thirty-three claims of
error, which the trial court denied following oral argument on December 16,
2013. This appeal followed the entry of judgment in favor of Karandrikas.
Appellant and the trial court complied with P.R.A.P. 1925.
Appellant presents the following questions for our consideration:
Did the trial court commit reversible errors and abuses of
discretion:
a. Awarding plaintiff Karandrikas restitution damages in
the amount of $1,027,000, where he never requested
or demanded restitution damages in any pleading or at
any time before, during, or even after trial?
b. Rendering judgment for plaintiff/appellee Karandrikas in
the amount of $1,027,000, where he failed to prove
that he sustained any damages (and admitted as much
at trial)?
c. Ruling that [Appellant] “waived” his challenges to the
award of contract damages for allegedly failing to
“previously or timely” present his arguments regarding
i) restitution damages, ii) remuneration, iii) unjust
enrichment, iv) equity, and v) gist-of-the-action—
without identifying the legal standards applied or the
measure of those damages to support the award?
d. Contradicting the factual findings and legal conclusions
of the Honorable President Judge Stephen P. Linebaugh
that he made in denying the majority of plaintiff
Karandrikas’ motion for preliminary injunction after a
hearings [sic] and extensive testimony by the parties?
e. Ruling that [Appellant] breached the parties’ Joint
Venture Agreement (“JV Agreement”) through acts
characterized as “self dealing,” while ignoring the
parties’ modification of their JV Agreement by their
course of performance?
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f. Awarding to plaintiff Karandrikas all attorneys’ fees
submitted at trial as reasonable, while failing to
properly calculate any i) lodestar, ii) reasonable number
of hours, or iii) reasonable hourly rates?
g. Appointing a receiver at the conclusion of a bench trial
where, inter alia: i) the plaintiff Karandrikas never
requested the equitable relief for appointment of a
receiver at any time before the close of witness
testimony at trial, ii) no evidence concerning the
appointment of a receiver was presented at trial, iii) the
appointment of a receiver was not an issue tried in the
bench trial or in any required hearing, iv) the request
for [a] receiver was only first made in plaintiff counsel’s
closing argument, and v) the trial court refused defense
counsel’s request for permission to respond to plaintiff
counsel’s closing argument request for a receiver?
Appellant’s Brief at 6–7 (renumbered for ease of disposition).
We reiterate that this was a nonjury trial. Our appellate role in such
cases is:
to determine whether the findings of the trial court are
supported by competent evidence and whether the trial court
committed error in any application of the law. The findings of
fact of the trial judge must be given the same weight and effect
on appeal as the verdict of a jury. We consider the evidence in a
light most favorable to the verdict winner. We will reverse the
trial court only if its findings of fact are not supported by
competent evidence in the record or if its findings are premised
on an error of law.
We will respect a trial court’s findings with
regard to the credibility and weight of the evidence
unless the appellant can show that the court’s
determination was manifestly erroneous, arbitrary
and capricious or flagrantly contrary to the evidence.
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Joseph v. Scranton Times, L.P., 89 A.3d 251, 259–260 (Pa. Super. 2014)
(quoting J.J. DeLuca Co., Inc. v. Toll Naval Associates, 56 A.3d 402, 410
(Pa. Super. 2012)).
Appellant’s first three issues concern the trial court’s award of
damages to Karandrikas. We review these issues mindful of the following
standard:
The duty of assessing damages is within the province of
the [fact-finder] and should not be interfered with by the court,
unless it clearly appears that the amount awarded resulted from
caprice, prejudice, partiality, corruption or some other improper
influence. In reviewing the award of damages, the appellate
courts should give deference to the decisions of the trier of fact
who is usually in a superior position to appraise and weigh the
evidence. If the verdict bears a reasonable resemblance to the
damages proven, we will not upset it merely because we might
have awarded different damages.
Hatwood v. Hosp. of the Univ. of Pennsylvania, 55 A.3d 1229, 1240–
1241 (Pa. Super. 2012) (citation omitted), appeal denied, 65 A.3d 414 (Pa.
2013). “The fact-finder must assess the worth of the testimony, by
weighing the evidence and determining its credibility and by accepting or
rejecting the estimates of the damages given by the witnesses.” Delahanty
v. First Pennsylvania Bank, N.A., 464 A.2d 1243, 1257 (Pa. Super. 1983)
(internal citation omitted).
Appellant proffers myriad arguments in support of his challenge to the
award of damages. First, Appellant complains that the trial court erred in
awarding Karandrikas restitution damages because Karandrikas never
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requested restitution damages; rather, he “sought compensatory damages
and specific performance for breach of contract and breach of fiduciary
duty.” Appellant’s Brief at 21; Appellant’s Reply Brief at 12. Second,
Appellant asserts that the trial court erred in awarding Karandrikas
restitution damages because he did not incur damages, and he admitted as
much at trial. Id. at 22. Third, citing the Honorable Stephen P. Linebaugh’s
conclusion that Sigma and Appellant’s sons performed their work
satisfactorily and at reasonable rates, Appellant argues that, even if “the
affiliated contracts themselves constituted breaches of the JV Agreement,
Karandrikas was not harmed and could not prove any damages arising
therefrom—including for restitution.” Id. at 23. Fourth, relying on the
RESTATEMENT (SECOND) OF CONTRACTS § 344, Appellant contends that, although
the trial court “awarded ‘compensatory damages,’ . . . restitution is the only
possible measure of damages that the trial court awarded” because
Karandrikas introduced no evidence of his expectation interest or his reliance
interest. Id. at 24. Fifth, Appellant submits that Karandrikas was not
entitled to restitution because he failed to prove unjust enrichment. Id. at
25. Sixth, Appellant complains that the trial court’s award of restitution to
Karandrikas was “highly inequitable” because Appellant successfully
managed the joint venture. Id. at 26. In support of this argument,
Appellant relies on Greenan v. Ernst, 184 A.2d 570 (Pa. 1962). Finally,
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Appellant asserts that the trial court abused its discretion in denying
Appellant’s post-trial motion on the basis that he “waived” his challenges to
the award of restitution damages. Appellant’s Brief at 31–32.
In response to Appellant’s restitution-based arguments, Karandrikas
retorts that Appellant wrongfully attempts to re-characterize the contract
damages as restitution, despite the fact that Karandrikas clearly sought to
enforce the joint venture agreement and to recover compensatory damages,
i.e., damages appropriate to put him in the position he would have been in
but for Appellant’s breaches. Karandrikas’ Brief at 24. Karandrikas
contends that the uncontroverted trial evidence established that Appellant’s
unauthorized transactions damaged Karandrikas by depleting “over $1
million from the Joint Venture’s assets, leaving it delinquent on its taxes and
in foreclosure, despite massive cash contributions from Karandrikas.” Id. at
25–31. Additionally, Karandrikas challenges Appellant’s argument that he is
entitled to compensation for his efforts on behalf of the joint venture by
distinguishing Greenan. Id. at 31–34. Karandrikas also asserts that the
trial court’s ruling that Appellant “breached the terms of the JV Agreement
by engaging in self-dealing was supported by the express language of the JV
Agreement and by Pennsylvania law.” Id. at 34–38. Finally, Karandrikas
argues that competent evidence supports the trial court’s conclusion that
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Appellant breached his fiduciary duty to the joint venture by engaging in
self-dealing transactions. Id. at 38–44.
The trial court itemized its award of damages on the record:
Well, having found a breach of contract, breach of fiduciary
duty, we are going to award damages.
It is, frankly, tempting to just say, fine, all the figures they
asked for they get because the conduct was so outrageous.
However, the law really doesn’t permit that. You don’t get a
blank check just because the other guy breached the contract.
Damages have to be provable. They have to be related. And I
have tried to analyze each one of these things with that in mind.
I should also say, [Appellant’s counsel] made reference in
his closing to if there is some dissolution, there will be some
adjustments in the accounting for the winding down and
dissolution of the Joint Venture. While at first blush that may
seem appealing, I don’t have any information at the moment
whether there is going to be anything out of the Joint Venture
from liquidating the assets. And I am confronted with Mr.
Karandrikas’ claim in the lawsuit and his evidence of damages.
Now, let me start with the most problematic first. And in
my mind, the most problematic first was the foreclosure tax sale
fees, some $48,000. I didn’t hear any evidence as to what year
the tax bill wasn’t paid. Now, generally speaking, it takes two
years to get to a tax upset sale. And I believe I recall
[Appellant’s] testimony that paying the taxes and the insurance
was just like paying the bank, because if you didn’t, you
defaulted on the loan and that was the same as missing a
payment. But, that still doesn’t help me when I try and recall all
of his testimony. Now, somewhere I thought there was a tax
notice. But that might have been, frankly, from the petition to
stay this tax sale that I was presented with a couple of weeks
ago. And there is a tax claim. I was 27 on the tax claim listing.
But, all it was was -- all it was was the circle of numbers -- I
guess maybe it was 2011, if I look at the year bill-- I guess that
is there. 2011, 2012.
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Well, it all may be moot as far as some accounting because
the tax sale was scheduled. I stayed it. I am not going to stay
it forever. So, I don’t know what’s going to happen with that tax
bill.
But, since there were funds from rent and it appears that
[Appellant] was even paying Sigma as of last month, my view is
that a deal could have been cut with the Tax Claim Bureau for a
payment schedule to make up those taxes. And that wasn’t
done. So, penalties and interest have been applied, and
therefore, the most problematic of fees. I am going to allow
that. That’s the combination penalty and interest of $48,000.
With regard to the others, they are what they are. There
is no dispute about the amounts.
The question does present itself as to whether or not
[Appellant] should pony up half of the unpaid Sports Garden
defaulted rents. What my finding is and my conclusion is that he
has significantly impaired the ability to collect that money. We
had testimony that one of the guarantors is living out of state.
The other lives out of county. So, it is going to be a tremendous
effort to track them down and try to do anything to collect that
money.
And the license is problematic. That is still in the
corporate name. But, something is going to have to be done to
get the license back into the Joint Venture entity. And I am not
sure how that is impaired by the delay.
* * *
The loan financed amount, $146,000 there. My problem
with that is that was a voluntary act taken for, I am going to
say, business, personal business reasons to protect other assets
. . . . I don’t see that as a damage resulting from a breach of
the agreement. . . . So, I am not awarding $146,000. I don’t
find that damage relates to a breach.
* * *
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So, where do we end up? . . . All I did was, I found in
favor of the damages for -- I will generically identify those -- half
of the payments to Sigma, half of the $25,000, half of the 11 to
[Appellant’s sons] Nick and John, half of the Genesis 54, half of
the 48, half of the 249, half of the unpaid Sports Garden rent,
and attorneys’ fees of $315,000, round figure. Now, on those,
my figure is $841,000.
Now, I come to finally what to do about $186,000
difference in the post-injunction payments. Here’s my bottom
line on that. Is it fair not to reimburse Mr. Karandrikas when
[Appellant] stopped making the payments and paid Sigma? I
guess in trying to put people where they were before –
[interruption in proceedings]
That’s what I have decided to do. I am going to put
people back where they were before.
* * *
So, if my math is correct, I am awarding damages in the
mount of $1,027,000 in favor of Mr. Karandrikas and against
[Appellant].
* * *
On [Appellant’s] claim for his lost profits based on Mr.
Karandrikas’s refusal to go along with additional financing, I find
against [Appellant] on that and in favor of Mr. Karandrikas.
* * *
I don’t believe [Appellant paid an extra $60,000 toward the joint
venture]. I believe the records that were submitted and,
particularly, the accountant’s report and the Exhibit 23.
N.T., 10/23/13, at 652–659.
The trial court disposed of Appellant’s restitution-based arguments in
its Pa.R.A.P. 1925(a) opinion as follows:
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Initially, it should be noted, in an effort to make a silk
purse out of a sow’s ear, successor counsel attempts to recast
the case as confusion between breach of contract as opposed to
unjust enrichment, damages for the breach as opposed to
“restitution damages”/”remuneration”, and the “equities” of the
case. Counsel attempts to insert Sigma and the family affiliates
as being entitled to the money they received, in an effort to
justify [Appellant’s] breach of the self-dealing prohibition. . . .
[T]he most cursory reading of the Court’s decision discloses an
inescapable finding of breach of the contract and an award of
damages based on the breach.
Trial Court Opinion, 1/27/14, at 6.
Upon review of the record before us, we discern no grounds for relief.
As set forth above, the trial court thoroughly justified its award of damages
and explained its rejection of Appellant’s mischaracterization of the damages
as restitution. The evidence of record supports the award, and we will not
interfere with the trial court’s credibility determinations. Nothing in the
record suggests that the amount of damages awarded resulted from caprice,
prejudice, partiality, corruption, or some other improper influence. Giving
deference to the decision of the trial judge, who—sitting as the trier of fact—
was in a superior position to appraise and weigh the evidence, we conclude
that the verdict bears a reasonable resemblance to the damages proven by
Karandrikas. Therefore, we will not upset the verdict. Hatwood, 55 A.3d
1240–1241.
Additionally, we agree with Karandrikas that Greenan is
distinguishable. Therein, the trial court, sitting in equity, reviewed a
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defrauded partner’s claim for restitution from the self-dealing partner’s
estate. Affirming the trial court’s grant of restitution, the Pennsylvania
Supreme Court noted a distinction:
Restitution, not punishment, is the goal of this proceeding. . . .
While, ordinarily, a person guilty of fraud is not to be allowed
profits or benefits derived therefrom in whatever form, we are of
opinion that where, . . . his services have greatly increased the
value of the property which he fraudulently acquired, and the
fruits of his management ultimately accrue to the rightful owner,
an allowance may properly be made for the service rendered if,
in the discretion of the court, the circumstances in the particular
case so warrant. The circumstances in the case at bar not only
warrant but demand, if equity is to be accomplished, the
allowance of reasonable compensation to W. J. Healey or his
estate.
Greenan, 184 A.2d at 578 (quoting Brooks v. Conston, 72 A.2d 75, 79
(Pa. 1950)) (emphasis in original). According to the Greenan court, the
self-dealing partner “devote[d] his skill and efforts to the successful
employment of the partnership assets.” Greenan, 184 A.2d at 578. Thus,
the Supreme Court concluded, “[T]o deny [the offending partner] any
compensation or allow him only nominal compensation would be most
inequitable.” Id.
Unlike the court in Greenan, which acknowledged the profitable
consequences of the partner’s self-dealing, the trial court herein credited
Karandrikas’ claim that Appellant’s self-dealing resulted in damages.
Exercising its discretion, the trial court concluded that the circumstances at
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hand did not warrant compensation to Appellant. Brooks, 72 A.2d at 79.
As discussed above, we discern no abuse of discretion.
Appellant’s fourth question posits that the trial court erred in ignoring
Judge Linebaugh’s decision on Karandrikas’ motion for a preliminary
injunction, which, according to Appellant, was binding on the trial court as
the law of the case. Appellant’s Brief at 32; Appellant’s Reply Brief at 23.
Karandrikas responds that Judge Linebaugh’s ruling was not binding on the
trial court under Pennsylvania law. Karandrikas’ Brief at 44–45.
Karandrikas further contends that the trial court’s findings after trial were
not inconsistent with Judge Linebaugh’s findings at the preliminary injunction
stage. Id. at 47–48. Moreover, Karandrikas argues, the parties’ conduct
did not modify the joint venture agreement “such that Karandrikas was
equitably estopped from asserting claims for breach of contract and breach
of fiduciary duties.” Id. at 49–52.
It is well settled that courts of the same jurisdiction cannot
overrule each other’s decisions in the same case. Riccio v.
American Republic Ins. Co., 550 Pa. 254, 705 A.2d 422, 425
(1997) (citing Commonwealth v. Starr, 541 Pa. 564, 664 A.2d
1326, 1331 (1995)). The coordinate jurisdiction rule falls within
the “law of the case” doctrine and promotes finality in pretrial
proceedings and judicial efficiency. Id. In order to determine
whether the coordinate jurisdiction rule applies we must examine
the procedural posture of the rulings in question. “Where the
motions differ in kind, a judge ruling on a later motion is not
precluded from granting relief although another judge has
denied an earlier motion.” Goldey v. Trustees of the Univ. of
Pennsylvania, 544 Pa. 150, 675 A.2d 264, 267 (1996).
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Buck Hill Falls Co. v. Clifford Press, 791 A.2d 392, 396 (Pa. Super.
2002). Additionally, we have held that a preliminary injunction is not
binding for purposes of a final adjudication. Id. at 397 (citing Humphreys
v. Cain, 477 A.2d 32, 35 (Pa. Cmwlth. 1984)).
The trial court disposed of this issue on the record as follows:
There was a lot of testimony about no meetings, yes
meetings, informal meetings, started to go to meetings, didn’t
go to meetings, threatened about meetings. The agreement
provides that the managing partner is to provide information,
keep the other informed. And while I don’t disagree with Judge
Linebaugh’s [observation that] written agreements may be
modified by conduct, when I read his opinion more carefully, he
is addressing, I believe, the policies and procedures, because
there is no evidence that the Joint Venture created written
policies and procedures as discussed on Page 22. “The
managing venturer shall at all times conform to policies and
programs established and approved by the venturers in writing
and the scope of the managing venturer’s authority shall be
limited to said policies and programs.” And they do talk about
the managing venture will at all times be subject to the direction
of the venturers agreed to at a meeting or in a writing signed by
both venturers. They never did that. They never did that. I
believe when Judge Linebaugh is referring to policies and
procedures, that modification may be what’s in his mind. I don’t
know.
But I do know that the fact that there were no written
policies and procedures does not undercut the duty, the fiduciary
duty of one partner as they act for the partnership in having the
partnership interest utmost in mind in treating the partner with
utmost fairness.
N.T., 10/23/13, at 645–646. Additionally, the trial court opined in its
Pa.R.A.P. 1925(a) opinion that:
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[this issue] does appear to be the linchpin of the defense. The
“law of the case” argument was presented in an oral motion
immediately prior to trial. [Karandrikas’] counsel had addressed
such in his trial brief. We have again considered this issue and
the cases cited by the parties. We find no error in our ruling
denying [Appellant’s] oral motion. Whether argued as collateral
estopped/res judicata or the coordinate jurisdiction doctrine, the
result is the same. The principles of res judicata and collateral
estoppel are inapplicable to findings of the Court in the
proceedings on the preliminary injunction. Santoro v. Morse,
781 A.2d 1220 (Pa. Super. 2001). A preliminary injunction
concludes no rights and is a final adjudication [of] nothing.
Humphreys v. Cain, 477 A.[2d] 32 (Pa. Commw. 1984). Very
directly, the Superior Court has ruled “a decision regarding a
preliminary injunction is not binding for purposes of a final
adjudication.” Buck Hill Falls Co. v. Clifford Press, 791 A.2d 392
(Pa. Super. 2002). This claim of error has no merit.
Trial Court Opinion, 1/27/14, at 7.
Upon review, we conclude that Appellant’s law-of-the-case argument
lacks merit. Judge Linebaugh heard and ruled on Karandrikas’ request for a
preliminary injunction, granting relief only “with respect to the finances of
the Joint Venture.” N.T., 2/7/11, at ___; Order of Court, 2/25/11, at 7. The
trial court conducted a three-day trial and ruled on the merits of
Karandrikas’ claims that Appellant breached the joint venture agreement and
his fiduciary duty to the joint venture. Because the procedural posture of
the rulings in question differed, the trial court was not precluded from
granting Karandrikas final relief, even though Judge Linebaugh partially
denied his request for preliminary injunctive relief. Goldey, 675 A.2d at
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267; Buck Hill Falls Co., 791 A.2d at 396. Appellant is not entitled to
relief.
Appellant’s fifth question challenges the trial court’s findings that
Appellant engaged in self-dealing. According to Appellant, the trial court
erred in looking “to parol evidence—not the JV Agreement’s language—to
determine Karandrikas’ intent” or understanding with regard to Appellant’s
management of the joint venture. Appellant’s Brief at 41; Appellant’s Reply
Brief 21.1 In reply, Karandrikas contends that Appellant failed to assert a
timely objection to Karandrikas’ testimony regarding his intent or
understanding in forming the joint venture; he also posits that Karandrikas’
testimony “was not inadmissible parole evidence because it did not vary
from or contradict the terms of the written contract.” Karandrikas’ Brief at
19, 38. Karandrikas further argues that the evidence established Appellant
breached the joint venture agreement’s prohibition against self-dealing and,
therefore, his fiduciary duty, by engaging in transactions with himself, his
1
“[D]ecisions on admissibility are within the sound discretion of the trial
court and will not be overturned absent an abuse of discretion or
misapplication of law. In addition, for a ruling on evidence to constitute
reversible error, it must have been harmful or prejudicial to the complaining
party.” Phillips v. Lock, 86 A.3d 906, 920 (Pa. Super. 2014) (quoting
Stumpf v. Nye, 950 A.2d 1032, 1035–1036 (Pa. Super. 2008)).
Contrary to Appellant’s claim, we observe that the trial court examined
several provisions of the joint venture agreement in considering whether
Appellant engaged in self-dealing. N.T., 10/23/13, at 637–638, 639–640.
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wholly owned company, Sigma, with his sons, and his sons’ business—all
without Karandrikas’ knowledge or consent. Id. at 39–44.
“Under prevailing Pennsylvania law, a timely objection is required to
preserve an issue for appeal.” Shelhamer v. Crane, 58 A.3d 767, 770 (Pa.
Super. 2012) (quoting Samuel–Bassett v. Kia Motors Am., Inc., 34 A.3d
1, 45 (Pa. 2011)); Pa.R.C.P. 227.1(b). Moreover, “[i]ssues not raised in the
lower court are waived and cannot be raised for the first time on appeal.”
Pa.R.A.P. 302(a).
Upon review, we agree with Karandrikas that Appellant waived this
challenge. The record confirms that Appellant did not object to Karandrikas’
testimony about his intent or understanding with regard to Appellant’s
management of the joint venture. N.T., 10/21/13, at 16–27.
Appellant’s sixth question challenges the trial court’s award of
attorneys’ fees without considering any lodestar 2 or whether the number of
hours and the hourly rate were reasonable. Appellant’s Brief at 45;
Appellant’s Reply Brief at 25.3 According to Karandrikas, Appellant waived
this issue because he failed to object to Karandrikas’ claim for attorney’s
2
In the context of this challenge, we interpret Appellant’s use of the term
“lodestar” to mean a standard hourly rate and number of hours against
which to compare Karandrikas’ claim for attorneys’ fees.
3
Awarding attorney’s fees authorized by contract or statute is within the
trial court’s discretion; an award will not be reversed absent an abuse of that
discretion. Scalia v. Erie Ins. Exchange, 878 A.2d 114, 116 (Pa. Super.
2005).
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fees when Appellant received attorney invoices from Karandrikas weeks
before trial or when Karandrikas testified about attorneys’ fees during trial.
Karandrikas’ Brief at 20.
The trial court disposed of this issue on the record and in its Rule 1925
opinion as follows:
The attorneys’ fees, I didn’t hear any dispute that they
were unreasonable. The agreement does provide for attorneys’
fees, as I have already recited.
With regard to the general claim that the defense made for
attorneys’ fees, I found no provision in the agreement for an
award of attorneys’ fees otherwise regarding a general breach of
the agreement.
To be honest, I looked at some of the indemnification
language in the Sigma agreement, and an argument may be
made that the Sigma agreement has the owner, quote, Joint
Venture indemnifying Sigma. I don’t know. That wasn’t in front
of me. But, I found no provision generally allowing attorneys’
fees to a successful party or for even any litigation over breach
of contract, except as limited in the agreement.
N.T., 10/23/13, at 654–655.
It is disingenuous of the defense to presently suggest error in
the consideration of attorney’s fees. The defense claimed
attorney fees and indeed was afforded the opportunity to
document their bill even after trial testimony closed. (See
particularly page 634 of the trial transcript). [Karandrikas’]
counsel provided invoices and payment records during discovery.
Indeed the invoices and records of payment were trial exhibits
P32 and P33 to which no objection was made and in the absence
of any objection, were admitted prior to the start of testimony.
(Pages 6 – 7 Trial Transcript.). In the Court’s Pre-trial Order,
[Appellant’s] legal fee claim was noted. [Karandrikas’] legal fee
claim was included in his damages total. All involved at trial
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knew legal fees were included in the case in chief. As raised,
[this issue] now borderers [sic] on the frivolous.
Trial Court Opinion, 1/27/14, at 8.
As stated above, a timely objection is required to preserve an issue for
appeal, and issues not raised in the lower court are waived and cannot be
raised for the first time on appeal. Shelhamer, 58 A.3d at 770; Pa.R.C.P.
227.1(b); Pa.R.A.P. 302(a).
Upon review, we conclude that Appellant waived this issue. The record
at hand confirms that Appellant was aware of Karandrikas’ claim for
attorneys’ fees before trial and that he did not request a lodestar or object
to the rates and the hours submitted in discovery or testified to by
Karandrikas and Karandrikas’ son, Nikolaos, at trial. Complaint, 5/20/10, at
18; Amended Complaint, 6/12/12, at 16; N.T., 10/21/13, at 66, Exhibit P32;
N.T., 10/22/13, at 214–215, Exhibit P33.
Lastly, Appellant challenges the trial court’s order directing the
appointment of a receiver as an abuse of discretion. Appellant’s Brief at 53.4
In response, Karandrikas claims that Appellant suggested the appointment
of a receiver, did not object to the appointment, and, therefore, “should not
now be allowed to complain about the Trial Court’s order.” Karandrikas’
Brief at 59. Moreover, Karandrikas contends, Appellant’s self-dealing
4
The appointment of a receiver is within the trial court’s discretion and will
be reviewed for an abuse of that discretion. Bogosian v. Foerderer Tract
Comm., Inc., 399 A.2d 408, 411 (Pa. Super. 1979).
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provided justification for appointment of a receiver and the winding up of the
joint venture. Id. at 60.
The trial court disposed of Appellant’s challenge to the appointment of
a receiver as follows:
Unfortunately, present counsel, succeeding trial counsel,
has failed to appreciate the context and indeed has
mischaracterized the receiver issue as a “last minute request” by
[Karandrikas’] counsel. The most cursory review of defense
counsel’s closing argument commencing at page 602 of the Trial
Transcript reveals the question posed as being “what is an
appropriate remedy where a joint venture is broken up?”
Continuing, “. . . the simplest thing is he can dissolve it. . .” and
“. . . I am going to leave it in your hands. You heard what he
wants. And if you can do it, that would be fine. If not, we will
clearly live with whatever you decide.”
After deciding then the underlying breach of contract
action, contrary to present counsel’s statement, the Court did
explain the decision to appoint a receiver and further engaged in
a dialogue with trial counsel. The Trial Transcript pages 659 –
662 clearly set forth what occurred. Indeed, counsel for the
parties did confer and submit and suggested [a] receiver to
which trial counsel had no objection. It is true that this Court
did indicate it was not going to enter a detailed comprehensive
27 page single spaced Order detailing what the receiver is going
to do. Trial Transcript 662. This Judge, as indicated to counsel,
expected them to select a receiver knowledgeable, such as a
bankruptcy trustee, to liquidate the assets, file an accounting
and disburse whatever to who[m]ever. If present counsel’s
argument that security was not required or two appraisers were
not appointed is somehow fatal to the appointment, the simple
answer is that such can be easily remedied by setting security
and naming appraisers.
It is this Judge’s belief that the instant appeal has
absolutely no merit and is merely a delaying tactic.
Trial Court Opinion, 1/13/14, at 1–2.
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We reiterate that a timely objection is required to preserve an issue for
appeal and that issues not raised in the lower court are waived and cannot
be raised for the first time on appeal. Shelhamer, 58 A.3d at 770;
Pa.R.C.P. 227.1(b); Pa.R.A.P. 302(a).
Upon review, we conclude that Appellant waived this issue. During
closing argument, counsel for Appellant informed the trial court that
“Appellant would like to have you direct Mr. Karandrikas to make a third-
party offer in compliance with the Joint Venture agreement and see if it
works out. . . . And if you can do it, that would be fine. If not, we will
clearly live with whatever you decide.” N.T., 10/23/13, at 603–604
(emphasis supplied). In response, counsel for Karandrikas reiterated the
relief requested in the original and amended complaints: “[T]o appoint a
receiver to wind up the partnership.” Id. at 629.
After rendering its verdict in favor of Karandrikas, the trial court
addressed dissolution of the joint venture as follows:
It doesn’t take a lot of discussion. The agreement does provide
for a buyout. And if any venturer wants to proceed under the
agreement, I am not going to say no. However, this is like a
divorce. Husband and wife ain’t getting along. What am I going
to do with the house and the kids? I am going to appoint a
receiver. And so everybody knows upfront, there will be costs
paid up[ ]front. There will be a deposit made for the receiver’s
costs and expenses.
However, while I may be prepared to name a receiver, I
will give counsel the opportunity to confer and suggest a
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receiver, or, if they cannot agree, to submit the name they
would like to see as the receiver.
N.T., 10/23/14, at 660. In response, Appellant’s counsel asked a question:
“[I]f we are going to have a receiver who is going to sell the properties,
what about Sigma’s obligations to manage the three existing tenants?” Id.
at 660–661. Having agreed to “live with” whatever the trial court decided,
Appellant did not object when the trial court decided to appoint a receiver.
Thus, Appellant acquiesced in the appointment of a receiver and did not
preserve a challenge to that decision by filing a contemporaneous objection.
Shelhamer, 58 A.3d at 770; Pa.R.C.P. 227.1(b); Pa.R.A.P. 302(a).
In sum, we conclude that Appellant’s issues lack merit or are waived.
Thus, we affirm the order appointing a receiver and the judgment in favor of
Karandrikas.
Order appointing a receiver affirmed. Judgment in favor of
Karandrikas affirmed.
Judgment Entered.
Joseph D. Seletyn, Esq.
Prothonotary
Date: 10/20/2014
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