Justia Business Law Opinion SummariesArticles Posted in Supreme Court of Pennsylvania
United Blower, et al. v Lycoming Water & Sewer
In a case of first impression, the Pennsylvania Supreme Court granted review to determine whether the Commonwealth Court properly calculated the “cost” of steel products under the Steel Products Procurement Act (“Steel Act” or “the Act”), which required that “75% of the cost of the articles, materials and supplies [of a steel product] have been mined, produced or manufactured” in the United States. G. M. McCrossin, Inc. (“McCrossin”), a contracting and construction management firm, served as the general contractor for the Lycoming County Water and Sewer Authority (“Authority”) on a project known as the Montoursville Regional Sewer System Waste Water Treatment Plan, Phase I Upgrade (“Project”). In July 2011, McCrossin entered into an agreement with the Authority to supply eight air blower assemblies, which move air from one area to another inside the waste treatment facility. United Blower, Inc. (“UBI”), became a subcontractor on the Project. UBI was to supply the eight blowers required by the original specifications and was to replace the three digestive blowers as required by a change order. UBI prepared a submittal for the blowers which McCrossin in turn submitted to the Authority’s Project engineer, Brinjac Engineering (“Brinjac”). As part of the submittal, McCrossin provided Brinjac and the Authority with a form, which verified that 75% of the cost of the blowers was attributable to articles, materials, and supplies (“AMSs”) that were mined, produced, or manufactured in the United States. The total amount McCrossin paid UBI for the blower assemblies and digestive blowers was $239,800. The amount paid by the Authority to McCrossin for these items was $243,505. Authority employees began to question whether McCrossin and UBI provided products that complied with the Steel Act. The Supreme Court held the Commonwealth Court improperly calculated the cost of the steel products at issue, thereby reversing and remanding for further proceedings. View "United Blower, et al. v Lycoming Water & Sewer" on Justia Law
Mortimer v. McCool, et al.
In 2007, Ryan Mortimer was seriously and permanently injured when an intoxicated driver collided with her car. The driver recently had been served by employees of the Famous Mexican Restaurant (“the Restaurant”) in Coatesville, Pennsylvania. The owners of the Restaurant had a contractual management agreement with the owner of the Restaurant’s liquor license (“the License”), Appellee 340 Associates, LLC. The Restaurant was located in a large, mixed-use building owned by Appellee McCool Properties, LLC. At the time of the injury, Appellees Michael Andrew McCool (“Andy”) and Raymond Christian McCool (“Chris”) were the sole owners of 340 Associates. With their father, Raymond McCool (“Raymond”), they also owned McCool Properties. In an underlying “dram shop action,” Mortimer obtained a combined judgment of $6.8 million against 340 Associates and numerous other defendants. Under the Liquor Code, 340 Associates as licensee was jointly and severally liable for Mortimer’s entire judgment. 340 Associates had no significant assets beyond the License itself, and neither carried insurance for such actions nor was required by law to do so. Seeking to collect the balance of the judgment, Mortimer filed suit against 340 Associates, McCool Properties, Chris, Andy, and the Estate of Raymond (who died after the collision but before this lawsuit). Mortimer sought to "pierce the corporate veil" to hold some or all of the individual McCool defendants and McCool Properties liable for her judgment. While the Pennsylvania Supreme Court concluded that a narrow form of “enterprise liability” might be available under certain circumstances, it could not apply under the facts of this case: "We believe that our restrained, equitable posture toward veil-piercing cases has enabled Pennsylvania courts to do substantial justice in most cases, and that there is no clear reason to preclude per se the application of enterprise liability in the narrow form described herein." View "Mortimer v. McCool, et al." on Justia Law
Pgh. Logistics Systems, Inc. v. Beemac Trucking, et al.
Pittsburgh Logistics Systems, Inc. (“PLS”) was a third-party logistics provider that arranged the shipping of its customers’ freight with selected trucking companies. Beemac Trucking (“Beemac”) was a shipping company that conducted non-exclusive business with PLS. In 2010, PLS and Beemac entered into a one-year Motor Carriage Services Contract (“the Contract”), which automatically renewed on a year to year basis until either party terminated it. The Contract contained both a non-solicitation provision and the no-hire provision. In this appeal, the Pennsylvania Supreme Court considered whether no-hire, or “no poach,” provisions that were ancillary to a services contract between business entities, were enforceable under the laws of the Commonwealth. While the Contract was in force, Beemac hired four PLS employees. PLS sued Beemac, alleging breach of contract, tortious interference with contract, and a violation of the Pennsylvania Uniform Trade Secrets Act. PLS also sued the four former employees, alleging they had breached the non-competition and non-solicitation provisions of their employment contracts. The trial court held the worldwide non-compete clauses in the employees' contracts were “unduly oppressive and cannot be subject to equitable modification.” With respect to the contract between the companies, the trial court held the pertinent no-poach clause was void against public policy. “If additional restrictions to the agreement between employer and employee are rendered unenforceable by a lack of additional consideration, PLS should not be entitled to circumvent that outcome through an agreement with a third party.” Finding no reversible error in the trial court's judgments, the Supreme Court affirmed. View "Pgh. Logistics Systems, Inc. v. Beemac Trucking, et al." on Justia Law
Always Busy Consulting v. Babford & Company
The Pennsylvania Supreme Court granted discretionary review to consider whether a notice of appeal filed at a single docket number corresponding to the lead case of multiple consolidated civil cases should have been quashed for failing to satisfy the requirements of Pa.R.A.P. 341(a) as interpreted in Commonwealth v. Walker, 185 A.3d 969 (Pa. 2018). The Superior Court relied on Walker to quash the appeal below at one docket number, but the Supreme Court held Walker was inapplicable to the particular facts of this case and therefore reversed. View "Always Busy Consulting v. Babford & Company" on Justia Law
Wolf v. Scarnati
On March 6, 2020, in response to the COVID-19 pandemic, Pennsylvania Governor Tom Wolf issued a Proclamation of Disaster Emergency (“Proclamation”) pursuant to 35 Pa.C.S. 7301(c), a provision of the Emergency Management Services Code. This Proclamation activated many emergency resources. Days later, the Governor issued an order closing businesses that were not considered life-sustaining. Four Pennsylvania businesses and one individual challenged the Governor's Order, alleging that it violated the Emergency Management Services Code and various constitutional provisions. On April 13, 2020, in an exercise of its King’s Bench jurisdiction, the Pennsylvania Supreme Court ruled that the Governor’s order complied with both the statute and Commonwealth Constitution. On June 3, 2020, the Governor renewed the Proclamation for an additional ninety days. June 9, 2020, the Pennsylvania House of Representatives adopted a concurrent resolution to order the Governor to terminate the disaster emergency. The matter reached a loggerhead and went again before the Supreme Court. The Court issued an opinion stating "we find it necessary to make clear what this Court is, and is not, deciding in this case. We express no opinion as to whether the Governor’s response to the COVID-19 pandemic constitutes wise or sound policy. Similarly, we do not opine as to whether the General Assembly, in seeking to limit or terminate the Governor’s exercise of emergency authority, presents a superior approach for advancing the welfare of our Commonwealth’s residents." Instead, the Court decided here a narrow legal question: whether the Pennsylvania Constitution and the Emergency Services Management Code permitted the General Assembly to terminate the Governor’s Proclamation of Disaster Emergency by passing a concurrent resolution, without presenting that resolution to the Governor for his approval or veto. To this, the Supreme Court responded "no": "because the General Assembly intended that H.R. 836 terminate the Governor’s declaration of disaster emergency without the necessity of presenting that resolution to the Governor for his approval or veto, we hold, pursuant to our power under the Declaratory Judgments Act, that H.R. 836 is a legal nullity." View "Wolf v. Scarnati" on Justia Law
Rullex Co., LLC. v. Tel-Stream, Inc.
In this appeal by allowance, a covenant not to compete was executed by an employee after the first day of employment. The issue presented for the Pennsylvania Supreme Court's review was whether the employer could enforce that provision in the post-employment timeframe although no new consideration was supplied in connection with its execution. The Supreme Court concluded the trial court properly denied a motion for a preliminary injunction: there was no evidence suggesting that, as of the commencement of the employment relationship, there was a meeting of the minds as to the noncompete agreement (NCA), or that the employee otherwise manifested his assent to provisions of the NCA that he was given, or an intent to be bound by them. View "Rullex Co., LLC. v. Tel-Stream, Inc." on Justia Law
A Special Touch v. UC Tax Services
A Special Touch (Salon) was a sole proprietorship owned by Colleen Dorsey (Owner) offering nail, skin, massage, and permanent cosmetic services. After a 2014 audit, the Pennsylvania Department of Labor and Industry (Department), Office of Unemployment Compensation Tax Services (OUCTS) issued a Notice of Assessment to the Salon indicating that it owed unemployment compensation (UC) contributions and interest in the amount of $10,647.93 for the period of 2010 through the second quarter of 2014. This assessment was based on OUCTS’s determination that ten individuals providing work for the Salon had been misclassified as independent contractors rather than employees of the Salon, thus subjecting it to the UC taxes. This discretionary appeal to the Pennsylvania Supreme Court required a determination of what “customarily engaged” meant, as that term was used in Subsection 4(l)(2)(B) of the Unemployment Compensation Law (Law), 43 P.S. section 753(l)(2)(B). In particular, the Supreme Court had to determine whether the phrase required an individual to be involved in an independently established trade, occupation, profession, or business in actuality, as opposed to having the mere ability to be so involved. The Court concluded the phrase “customarily engaged” as used in Subsection 4(l)(2)(B) mandated that an individual actually be involved in an independently established trade, occupation, profession, or business. Because the Commonwealth Court reached a contrary conclusion, the Court reversed. View "A Special Touch v. UC Tax Services" on Justia Law
Friends of Danny DeVito, et al v. Wolf
Petitioners were four Pennsylvania businesses and one individual who sought extraordinary relief from Governor Wolf’s March 19, 2020 order compelling the closure of the physical operations of all non-life-sustaining business to reduce the spread of the novel coronavirus disease (“COVID-19”). The businesses of the Petitioners were classified as non-life-sustaining. In an Emergency Application for Extraordinary Relief, Petitioners raised a series of statutory and constitutional challenges to the Governor's order, contending the Governor lacked any authority to issue it and that, even if he did have such statutory authority, it violates various of their constitutional rights. Petitioners asserted the exercise of the Pennsylvania Supreme Court’s King’s Bench jurisdiction was not only warranted but essential given the unprecedented scope and consequence of the Executive Order on businesses in the Commonwealth. Exercising King's Bench jurisdiction, the Supreme Court concluded Petitioners could not establish any constitutional bases for their challenges. The claim for relief was therefore denied. View "Friends of Danny DeVito, et al v. Wolf" on Justia Law
Binswanger of PA Inc v. TSG Real Estate LLC.
TSG Real Estate, LLC (“TSG”) was a real estate company that owned a commercial property in Montgomery County, Pennsylvania (the “Property”). Initially, TSG hired New Hart Corporation d/b/a Hart Corporation (“Hart”) as its broker to market the Property. As TSG’s agreement with Hart was to expire, TSG began considering replacement brokers, one of which was Binswanger of Pennsylvania, Inc. (“Binswanger”). Two days before TSG informed Binswanger of its decision to hire it as its broker, TSG received a written offer from TWA Holdings, LLC (“TWA”) to purchase the Property for $3.7 million. TSG negotiated an agreement with Binswanger culminating in a September 27, 2013 “Exclusive Right To Sell Or Lease Agreement” (“Broker Agreement”) with Binswanger. The Broker Agreement permitted TSG to continue using other brokers in connection with any sale to TWA, and provided, inter alia, (1) if Binswanger sold the Property, it would be entitled to a 5% commission; (2) all commissions would be considered to be earned and payable “at the time scheduled for closing on a sale;” (3) a “carve-out period” which allowed that if another broker “completed” a sale, exchange, or transfer of the Property to TWA on or before January 5, 2014, Binswanger would earn no commission; (4) if another broker completed a sale of the Property to TWA after January 5, 2014, the other broker and Binswanger would split a 5% commission; and (5) the duration of the agreement was for one year; however, TSG had the right to terminate the agreement after 6 months with 30 days prior written notice to Binswanger. Two days prior to the expiration of the carve-out period contained in the Broker Agreement, TSG, via Hart and another broker, Gelcor Realty (“Gelcor”), entered into an Agreement of Sale with TWA, selling the Property for $3.4 million. In this appeal by allowance, the Pennsylvania Supreme Court considered the entitlement to broker commissions for the sale of commercial property. Applying the plain and unambiguous language of the Broker Agreement, the Supreme Court found the sale of the Property was completed at the time of closing, i.e., on April 24, 2014. As the sale was not completed on or before January 5, 2014, but only after the carve-out period had expired, Binswanger was entitled to a commission pursuant to the Broker Agreement fee schedule. View "Binswanger of PA Inc v. TSG Real Estate LLC." on Justia Law
Gamesa Energy USA, Aplt. v. Ten Penn Center, et al
In 2008, Appellants, Gamesa Energy USA, LLC and Gamesa Technology Corporation, Inc. (Gamesa), entered into a commercial lease agreement (the Lease) to rent 35,000 square feet of office space in Philadelphia (the Premises) from Appellees, Ten Penn Center Associates, L.P. and SAP V Ten Penn Center NF G.P. L.L.C. (collectively Ten Penn Center). In May 2011, following Gamesa’s submission of the information required under Article 20.2 of the Lease, Ten Penn Center approved a request to sublease approximately 15,000 square feet, or forty percent of the Premises, to Viridity Energy, Inc. (Viridity) through August of 2018. In April 2012, Gamesa informed Ten Penn Center it would be moving out of the Premises as part of a corporate consolidation, and would continue to pay its monthly rent and attempt to find a sub-lessee for the open space. Viridity remained in the Premises under the terms of its sublease with Gamesa. Gamesa was twice late with the rent after it moved out, but still paid amounts due. In 2012, Gamesa submitted a request to Ten Penn Center for consent to sublease 5,200 square feet of the Premises to Business Services International, LLC (BSI), a business entity comprised of two foreign corporations formed for the particular purpose of subleasing office space through Gamesa. Ten Penn Center responded on June 26th, informing Gamesa it was in default of the Lease for vacating the Premises and, as a result, Ten Penn Center had no obligation to entertain the request to sublease. Ten Penn Center proposed it would grant consent to the BSI sublease if Gamesa forfeited its remaining tenant improvement allowance. Thereafter, negotiations between the parties stalled, and the proposed sublease with BSI never materialized. In 2013, Gamesa filed a complaint against Ten Penn Center, asserting claims of breach of contract, tortious interference in business relationships, and unjust enrichment. The Pennsylvania Supreme Court granted discretionary review of this commercial landlord and tenant dispute to determine whether the Superior Court erred in holding the tenant was limited to damages for breach of contract and could not also recover the rent it paid following the landlord’s breach, despite prevailing on its claims for both remedies at trial. After careful review, the Supreme Court found no reversible error and affirmed the Superior Court. View "Gamesa Energy USA, Aplt. v. Ten Penn Center, et al" on Justia Law