Adp, Inc. v. Morrow Motors Inc.

• Decision Date: 26 March 2009
• Docket Number: No. 863 WDA 2008.,863 WDA 2008.
• Citation: 969 A.2d 1244,2009 PA Super 52
• Parties: ADP, INC., Appellee v. MORROW MOTORS INC., t/d/b/a Morrow Ford, Appellant.
• Court: Pennsylvania Superior Court

969 A.2d 1244

2009 PA Super 52

ADP, INC., Appellee v. MORROW MOTORS INC., t/d/b/a Morrow Ford, Appellant.

No. 863 WDA 2008.

Superior Court of Pennsylvania.

Argued November 19, 2008.

Filed March 26, 2009.

John R. O'Keefe, Jr., Pittsburgh, for appellant.

Ronald G. Backer, Pittsburgh, for appellee.

BEFORE: BOWES, FREEDBERG, and POPOVICH, JJ.

OPINION BY POPOVICH, J.:

¶ 1 Appellant Morrow Motors, Inc., t/d/ b/a Morrow Ford, appeals the entry of summary judgment in the amount of $131,340.60 in favor of Appellee ADP, Inc. We reverse.

¶ 2 A review of the record discloses that the parties entered into a Master Service Agreement (hereinafter known as the MSA or the Agreement). Under the terms of the MSA, Appellee was to provide computer software and associated equipment that facilitated inventory management services for Appellant's automobile dealerships. The length of the Agreement was for a period commencing with the date it was signed on March 27, 1998, and continued until all Schedules¹ were completed, which translated into an expiration date of September 20, 2006 (e.g., Schedule 68004129—Appellant's contract to purchase equipment, software, and/or services from Appellee—commenced on September 20, 1999, and terminated eighty-four months later, i.e., September 20, 2006). Stated otherwise, Appellant was obligated to utilize Appellee's computer services for a fixed term set forth in the Agreement, as that term was extended pursuant to the Schedules. Therefore, when Appellant notified Appellee that it was terminating the MSA on March 24, 2005, Appellee filed a complaint alleging that Appellant was in default, which entitled Appellee to an early termination fee. See Appellee's Amended Complaint, 3/31/06, at ¶ 9.

¶ 3 In reply, Appellant denied entering into any Schedules extending the term of the MSA. See Appellant's Amended Answer and New Matter, 5/4/07, at ¶ 3. Appellant also alleged that it was not in default when it gave Appellee notification of not renewing the equipment lease agreements (Schedules) and the MSA. Further, Appellant asserted that the MSA and Schedules both expired in accordance with their provisions in June of 2005—the point in time when Appellee recovered "all its leased equipment (upon which the software and other computer programs were resident)," and Appellee's repossession foreclosed Appellant's exposure to liability. See Appellant's Amended Answer and New Matter, 5/4/07, at ¶¶ 15, 16.

¶ 4 After the exchange of additional pleadings, Appellee filed a motion for summary judgment resulting in a money award, which, upon Appellant's reconsideration petition, was reduced by the trial court to $131,340.60. Appellant filed a notice of appeal but no Pa.R.A.P.1925(b) statement was ordered by the trial court. Appellant raises two issues for our review, the first of which states: "The [trial c]ourt committed an error of law in granting the Motion for Summary Judgment. Genuine issues of material fact necessary for the determination of the subject of this action exist, and the [trial c]ourt improperly granted summary judgment." See Appellant's brief, at 4.

Our standard of review on an appeal from the grant of a motion for summary judgment is well-settled. A reviewing court may disturb the order of the trial court only where it is established that the court committed an error of law or abused its discretion. As with all questions of law, our review is plenary.

In evaluating the trial court's decision to enter summary judgment, we focus on the legal standard articulated in the summary judgment rule. Pa.R.C.P. 1035.2. The rule states that where there is no genuine issue of material fact and the moving party is entitled to relief as a matter of law, summary judgment may be entered. Where the non-moving party bears the burden of proof on an issue, he may not merely rely on his pleadings or answers in order to survive summary judgment. Failure of a non-moving party to adduce sufficient evidence on an issue essential to his case and on which he bears the burden of proof establishes the entitlement of the moving party to judgment as a matter of law. Lastly, we will review the record in the light most favorable to the non-moving party, and all doubts as to the existence of a genuine issue of material fact must be resolved against the moving party.

Shepard v. Temple University, 948 A.2d 852, 856 (Pa.Super.2008) (quoting Murphy v. Duquesne University, 565 Pa. 571, 777 A.2d 418, 429 (2001)). We shall now assess Appellant's contention that the trial court erred in granting Appellee's motion for summary judgment given the existence of genuine issues of material fact as to whether the parties could modify the MSA by means other than the written consent of the parties. See MSA, 3/27/98, at ¶ 21A.² In support thereof, Appellant produced the affidavit of its controller Diane Housholder, which states, as herein relevant:

1. I was employed by [Appellant] ( ["]Ron Lewis Automotive Group") as controller in April 2003.

2. In April 2003, I contacted [Appellee] in an effort to minimize [Appellant's] ongoing expenses related to the [...] MSA.

3. I was thereafter informed by [Appellee's] representatives that [Appellant] should compose and forward a notice of cancellation to [Appellee] concerning the unwanted equipment or services, that the same would be processed, honored and even that the cancellation desired could be retroactively applied.

4. On April 30, 2003, Tom Cochran, Executive Vice President of [Appellant] forwarded written notification to [Appellee's] Dealer Service Division that [Appellant] was canceling certain monthly maintenance services retroactive to May 1, 2003. A copy of the notice of termination dated April 30, 2003 is attached hereto, marked Exhibit "A" and incorporated herein.

5. [Appellee] accepted that notice and immediately thereafter informed me that it cancelled the specified service contracts retroactive to May 1, 2003, and thereafter issued credits to [Appellant] with respect to the same.

6. On March 24, 2005, I notified [Appellee's] Commercial Leasing that [Appellant's] Ron Lewis Automotive Group was not renewing or continuing the Equipment Lease and the Master Service Agreements and restated my understanding that all agreements/leases would expire July 7, 2005. A copy of the March 24, 2005 notice of termination is attached hereto, marked Exhibit "B" and incorporated herein.

7. On July 27, 2005, I was contacted by [Appellee's] representative Joe Coss who said he needed to pick up the [Appellee's] equipment on August 18, 2005. On August 18, 2005, Joe Coss of [Appellee] picked up [Appellee's] equipment from its installed location at [Appellant's] Beaver Falls, PA [location,] and also from a related installed location at [Appellant's] Ellwood City Motors in Ellwood City, PA. In addition, [Appellee] arranged to pick up the equipment from the [Appellant's] Pleasant Hills location at the same time. Copies of documentation supporting the pick up of equipment is attached hereto, collectively marked Exhibit "C" and incorporated herein.

8. On August 19, 2005, I spoke with Diane Sebastian of [Appellee] and re[-]faxed the termination letter of March 24, 2005. Sebastian indicated by phone that she would pro-[rate] the bill through July 7, 2005, all in accord with the course of performance between [Appellee] and [Appellant].

9. I sent a letter dated August 31, 2005 to [Appellee] confirming the credit to be issued on the July, 2005 invoice. A copy of the August 31, 2005 letter is attached hereto, marked Exhibit "D" and incorporated herein.

10. I sent additional correspondence to [Appellee's] representative "Jim" and restated the understanding that was reached with Diane Sebastian of [Appellee], consistent with the course of performance between [Appellee] and [Appellant], to [pro-rate] the July 2005 invoice reflecting termination of the agreements/leases. Copies of letter confirming termination and cessation of billing are attached hereto, collectively marked Exhibit "E" and incorporated herein.

11. On October 21, 2005, Allen Collins, [Appellee's] account representative for [Appellant], told me that he would correct invoices and that [Appellant] would receive no more billings from [Appellee]. Collins also told me that [Appellant] could have cancelled all remaining support [Schedules] with just 30 day[s] notice but that [Appellee] preferred 90 day[s] notice in order to have time for billing adjustment.

12. On October 31, 2005, [Appellee] issued credit adjustments to [Appellant] in the aggregate of $7,290.38 covering a variety of separate line items, including many of those for which [Appellee] seeks recovery in the within action. A copy of the credit invoices referenced herein and below are attached hereto, collectively marked Exhibit "F" and incorporated herein.

13. On November 17, 2005, [Appellee] issued four groupings of credit adjustments to [Appellant] in the amounts of $2,553.87, $2,440.86, $2,303.65 and $5,367.44; and on December 11, 2005, [Appellee] issued credit adjustments to [Appellant] in the aggregate of $4,741.93, all of which adjustment groupings included additional [...] line items for which [Appellee] currently seeks recovery. These are consistent with the communications and representations made by [Appellee].

14. [Appellant] received no additional invoices from [Appellee] following December 2005.

15. [Appellee's] recovery of its equipment from [Appellant's] custody, pursuant to the normal and regular termination of the Equipment Lease Agreement and the [MSA], had rendered impossible [Appellant's] use of any of [Appellee's] software and other programs, and particularly the upgrades, additions or deletions thereto, inasmuch as such were all resident upon the very leased equipment recovered by [Appellee] upon termination of the leases.

16. [...].

See Appellant's AFFIDAVIT OF DIANE HOUSHOLDER, 10/10/07; Record No. 27. It seems to us that, if Appellant proves the facts set out...