MEMORANDUM
MURRAY, J.
At 764
WDA 2021, Alumisource Corporation (Appellant) appeals from
the denial of post-trial motions challenging the $300, 000
verdict favor of John
M. Toth (Toth or Mr. Toth) for Appellant's breach of its
consulting agreement (CA) with Toth.[1] At 807 WDA 2021, Toth and
Kantner Iron & Steel, Inc. (Kantner) (collectively
Defendants), appeal the $341, 869.07 judgment entered in
favor of Appellant for Defendants' breach of a
right-of-first-refusal agreement (ROFRA) involving
Defendants' sale of scrap aluminum to Appellant. Toth has
filed a cross-appeal at that docket number. Upon careful
review, we affirm the judgments at both dockets.
Appellant
operates an aluminum processing facility in Monessen,
Pennsylvania. Appellant purchases scrap aluminum, and after
processing and purifying the aluminum, sells the resulting
shredded aluminum to aluminum product producers. N.T.,
6/22/20, at 21-23. At all relevant times, Toth owned
Kantner and EMF Development Corp. (EMF), two businesses that
sell scrap metal. N.T., 6/25/20, at 610.
During
the fall of 2010, Appellant's president, Gabriel Hudock
(Hudock or Mr. Hudock), sought to purchase an aluminum
shredder (shredder) to meet increased demand for aluminum.
N.T., 6/22/20, at 23-32, 34-35, 63. After receiving a quote
of $1, 450, 000.00 for a new American Pulverizer shredder,
Appellant entered into negotiations with Toth for the
purchase of a used model of the same shredder. Id.
at 33-35.
The
trial court explained:
Between April and June of 2011, Mr. Hudock and Mr. Toth
negotiated for the sale of the shredder, in addition to a
proposed agreement in which Mr. Toth would offer [Appellant]
a right of first refusal to purchase aluminum scrap from his
two scrapyards. The initial agreed price to be paid by
[Appellant] was [] 2 million dollars.
After seeking financing[, Appellant] was only able to finance
75% of the purchase price, leaving a deficit of $500, 000.00
of financing; Mr. Toth offered to finance the remaining
balance. Mr. Toth and Mr. Hudock met on April 11, 2011 to
discuss the agreements further; Mr. Hudock presented Mr. Toth
with a draft [ROFRA], a draft Bill of Sale encompassing the
two million dollar agreement, and a draft [CA]. Mr. Hudock
testified to his belief that the [CA] was designed to provide
the $500, 000 in financing by Mr. Toth. Mr. Hudock further
testified that upon receiving the drafts and discussing them
with his counsel, Mr. Toth requested a $500, 000 judgment
note or loan schedule in place of the consulting agreement.
Upon further negotiations with PNC Bank, PNC agreed to
finance the entire two million-dollar transaction. As the
entire agreement was financed, Mr. Toth agreed to drop the
purchase price to $1, 900, 000.00. As negotiations continued,
Mr. Toth requested a copy of the proposed ROFRA on April 14,
2011, from Tom Adamek, [Appellant's] Chief Operations
Officer. Mr. Toth
returned the draft to Mr. Adamek with changes made by counsel
on May 5, 2011. Mr. Toth sent Mr. Hudock an email stating,
"Gabe, I cleaned up the changes you wanted and took off
the draft wording. I will get it signed and sent to you
Thursday. Thanks, John." The revised ROFRA was attached.
A further June 9, 2011, email from Mr. Toth to Mr. Hudock
stated, "Gabe, the envelope will be at the office at
Johnstown with originals. You or Keith can pick up. Please
get me one signed copy back. Thanks, John." Attached to
that email was a copy of the ROFRA agreement, executed by Mr.
Toth and witnessed.
Upon receiving this email, Mr. Hudock emailed Mr. Toth on
June 9, 2011, as follows: "John, as you know, we agreed
that the right of refusal would apply to all the yards owned
by you, not just Kantner Iron Metal. I would like the
agreement to reflect our intentions. Thanks, Gabe." Mr.
Toth replied: "Gabe, you're getting a bit paranoid.
Read paragraph 1. It gives you the right of refusal for all
of John Toth's existing facilities. I can't give you
any more than that. John." Mr. Hudock subsequently
signed the ROFRA on June 13, 2011, witnessed by Tom Adamek,
and Mr. Adamek sent him a copy of the executed ROFRA.
Approximately one week later, Mr. Toth indicated to Mr.
Hudock that he had not received the executed copy from
[Appellant], and Mr. Hudock assured Mr. Toth that he would
send an employee with a physical copy. Gray Gallo, an
[employee of Appellant], testified that Mr. Hudock gave him
an envelope to give to Mr. Toth and that he recalls doing so.
Testimony from Mr. Toth indicates that he did not bring up
the executed agreement again after this time, and an email to
Mr. Toth dated March 15, 2012, included a copy of the
executed ROFRA.
… [T]he ROFRA period extended for a term of thirty-six
(36) months, from June 9, 2011, to June 9, 2014. [Appellant]
is the identified buyer and [] Toth and Kantner are defined
as "seller." Under the ROFRA, [Appellant] is
provided the right of first refusal to purchase
"aluminum materials" from "any and all of
Seller's existing facilities." Specifically, Seller
agrees to provide [Appellant] with any third-party bona fide
offer to purchase aluminum materials, at which time
[Appellant] is provided four (4) hours to accept or reject
the offer.
Mr. Hudock testified that for the first two (2) years of the
contract term, the parties apparently complied with the ROFRA
as written, and each consummated purchase was documented in a
Purchase Order. Mr. Hudock also described a summary of
documents received from Defendants which showed sales records
to other companies, including competitors of [Appellant, ]
during the period of the ROFRA. He testified that these sales
were not offered to [Appellant] and [Appellant] would have
been interested in these sales if they had been offered
pursuant to the ROFRA.
Regarding the [CA], … Mr. Hudock testified that he
never requested that Mr. Toth actually become a consultant
for [Appellant]. [Mr. Hudock] testified, however, that he did
sign the [CA] at Exhibit D. He stated he believed the
contract was aborted by oral agreement and/or the final
agreement of sale for the shredder.
Trial Court Opinion, 1/15/21, at 2-6 (citations omitted,
emphasis added). At trial, Hudock further testified that in a
December 12, 2012, email, Toth offered to sell Appellant
"irony" aluminum. See N.T., 6/22/20, at
83; Exhibit 11. According to Hudock, this was the first offer
under the ROFRA from Toth to Appellant. Id. at 84.
On
November 14, 2014, Appellant filed a complaint against
Defendants in Westmoreland County, Pennsylvania, alleging
breach of the ROFRA (the ROFRA case). Complaint, Westmoreland
County Docket No. 5664 of 2014.
On
April 6, 2018, in Somerset County, Pennsylvania, Toth filed a
complaint alleging breach of his consulting agreement with
Appellant and for
unjust enrichment (the CA case).[2] Complaint, Somerset County
Docket No. 188 of 2018. Appellant filed an answer and new
matter demurring to Toth's complaint in the CA case, and
further asserting Toth's contract action is barred by the
statute of limitations. On July 17, 2018, Appellant filed a
motion for judgment on the pleadings in the CA case. Motion,
7/17/18. On November 9, 2018, the Somerset court granted in
part and denied in part Appellant's motion. The court
concluded Toth sufficiently pled a prima facie cause
of action for breach of the CA. Somerset Court Opinion,
11/9/18, at 9. The Somerset court further stated:
[The court] find[s] the [CA] is an installment contract that
contemplates periodic payments of $100, 000.00 on April 15 of
the years 2012, 2013, 2014, 2015 and 2016.FN
Following this, it is apparent that, applying the four-year
statute of limitations for causes of action based on
contracts, the payments for the years 2012 and 2013 are
outside the limitations period and are time-barred. The
payments due in 2014, 2015, and 2016 are actionable if
the [CA] was still in effect during those
times. It is this point [Appellant] address[es] in [its]
second argument, discussed below.
FN [Appellant] dedicated much of its Reply
… [to] discussing the doctrine of "continuous
contracts" and how, due to the fixed date of periodic
payments in the Agreement, the doctrine is inapplicable in
the instant matter. [The court] generally agree[s] with
[Appellant] on this limited point. However, from [Toth's]
Brief, and from representations made at oral argument on the
[motion for judgment on the pleadings, the court] believe[s
Toth's] primary argument is rather that the [CA] is an
installment contract, which invokes a distinct set of
principles, namely that each failure to pay an installment is
a separate breach and cause
of action, with a separate, concomitant, four-year
limitations period.
[Appellant] asserts, and [Toth] admits, that the parties did
not communicate after July 2013. Answer and New Matter ¶
32; Reply to New Matter ¶ 32. [Appellant] argues that,
because all communication, and thus all possibility of
service, ceased in July 2013, the contract should be treated
as terminated as of that date, and the limitations period
would have begun then, ending in July 2017. [Appellant's]
Rely Brief [at] 5-7. …
Somerset...