DeMuth v. Miller

• Decision Date: 11 January 1995
• Citation: 652 A.2d 891,438 Pa.Super. 437
• Parties: , 67 Empl. Prac. Dec. P 43,920 Donald L. DeMUTH, Appellee, v. Daniel C. MILLER, Appellant.
• Court: Pennsylvania Superior Court

Page 891

652 A.2d 891

438 Pa.Super. 437, 67 Empl. Prac. Dec. P 43,920

Donald L. DeMUTH, Appellee, v. Daniel C. MILLER, Appellant.

Superior Court of Pennsylvania.

Argued June 21, 1994.

Filed Jan. 11, 1995.

[438 Pa.Super. 439] Beatrice Dohrn, New York City, for appellant.

Samuel L. Andes, Lemoyne, for appellee.

Before OLSZEWSKI, POPOVICH and JOHNSON, JJ.

POPOVICH, Judge:

This case involves an appeal from the order (reduced to judgment) of the Court of Common Pleas of Cumberland County denying a motion for judgment notwithstanding the verdict and a new trial by the defendant/appellant, Daniel C. Miller. We affirm.

The facts, viewed in a light most favorable to the verdict-winner and granting all reasonable inferences to be drawn therefrom, reveal that the defendant was hired by the plaintiff, Donald L. DeMuth, in December of 1985 as an independent contractor to do accounting work. In May of 1986, the defendant became an employee of the DeMuth firm as a professional management consultant and signed an employment contract to that effect for one year (June 1, 1986, to May 31, 1987). This business relationship was renewed on a fiscal basis for each of the next four years, but executed copies of employment contracts could be produced for only two of those years. More specifically, the plaintiff could not locate, but recalls signing, a contract dated May 31, 1989, and expiring June 1, 1990. Each of the contracts, save for 1986, contained the following language:

8. Contingent Note Payable: If within five years of the termination of this Agreement if the Employee terminates the Agreement or the Employer terminates the Agreement for cause, and the Employee establishes a professional management consulting or accounting firm within a 50-mile radius of any of Employer's current or former clients, he agrees to pay the Employer 125% of the previous 12 months' charges for each of the employer's clients who retain his professional management consulting or accounting services. Cause shall include, but is not limited to, moral turpitude, being charged with a felony, use of illicit drugs, intoxication while working, insulting Employer's family and clients, not working, intentionally working slowly, intentionally losing clients, engaging in See Paragraph 8, Reproduced Record at 13a.

sexual activities in the office, and homosexuality.

On October 17, 1990, the plaintiff called the defendant into the office and terminated his employment because of his appearance on a Harrisburg television station representing a gay and lesbian coalition in violation of Paragraph 8. After leaving the plaintiff's employ, the defendant opened a competing consulting firm and solicited the plaintiff's clients, some of whom (17 in number) changed their business allegiance to the defendant. Once the plaintiff learned of this, the defendant was notified that such conduct violated the employment agreement. See Paragraph 8, supra.

When the defendant refused to compensate the plaintiff for the loss of business, a two-count complaint sounding in contract and misappropriation of the plaintiff's property rights was filed seeking judgment in excess of $120,000.00. The defendant's reply was an answer denying, inter alia, the existence of a written contract for the last year of his employment, thus negating the effectiveness of Paragraph 8. Under new matter, the defendant averred that his dismissal was premised upon the "homosexual" provision of the employment contract and his television interview concerning a controversial issue (gay and lesbian bashing), the former of which was violative of public policy.

In a counterclaim, the defendant alleged that he had been: wrongfully discharged for appearing on television in support of gay/lesbian rights; defamed when the plaintiff communicated to third parties that he was gay and at the risk of AIDS if a continuing work relationship was contemplated; and contractually interfered with by the plaintiff as to clients.

At the commencement of trial, the defendant argued a motion in limine to exclude any testimony by the plaintiff that the contract continued in effect until the termination date (October 17, 1990) on the ground that "there was a judicial admission in the [plaintiff's] pleadings that it had not been renewed." The plaintiff countered that the provision allowing dismissal for "homosexuality" persisted because of the dealings of the parties. The court agreed with the plaintiff and allowed testimony on the parties' business dealings post-May 31, 1989.

The parties stipulated that damages did not exceed (under the 125% provision of actual loss) $110,000.00 and the defendant's wrongful discharge claim was excluded on the plaintiff's motion for compulsory non-suit. Thereafter, in answer to special interrogatories, the jury held that the parties were bound by the terms of the 1990 Agreement as a consequence of their post-1989 conduct leading up to and encompassing the defendant's dismissal (October 17, 1990). Damages were awarded (and later molded by the court) in the amount of $110,000.00. Post-trial motions were denied. This appeal followed and raises three issues, the first of which to be addressed concerns the allegation that the trial court erred in allowing the plaintiff to present evidence in support of his contractual claim when the plaintiff had "judicial[ly] admi[tted] in his complaint that the employment agreement ... was not renewed or extended at its expiration on May 31, 1990."

It is well established that a judicial admission is an express waiver made in court or preparatory to trial by a party or his attorney, conceding for the purposes of trial, the truth of the admission. Jewelcor Jewelers & Distributors, Inc. v. Corr, 373 Pa.Super. 536, 542, 542 A.2d 72, 75 (1988). It has the effect of a confessory pleading, in that the fact is thereafter to be taken for granted, so that the opposing party need offer no evidence to prove it and the party by whom the statement was made is not allowed to disprove it. Jewelcor Jewelers, supra, at 542, 542 A.2d at 75. A principal element of a judicial admission is that the fact has been admitted for the advantage of the admitting party, and consequently, a judicial admission cannot be subsequently contradicted by the party that made it. Jewelcor Jewelers, supra, at 543; 542 A.2d at 76. As our Supreme Court stated:

Pennsylvania has followed this rule since Wills v. Kane, 2 Grant 60, 63 (Pa.1853), where the court insisted: "Where a man Jewelcor Jewelers, supra, at 542; 542 A.2d at 75 (quoting Tops Apparel Mfg. Co. v. Rothman, 430 Pa. 583, 587-88 n. 8, 244 A.2d 436, 438 n. 8 (1968) (emphasis added).

alleges a fact in a court of justice, for his advantage, he shall not be allowed to contradict it afterwards. It is against good morals to permit such double dealing in the administration of justice."

Nasim v. Shamrock Welding Supply Co., 387 Pa.Super. 225, 563 A.2d 1266, 1267-1268 (1989) (Emphasis added in part).

In the present case, we hold that the averment of fact contained in Paragraph 5 of the plaintiff's complaint (i.e., the employment contract "was not renewed or extended at its expiration on 31 May 1990") did not constitute a judicial admission as the averment was not advantageous to the plaintiff when viewed in the context of the remaining allegations and damages sought to be recouped. In pertinent part, the complaint reads:

4. Pursuant to an Employment Agreement dated 31 May 1989, Plaintiff employed Defendant. A copy of said Employment Agreement is attached hereto and marked as Exhibit A.

5. The Employment Agreement between the parties was not renewed or extended at its expiration on 31 May 1990.

6. Following the expiration of the Employment Agreement between the parties, Defendant continued to be employed by Plaintiff and continued to be paid a salary and other compensation for such employment.

7. On 17 October 1990, Plaintiff terminated Defendant's employment.

8. Following termination of his employment, Defendant solicited a large number of the clients served by Plaintiff's business during the time that Defendant was employed in that business, suggesting and requesting that those clients terminate the services of Plaintiff and retain Defendant to provide those professional services to the clients in the future.

9. As a result of Defendant's solicitation of and contacts with Plaintiff's clients following the termination of Defendant's employment by Plaintiff, several of Plaintiff's clients have terminated Plaintiff's services. Plaintiff believes that many of those clients have now retained the services of Defendant and that Defendant is providing professional accounting and business management services to those clients.

COUNT I

CONTRACT CLAIM

10. ...

11. To the extent that the Employment Agreement of 31 May 1989 was in effect in October of 1990, Defendant is bound and obligated by the terms of that agreement.

12. Defendant's employment with Plaintiff was terminated by Plaintiff for cause as such cause is defined in Paragraph 8 of said agreement.

13. Pursuant to Paragraph 8, Defendant owes Plaintiff a sum of money equal to 125 percent of the previous twelve months' charges for each of Plaintiff's clients who retained Defendant to provide professional services for them following his termination.

14. Plaintiff believes that the clients of Plaintiff who are now served by Defendant are those clients listed on Exhibit B which is attached hereto. The previous twelve months' charges for each of those clients is set out next to the clients name on said schedule and totals $98,918.75.

15. Pursuant to Paragraph 8 of the Employment Agreement between the parties, and to the extent said Employment Agreement was still in effect and still binding as of October, 1990, Plaintiff owes Defendant the sum of $123,648.43.

16. Defendant is indebted to Plaintiff in the sum of $123,648.43. Despite repeated demands by Plaintiff, Defendant had failed and...