J-S38031-24
NON-PRECEDENTIAL DECISION - SEE SUPERIOR COURT O.P. 65.37
JOHN CARDULLO & SONS, INC. : IN THE SUPERIOR COURT OF : PENNSYLVANIA : v. : : : THOMAS CAVELLA AND ALLSTATE : FUEL OIL, LLC : : No. 3138 EDA 2023 : APPEAL OF: THOMAS CAVELLA :
Appeal from the Judgment Entered January 8, 2024 In the Court of Common Pleas of Delaware County Civil Division at No(s): CV-2018-001257
BEFORE: STABILE, J., BECK, J., and STEVENS, P.J.E.*
MEMORANDUM BY STEVENS, P.J.E.: FILED DECEMBER 26, 2024
Thomas Cavella (“Appellant”) appeals the judgment entered by the
Court of Common Pleas of Delaware County following a non-jury trial in this
action filed by Appellee John Cardullo & Sons, Inc. (“Cardullo”). The trial court
found in favor of Cardullo on both Cardullo’s breach of contract claim and
Appellant’s counterclaim for breach of contract. We affirm.
On September 15, 2016, Appellant entered into an Asset Purchase
Agreement to sell his home heating oil delivery business, Oil Depot, Inc. to
Cardullo for $131,000. Notes of Testimony (N.T.), 4/19/23, at 31. As a
condition to the Purchase Agreement, the parties also entered a Consulting
and Non-Competition Agreement to “ensure the elimination of competition
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* Former Justice specially assigned to the Superior Court. J-S38031-24
from [Appellant] and for providing assistance in maintaining the business that
was purchased.” Consulting and Non-Competition Agreement, at 2. This
agreement required Appellant to (1) submit to a non-competition provision
period of seven years and (2) advise and assist Cardullo in running the
business for two years. In exchange, Cardullo paid Appellant $75,000
($37,500 for the non-competition provision and $37,500 for consulting) and
agreed to pay Appellant deferred compensation for a two-year period from
September 15, 2016 through September 15, 2018 at a rate of $0.20 per gallon
delivered to Oil Depot customers. The Consulting and Non-Competition
Agreement provided that Cardullo would pay the deferred compensation on a
yearly basis, on September 15, 2017 and September 15, 2018, respectively.
On February 18, 2018, Cardullo filed a complaint, alleging that Appellant
had violated the parties’ non-competition agreement by working for Cardullo’s
competitor, Allstate Fuel Oil, LLC (“Allstate”). On February 27, 2018, Cardullo
filed a request for a preliminary injunction to enjoin Appellant from taking any
further action in violation of the parties’ agreement.
On March 2, 2018, the Honorable Chad F. Kenney entered an order
prohibiting Appellant from driving an oil delivery vehicle or working for an oil
delivery company in violation of the parties’ non-competition agreement. On
May 11, 2018, the trial court entered a stipulated order which again provided
that during the litigation, Appellant was not permitted to drive an oil delivery
truck or work for an oil delivery company and further was prohibited from
disparaging Cardullo.
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Cardullo filed an amended complaint on March 3, 2018, and a second
amended complaint on April 17, 2018, which included claims of breach of
contract and conversion against Appellant as well as a claim for Tortious
Interference with Contractual Relations against Allstate.1 In response,
Appellant filed a counterclaim alleging that Cardullo had breached the
Consulting and Noncompetition Agreement by failing to employ him as a
delivery truck driver and this material breach excused him from further
performance under the contract.2 Appellant also asserted that he was still
owed compensation for consulting fees under this agreement.
The parties proceeded to a bench trial which was held on April 19-20,
2023. Cardullo presented the testimony of its manager, Carl Forcillo, who
signed both the Asset Purchase Agreement and the Consulting and Non-
Competition Agreement, as well as Michael Steiner, president of Service
Energy, Cardullo’s parent company. Notes of Testimony (N.T.), 4/19/23, at
21-23, 83-84.
1 Cardullo eventually withdrew the conversion count against Appellant and the
claim of Tortious Interference with Contractual Relations against Allstate. 2 Appellant subsequently filed a separate action against Cardullo and its
personnel, Service Energy, LLC (Cardullo’s parent company) and HR Phillips (docketed at CV-2019-004082) raising claims of Voidable Transfer, Unjust Enrichment, Employee Retaliation, Successful Liability by De Facto Merger, Pierce of Corporate Veil, Civil Conspiracy, and Abuse of Process. On March 13, 2020, the two cases were consolidated. On September 20, 2022, the parties stipulated to the dismiss of the claims of Voidable Transfer, Unjust Enrichment, Employee Retaliation, Successful Liability by De Facto Merger, Pierce of Corporate Veil, Civil Conspiracy, and Abuse of Process. On September 27, 2022, the trial court granted summary judgment against Appellant on his claims of Civil Conspiracy and Abuse of Process.
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Forcillo explained that the non-competition agreement was necessary
because Cardullo was spending “a lot of money for [Appellant’s] clients and
customers so we didn’t want [Appellant] to just go back out and get in a truck
and take the business back.” Id. at 26. Steiner, who had drafted the
Consulting and Noncompetition Agreement, echoed these sentiments and
indicated that the purchase of Appellant’s business included his customer lists,
contacts, and reputation. Id. at 87. As such, Steiner indicated that Cardullo’s
purpose in having Appellant sign the Consulting and Non-Competition
Agreement was for Appellant to assist with any questions Cardullo would have
regarding the business, but more importantly, to restrict Appellant from
competing against Cardullo and taking back its customers. Id.
Although the Consulting and Non-Competition Agreement provided that
Appellant’s deferred compensation would be paid out on a yearly basis, Forcillo
admitted that Appellant was paid quarterly in the first year as “things were
going well, we were getting along.” Id. at 28. Thus, in addition to the
$131,000 payment under the Asset Purchase Agreement and the $75,000
combined payment for the consulting and non-competition agreement,
Appellant was paid quarterly deferred compensation payments in 2017 which
totaled $136,595.92.
Cardullo was also willing to employ Appellant periodically as an oil truck
driver at a rate of $30/hour when he wished to work as Appellant had
extensive experience and Cardullo was always in need of good drivers. Id. at
34, 87. Both Forcillo and Steiner denied that the non-competition agreement
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contained any provision that guaranteed Appellant employment with Cardullo
and indicated that they would not guarantee employment to any individual.
Id. at 24.
As such, after the parties signed the Consulting and Non-Competition
Agreement, Appellant drove an oil truck for Cardullo for a few weeks before
he decided to relocate and use the money from the sale of Oil Depot to invest
in new business ventures, including a mobile cryogenic machine, a health spa
in Rehoboth Beach, Delaware, and a restaurant in Cape May, New Jersey. Id.
at 38. From November 2016 to October 2017, Appellant did not ask for any
opportunities to drive an oil truck for Cardullo; Forcillo believed that Appellant
“left the oil business for good and was doing his own businesses.” Id. at 38.
Forcillo asserted that although the parties worked together amicably in
the first year, the business relationship became strained in the second year of
the contract. Id. at 95. The parties do not dispute that Appellant’s business
ventures failed and Appellant spent the entire $344,000 that he had been paid
by Cardullo. N.T. 4/20/23, at 137-38.
When Appellant returned to the area in November 2017, he sent Forcillo
a series of emails demanding that Cardullo fire its office employee, Rebecca
McNeal, who was Appellant’s former girlfriend. N.T. 4/19/23, at 42-44. In the
first email, Appellant told Forcillo “within 24 hours you need to buy Oil Depot
outright or get rid of the cancer, Becky.” Id. at 44. Appellant also threatened
“[g]et rid of Becky and we can continue on, or we can fight it out in court, and
in the street. I will be back in a truck.” Id. In the second email, Appellant
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told Forcillo, “Becky goes ASAP or pay me out fully, or I start taking Oil Depot
back procedure.” Id. at 45.
Forcillo did not fire Ms. McNeal or respond to any of Appellant’s emails.
Id. at 45-46. After Forcillo shared Appellant’s emails with Ms. McNeal, she
filed for a restraining order against Appellant. Appellant sent Forcillo a third
email, expressing anger that his emails were shared with Ms. McNeal and
indicating that he was “going in a truck, possibly tomorrow” because of
Forcillo’s “actions handling this gross, disgusting matter,” referring to Forcillo’s
refusal to fire Ms. McNeal. Id. at 46.
Shortly thereafter, Forcillo learned that Appellant was in fact driving an
oil delivery truck in violation of the parties’ noncompetition agreement. Id.
at 48. As such, Cardullo hired private investigators who surveilled Appellant
making numerous oil deliveries for Cardullo’s competitor, Allstate, in Delaware
County on January 25, 2018, January 30, 2018, and February 2, 2018. Id.
at 48-49; Cardullo Exhibit 8. Forcillo also discovered that Appellant had
created social media posts, attacking Cardullo and accusing it of selling
customers bad oil. Id. at 90-92, 154. Cardullo presented evidence of a
Facebook Live video in which Appellant can been seen eating a check made
out to Cardullo. Id. at 54-57.
Although Cardullo had paid in full Appellant’s consulting fees in 2017,
Cardullo stopped making the quarterly payments of deferred compensation to
Appellant after he sent the aforementioned emails and was suspected of
working for Cardullo’s competitor. Id. at 79. Steiner indicated that the
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quarterly payments had been made to Appellant in good faith in the first year
when the parties were cooperating, but after Appellant conducted himself in
this manner, Steiner indicated that the “were so many reasons not to extend
the good faith.” Id. at 151.
Appellant testified on his own behalf, admitting that he had signed a
contract agreeing to be a consultant to Cardullo, but accused Cardullo of
altering the contract that Appellant had signed by deleting the portion of the
contract that guaranteed Appellant employment as a truck driver for $30/hour
for two years. Id. at 231-32. Appellant denied that he signed the contract
which Cardullo presented at trial as it did not contain the alleged employment
provision. Id. at 230.
Appellant admitted that he drove an oil delivery truck for Allstate in
violation of his noncompetition agreement as early as December 13, 2017 and
continued to drive for Allstate until he was prohibited to do so by the court
order entered on March 2, 2018. Id. at 257; N.T. 4/20/23, at 114. Appellant
admitted that he delivered 125,000 gallons of oil for Allstate to multiple
individuals, including former Oil Depot customers. N.T. 4/19/23, at 260; N.T.
4/20/23, at 114.
Appellant believed that Cardullo breached the parties’ contract when it
stopped providing Appellant quarterly payments in the second year of the
contract. N.T. 4/20/23, at 121. Appellant asserted that Cardullo breached
the parties’ contract first, which excused his later by violating his non-
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competition agreement. In his counterclaim against Cardullo, Appellant
claimed that he was owed over $768,727.18 in damages.
However, Appellant admitted that the parties’ contract provided that the
consulting fees would be paid on a yearly basis and Appellant conceded that
he did not give Forcillo anything in exchange for an oral modification of the
contract to require quarterly payments. N.T. 4/19/23, at 239; N.T. 4/20/23,
at 143-44.
After trial, the trial court permitted the parties to submit briefs and
proposed findings of fact. On November 3, 2023, the trial court issued an
order and opinion finding in favor of Cardullo on its breach of contract claim
and awarded Cardullo $30,000.00 in reasonable attorney’s fees, but did not
award any further damages. The trial court found in favor of Cardullo on
Appellant’s counterclaim for breach of contract.
On November 13, 2023, Appellant filed post-trial motions, which the
trial court subsequently denied on December 11, 2023. On December 13,
2023, Appellant filed the instant appeal, purporting to appeal from the trial
court’s order denying his post-trial motions when a final judgment had not
been entered on the docket.
On January 8, 2024, this Court entered an order directing Appellant to
praecipe the trial court to enter judgment on the decision of the trial court.
The entry of an appropriate judgment is a prerequisite to this Court’s exercise
of jurisdiction. Johnston the Florist, Inc. v. TEDCO Const. Co., 657 A.2d
511, 514 (Pa.Super. 1995) (en banc). “[J]urisdiction in appellate courts may
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be perfected after an appeal notice has been filed upon the docketing of a final
judgment.” Id. at 513.
Appellants complied with this Court’s order and provided this Court with
a certified copy of the trial court docket reflecting that judgment had been
entered on January 8, 2024. We may proceed to review the merits of the
instant appeal.
Appellant raises the following issues for our review on appeal:
A. Did the lower court abuse its discretion or commit error of law [sic] by ruling against [Appellant] regarding [Appellee’s] Count I – Breach of Contract claim against [Appellant]?
B. Did the lower court abuse its discretion or commit error of law [sic] by ruling against [Appellant] regarding [Appellant’s] Breach of Contract counterclaim against [Appellee]?
Appellant’s Brief, at 29.
In reviewing a non-jury verdict, our standard of review is as follows:
Our appellate role in cases arising from non-jury trial verdicts 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 the trial court must be given the same weight and effect on appeal as the verdict of a jury. We consider 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. However, where the issue concerns a question of law, our scope of review is plenary.
The trial court's conclusions of law on appeal originating from a non-jury trial are not binding on an appellate court because it is the appellate court's duty to determine if the trial court correctly applied the law to the facts of the case.
El-Gharbaoui v. Ajayi, 260 A.3d 944, 958 (Pa.Super. 2021) (brackets and
citation omitted).
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We further emphasize that:
the factfinder is free to believe all, part, or none of the evidence, and the Superior Court will not disturb the trial court's credibility determinations. Assessments of credibility and conflicts in evidence are for the trial court to resolve; this Court is not permitted to reexamine the weight and credibility determinations or substitute our judgments for those of the factfinder.
O.H. Bel Air Partners LP v. Hinton, 296 A.3d 1173, 1175 (Pa.Super. 2023)
(quoting Gutteridge v. J3 Energy Grp., Inc., 165 A.3d 908, 916 (Pa. Super.
2017)).
Appellant offers related and jumbled arguments for both of his claims in
his appellate brief. However, we are able to discern the arguments that he
wishes to set forth on appeal.
In challenging the trial court’s ruling in favor of Cardullo on its breach
of contract claim, Appellant asserts that the lower court did not explain why it
found Appellant in breach of contract. However, the trial court specifically
found that it was “undeniable” that Appellant had breached the Consulting and
Non-Competition Agreement by admittedly driving an oil delivery truck for
Cardullo’s competitor, Allstate. Trial Court Opinion, 3/15/24, at 10. The trial
court also found that Carl Forcillo credibly testified that Appellant had made
disparaging comments about Cardullo in accusing them of delivering bad oil.
Although Appellant concedes that he worked for Cardullo’s competitor
in violation of his non-compete covenant, Appellant attempts to excuse this
breach of the parties’ contract by arguing that Cardullo breached the parties’
contract first by failing to employ him as an oil delivery truck driver at a rate
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of $30/hour. Appellant also argues that Cardullo failed to adequately
compensate him in consulting fees in the first year of the contract when it did
not include all the Oil Depot customers in the calculation of his deferred
compensation. Appellant also argues that he was not paid consulting fees for
the second year of the contract. Appellant claims Cardullo’s failure to provide
him with employment and adequately calculate his deferred compensation
should have been characterized as a material breaches of the contract, which
in turn relieved Appellant of his obligation to comply with his non-competition
restriction and the contract in general.
In reviewing the parties’ contract, we recognize that:
The fundamental rule in interpreting the meaning of a contract is to ascertain and give effect to the intent of the contracting parties. The intent of the parties to a written agreement is to be regarded as being embodied in the writing itself. The whole instrument must be taken together in arriving at contractual intent. Courts do not assume that a contract's language was chosen carelessly, nor do they assume that the parties were ignorant of the meaning of the language they employed. When a writing is clear and unequivocal, its meaning must be determined by its contents alone.
Sunoco (R&M), LLC v. Pennsylvania Nat'l Mut. Cas. Ins. Co., 322 A.3d
930, 940 (Pa.Super. 2024) (citation omitted).
We recognize that “[e]very contract imposes a duty of good faith and
fair dealing on the parties in the performance and the enforcement of the
contract.” J.J. DeLuca Co. v. Toll Naval Assocs., 56 A.3d 402, 412
(Pa.Super. 2012) (quoting Giant Food Stores, LLC v. THF Silver Spring
Dev., L.P., 959 A.2d 438, 447–48 (Pa.Super. 2008)).
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Our courts have “long recognized the established precept of contract law
that a material breach of a contract relieves the non-breaching party from any
continuing duty of performance thereunder.” LJL Transp., Inc. v. Pilot Air
Freight Corp., 599 Pa. 546, 560, 962 A.2d 639, 648 (2009) (citing
Berkowitz v. Mayflower Securities, 455 Pa. 531, 534–535, 317 A.2d 584,
586 (1974) (citing 6 Williston, A Treatise on The Law of Contracts, § 8[64]
(3d.ed. 1962)). In the same manner, “[a] party also may not insist upon
performance of the contract when he himself is guilty of a material breach of
the contract.” Int'l Diamond Importers, Ltd. v. Singularity Clark, L.P.,
40 A.3d 1261, 1270 (Pa.Super. 2012) (quoting LJL Transport, Inc., 599 Pa.
at 560, 962 A.2d at 648). When “a breach constitutes a material failure of
performance, then the non-breaching party is discharged from all liability
under the contract.” True R.R. Assocs., L.P. v. Ames True Temper, Inc.,
152 A.3d 324, 340 (Pa.Super. 2016) (citation omitted).
In evaluating whether a breach is “material,” our courts have analyzed
the relevant circumstances pursuant to the Restatement (Second) of
Contracts § 241 (1981), which sets forth the following factors to guide the
inquiry:
a) the extent to which the injured party will be deprived of the benefit which he reasonably expected;
b) the extent to which the injured party can be adequately compensated for that part of the benefit of which he will be deprived;
c) the extent to which the party failing to perform or to offer to perform will suffer forfeiture;
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d) the likelihood that the party failing to perform or offer to perform will cure his failure, taking account of all the circumstances including any reasonable assurances;
e) the extent to which the behavior of the party failing to perform or offer to perform comports with standards of good faith and fair dealing.
Int'l Diamond Importers, Ltd., 40 A.3d at 1271.
We first evaluate Appellant’s claim that Cardullo failed to abide by a
provision in the Consulting and Non-Competition Agreement that guaranteed
Appellant employment as an oil truck delivery driver at a rate of $30/hour.
Appellant accused Cardullo of deleting that provision from the contract after
he signed it and presenting a fraudulent version of the contract at trial.
The trial court found Appellant’s testimony was not credible and noted
that Appellant was unable to present a writing memorializing the purported
agreement to guarantee Appellant employment as an oil truck delivery driver
during the contractual period. In contrast, the trial court found that Forcillo
and Steiner credibly testified that Appellant was never guaranteed
employment as an oil delivery truck driver in any of the parties’ contact.
Forcillo and Steiner denied that they would ever make such a promise to any
employee. We will not disturb the credibility findings of the trial court, who
was free to believe all, part, or none of the evidence. See O.H. Bel Air
Partners LP, 296 A.3d at 1175.
Appellant also contends that he was excused from complying with his
non-competition agreement as Cardullo failed to pay Appellant for all the sums
he was owed under the parties’ contract, including consulting fees for the
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second year of the contracting period and the inclusion of the Gold Medal
account in the calculation of all the consulting fees.
Appellant suggests that Cardullo committed a material breach of the
parties’ contract when it chose not to pay Appellant quarterly consulting fees
in the second year of the parties’ contract. However, we agree with Cardullo
that there was no provision in the Consulting and Non-Competition Agreement
that required Cardullo to provide Appellant quarterly payments for his
consulting fees. As noted above, the contract only required that Appellant be
given a yearly payment at the conclusion of each consulting year, on
September 15, 2017 and September 15, 2018, respectively.
Our review of the record shows that despite this contractual provision
requiring one payment at the completion of Appellant’s first year of consulting,
Competition Agreement, Cardullo chose to extend Appellant good faith and
paid Appellant quarterly payments during the first year as the parties’
arrangement “was going well.” Thus, as of September 17, 2017, Cardullo had
paid Appellant’s consulting fees in full. Appellant did not contest the amount
of consulting fees paid in the first year of the contractual period.
To the extent that Appellant argues that there was a subsequent oral
modification of the parties’ agreement that would have required Cardullo to
make quarterly payments of Appellant’s consulting fees, Appellant admitted
at trial that he did not provide any consideration to support such an
amendment to the parties’ contract that would be binding on Cardullo. As
such, there is no support for Appellant’s claim that Cardullo was liable for
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breach of contract when it declined to make quarterly consulting fee payments
to Appellant in the second year of the contract.
The record shows that Cardullo’s personnel declined to continue the
quarterly consulting payments after Appellant sent menacing emails
demanding that Cardullo fire his former girlfriend and Appellant threatened to
work for a competitor if his demands were not met. Cardullo refused to pay
Appellant any further consulting fees after obtaining proof that Appellant had
in fact been delivering oil for its competitor.
Appellant does not challenge Cardullo’s argument, which it made
repeatedly prior to, during, and after trial, that Appellant’s conduct in working
for Cardullo’s competitor constituted a material breach of the parties’ contract
that excused Cardullo from further performance of the entire contract, i.e.,
payment of consulting fees to Appellant for the second year of the agreement.
With respect to Appellant’s claim that Cardullo underreported his
consulting fees by failing to include oil deliveries to the Gold Medal account,
Cardullo’s personnel contended that Appellant was not entitled to be paid for
deliveries to Gold Medal, who was Cardullo’s customer before the parties
signed the relevant contracts in September 2016. We reiterate that the trial
court, as factfinder, was free to accept their testimony as credible.
Therefore, we conclude that the trial court correctly determined that
Appellant had not been excused from his contractual duty not to compete with
Cardullo under the Consulting and Non-Competition Agreement when he
delivered oil on behalf of Cardullo’s competitor in breach of this agreement.
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In the alternative, Appellant argues that even if he was found to have
breached the parties’ contract, Appellant asserts that there is no proof that
his conduct caused damages to Cardullo. Appellant contends that Cardullo
failed to show that Appellant in any way diverted customers from Cardullo or
that Cardullo suffered any financial loss during the second contract year.
Appellant contends that Cardullo failed to produce the testimony of any Oil
Depot customers to corroborate Cardullo’s allegations and did not identify the
actual adverse statements which Appellant was alleged to have made to Oil
Depot customers. Thus, Appellant argues that any damages flowing from his
alleged breach of the parties’ contract were completely speculative.
As noted above, the trial court only awarded Cardullo $30,000 in
attorney’s fees for his breach of the non-competition provision and agreed
with Appellant that Cardullo was not entitled to further damages as Cardullo
had failed to meet its burden to prove its alleged losses during the contract
period with reasonable certainty.
The trial court explained that it awarded Cardullo attorney’s fees under
the express language of the parties’ contract which provided that:
For any violation of this Agreement, in addition to any other rights and remedies Cardullo may have at law or in equity including, without limitation, the recovery of damages, Cardullo may obtain a restraining order or an injunction or both in order to restrain violation of the terms and conditions set forth herein. In the event of any breach by [Appellant] of this Agreement, [Appellant] shall pay all costs incurred by Cardullo in connection with said breach and/or the enforcement of this Agreement, including reasonable attorney’s fees and costs.
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Consulting and Non-Competition Agreement, at 2-3, ¶ 9 (emphasis added).
Accordingly, we conclude that the trial court properly awarded Cardullo
attorney’s fees in this case.
Further, Appellant argues that the trial court erred in denying his
counterclaim for breach of contract by reiterating the same claims that 1)
Cardullo breached its contract to employ Appellant as an oil truck driver at a
rate of $30/hour during the consulting period, 2) Cardullo underreported his
consulting fees by failing to include Gold Medal as a former Oil Depot
consumer, and 3) Cardullo’s personnel gave testimony that should not have
been believed.
We conclude that the trial court properly rejected Appellant’s claims that
Cardullo had breached the parties’ contract for the reasons set forth above.
We also decline to accept Appellant’s invitation to overturn the credibility
findings of the trial court as factfinder, which we will not do.
For the foregoing reasons, we affirm the judgment in favor of Cardullo.
Judgment affirmed.
Date: 12/26/2024
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