Davis Cookie Co., Inc. v. Wasley

566 A.2d 870, 389 Pa. Super. 112, 1989 Pa. Super. LEXIS 3418
CourtSupreme Court of Pennsylvania
DecidedNovember 21, 1989
Docket1203
StatusPublished
Cited by18 cases

This text of 566 A.2d 870 (Davis Cookie Co., Inc. v. Wasley) is published on Counsel Stack Legal Research, covering Supreme Court of Pennsylvania primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Davis Cookie Co., Inc. v. Wasley, 566 A.2d 870, 389 Pa. Super. 112, 1989 Pa. Super. LEXIS 3418 (Pa. 1989).

Opinion

KELLY, Judge:

In these consolidated appeals we address two significant procedural issues regarding permissive counterclaims under Pa.R.C.P. 1031.

First, we are called upon to determine whether the Luzerne County trial court abused its discretion in failing to grant allowance to amend an answer with new matter to assert a permissive counterclaim under Pa.R.C.P. 1033. We quash this appeal as having been taken improvidently from an interlocutory and unappealable order.

Second, we are called upon to determine whether the Clarion County trial court erred granting dismissal on the *115 basis of the pendency of a prior action in another county in which the cause of action alleged as the basis of the complaint could have been, but was not, asserted as a permissive counterclaim. We vacate the order dismissing the complaint and remand with instructions.

Facts and Procedural History

Since the early 1950’s, appellant, Davis Cookie Co. (Davis Cookie), has had a license from Archway Cookies, Inc. to bake and sell “Archway” cookies in Pennsylvania. In 1987, Davis Cookie and appellee Thomas Wasley (Wasley) negotiated a franchise agreement memorialized by a written letter of intent. Wasley made deposits toward the franchise fee agreed in the amount of $5,247.60. Later, however, he decided not to follow through with the franchise agreement. The dispute between the parties arises from Wasley’s withdrawal.

Wasley desires return of his deposit. Davis Cookie contends that under the terms of the agreement the deposit was not refundable, and that Wasley is also liable for liquidated damages under the terms of the agreement in the amount of an additional $5,247.60. Substantively, we are presented with a relatively straightforward and uncomplicated contract case. It was not destined to remain so.

On March 7, 1988, Wasley filed an action against Davis Cookie in Luzerne County seeking return of its deposit. In its answer and new matter, pursuant to Pa.R.C.P. 1080, Davis Cookie responded to Wasley’s complaint by asserting that under the clear terms of the letter of intent signed by the parties the deposit was not refundable. Davis Cookie declined to present a counterclaim under Pa.R.C.P. 1081, for liquidated damages in Wasley’s Luzerne County action.

On March 80, 1988, Davis Cookie filed an action against Wasley in Clarion County seeking liquidated damages for Wasley’s alleged breach of the franchise agreement. Was *116 ley asserted the ancient defense of lis alibi pendens 1 by preliminary objections. The trial court sustained the objections and dismissed the suit on July 12,1988. Davis Cookie filed timely notice of appeal.

Despite its expressed preference for pursuing its breach of contract action in Clarion County, and the prospect of eventual success on appeal from the order dismissing its Clarion County action, Davis Cookie proceeded to move to amend its answer and new matter in the Luzerne County action, pursuant to Pa.R.C.P. 1033, to assert its claim for liquidated damages as a permissive counterclaim in Wasley’s action for return of its deposit. Wasley opposed the motion. The trial court denied the motion, opining that Davis Cookie had created its own procedural difficulties and that the trial court was disinclined to exercise its discretion to extricate Davis Cookie from a mess of its own making. Davis Cookie again filed timely notice of appeal.

Davis Cookie’s separate appeals were consolidated for argument before this Court. On appeal, Davis Cookie contends that because it was privileged under Pa.R.C.P. 1031 to decline to present its permissive counterclaim for liquidated damages in Wasley’s Luzerne County action, the trial court erred in dismissing its Clarion County action on the basis of Wasley’s asserted' lis alibi pendens defense. Davis Cookie also contends that the trial court in Luzerne County abused its discretion in denying its motion to amend *117 its answer to assert a counterclaim under Pa.R.C.P. 1033. We reverse the dismissal, and quash the appeal of the order denying allowance to amend.

I. Appeal from Denial of Allowance to Amend

In Gabriel v. O’Hara, 368 Pa.Super. 383, 534 A.2d 488 (1987) and Barr v. General Accident Group Ins., 360 Pa.Super. 334, 520 A.2d 485 (1987), this Court held that order denying complainant’s allowance to amend pursuant to Pa.R.C.P. 1033 to add a new cause of action arising from the same transaction or occurrence, effectively put the complainant out of court on the claims, and were therefore final and appealable. The instant case, though also involving an appeal from an order denying allowance to amend under Pa.R.C.P. 1033, is nonetheless materially distinguishable.

In Gabriel and Barr the effect of the order denying allowance to amend under Pa.R.C.P. 1033 was to preclude the complainant from complying with the compulsory joinder rule of Pa.R.C.P. 1020(d)(l & 4) which provides that:

(d)(1) If a transaction or occurrence gives rise to more than one cause of action against the same person, including causes of action in the alternative, they shall be joined in separate counts in the action against any such person.
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(4) Failure to join a cause of action as required by subdivision (d)(1) of this Rule shall be deemed a waiver of that cause of action as against all parties to the action.

The effect of a failure to comply with Pa.R.C.P. 1020(d)(1) is a waiver of any cause of action not so joined. Hence, the denial of a motion to amend under Pa.R.C.P. 1033 to assert a claim covered by the compulsory joinder rule has the effect of a disposition of such a claim by dismissal on the merits.

In the instant case, it is the defendant who appeals from an order denying allowance to amend the answer and new matter to assert a permissive counterclaim. While the *118 denial of allowance to amend will result in a certain degree of duplication of efforts and consequent cost both to the parties and to the court system, Davis Cookie is not “out of court” on its claim. This Court recently explained in Bender’s Floor Covering Co. v. Gardner, 387 Pa.Super. 531, 564 A.2d 518 (1989):

In this case, the trial court’s denial of appellants’ petition to amend and to present a new counterclaim did not serve to put appellants “out of court” as to that claim, nor is the claim in danger of being irreparably lost as a result of the order.

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Bluebook (online)
566 A.2d 870, 389 Pa. Super. 112, 1989 Pa. Super. LEXIS 3418, Counsel Stack Legal Research, https://law.counselstack.com/opinion/davis-cookie-co-inc-v-wasley-pa-1989.