Electron Energy Corp. v. Short

597 A.2d 175, 408 Pa. Super. 563, 1991 Pa. Super. LEXIS 2504
CourtSuperior Court of Pennsylvania
DecidedAugust 20, 1991
StatusPublished
Cited by74 cases

This text of 597 A.2d 175 (Electron Energy Corp. v. Short) is published on Counsel Stack Legal Research, covering Superior Court of Pennsylvania primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Electron Energy Corp. v. Short, 597 A.2d 175, 408 Pa. Super. 563, 1991 Pa. Super. LEXIS 2504 (Pa. Ct. App. 1991).

Opinions

BROSKY, Judge.

This is an appeal from a judgment entered after requested post-trial relief was denied. Appellants raise several issues including whether a professional individual who, individually, is not a party to a contract can be found liable for breach of contract when he performed the work under the contract? Appellants also argue that there was a failure to prove that there were damages resulting from design error, and also argue that appellee failed to prove damages in other regards. After careful consideration of arguments advanced by both parties we affirm in part, and reverse in part, the judgment appealed from.

Appellant Edwin P. Short is the president and sole shareholder of Purdy Engineers. Appellee Electron was considering the building of a new manufacturing facility and wished to design a heating and cooling system which would capture and utilize heat from the manufacturing process. Appellant Short was contacted to assist in this process. A letter was sent by Short to appellee with a letterhead reading “Purdy Engineers, Incorporated” setting forth a proposal to provide “construction management services.” In greater detail the letter went on to specify the services to be rendered, indicating that the services would be provided by Purdy Engineers. Next to the word “agreed” the letter/proposal was signed by Edwin P. Short with “Edwin P. Short, Jr. P.E.” “Purdy Engineers, Inc.” written on two lines underneath. The document was further signed, under the same heading, by “Marlin S. Walmer, Pres.” “Electron Energy Corp.” Curiously, as to the document itself, nowhere in the document is the specific purpose of designing [567]*567a heating and cooling system explicitly set forth. Nor is there any mention of how the system would perform, nor can there be found any guarantees of performance of a heating and cooling system. In fact, the following disclaimer preceded the specific proposals set forth in the document: “[t]he portion of the total project for which this firm is proposing to provide consulting services is generally limited to performing as the Owner’s authorized representative, for the specific functions as hereinafter listed, and not to function either as the design professional for the structure nor as the General Contractor, ...”

Regardless of the wording of the document it appeared understood that Short’s primary function was to design and coordinate the construction of a heating and cooling system for the new plant that would capture and utilize by-product heat from the company’s manufacturing process. After construction on the new plant had begun appellee found Short largely unavailable. Additionally, after construction was completed problems developed with the system that required modifications and replacement of certain parts. Appellee instituted this suit naming both Short and Purdy as parties in breach of contract. However, there was not a count for negligence or malpractice. After a non-jury trial a verdict was returned for appellee in the amount of $97,-914.21. Post trial motions were filed and denied. This appeal followed.

Appellant Short first argues that it was erroneous to find him personally liable for breach of contract because he was not a party to the contract. We agree. It is fundamental contract law that one cannot be liable for a breach of contract unless one is a party to that contract. See, Viso v. Werner, 471 Pa. 42, 369 A.2d 1185 (1977). In the present case, the trial court acknowledged this rule of law but construed a provision of the Business Corporations Law relating to professional corporations to eliminate this, sometimes technical, distinction as to a professional rendering professional services. The trial court also hedged somewhat by suggesting that it was not entirely clear that the [568]*568contract was signed solely in a representative capacity. Upon review we find both justifications lacking.

In considering similar facts in the Viso case, our Supreme Court concluded that the signatory to the contract there was not assuming personal liability and was not properly considered a party to the contract. The Court stated:

Admittedly, the mere signature of the appellant preceded by the word “by” and following the typed name of the corporation on the corporation’s letterhead is not conclusive that he was acting in a representative capacity, if the alleged contract showed an intent to bind appellant individually. However, no such intent appeared either in the written contract, or in the evidence proffered by the appellees at trial.

471 Pa. at 48, 369 A.2d at 1188, (emphasis in original). We believe the above commentary is similarly appropriate in this case. The written contract consisted of a proposal sent to Electron by appellant Short on Purdy Engineers letterhead. The document set forth in extensive fashion the nature of the proposed services but notably spoke of these services being provided by Purdy Engineers. It also called for payment to be made to Purdy Engineers and at the end of the document on a line provided next to the word “agreed” the document was signed by the president of both companies and underneath their signatures their name and company name was typed. Nowhere in the document does the language reasonably suggest that Short would provide the services in an individual capacity or that Short was assuming personal liability for the contract. Indeed, Short’s name does not appear anywhere in the text of the proposal.

In reaching its decision, the trial court focused on Short’s failure to identify his relationship to Purdy in the signature block as creating doubt as to the capacity in which the contract was signed. However, the fact that his name was followed by Purdy’s reasonably suggests that he was signing in behalf of Purdy, a conclusion that seems extremely difficult not to reach when the entire text of the document is read together. The trial court also found relevant evi[569]*569dence that Short received $15,000.00 from the project’s architect and that the sum was apparently paid to him directly. However, we do not find this evidence that probative of Short’s capacity with respect to Electron Energy. Short’s relationship with the architect was independent of his relationship with Electron. The mere fact that he may have undertaken performance of services as an individual for the architect cannot convert an otherwise corporate assumption of services with Electron into an individual one. Furthermore, there is nothing preventing an individual from changing capacities from one undertaking to another. Quite simply, we cannot view this fact as outweighing or countering the rather plain intent that must be gleaned from a reading of the document itself.

The other factor persuading the trial court to find Short personally liable under a breach of contract theory is § 2925 of the BCL. Title 15 Pa.C.S. § 2925 states:

(a) General Rule.

Free access — add to your briefcase to read the full text and ask questions with AI

Related

Cite This Page — Counsel Stack

Bluebook (online)
597 A.2d 175, 408 Pa. Super. 563, 1991 Pa. Super. LEXIS 2504, Counsel Stack Legal Research, https://law.counselstack.com/opinion/electron-energy-corp-v-short-pasuperct-1991.