J-A26045-25
NON-PRECEDENTIAL DECISION - SEE SUPERIOR COURT O.P. 65.37
CLARENCE W. FOSTER III : IN THE SUPERIOR COURT OF : PENNSYLVANIA : v. : : : DNT AUTOMOTIVE GROUP, LLC AND : DANIEL R. WHITE -------------------- : ----------------------------------------- : No. 1037 WDA 2023 ----------------------------------------- : ----------------------------------------- : ------------------------------------- W : & S VEHICLES, LLC D/B/A P&W : FOREIGN CARS : : : v. : : : DANIEL R. WHITE, AN ADULT : INDIVIDUAL, MADISON : AUTOMOTIVE GROUP, LLC, A : DELAWARE LIMITED LIABILITY : COMPANY, AND SUB OF EL CAJON, : LLC, A DELAWARE LIMITED : LIABILITY COMPANY ------------------ : ----------------------------------------- : ----------------------------------------- : ----------------------------------------- : ----------------------------------------- : DANIEL R. WHITE : : : v. : : : CLARENCE W. FOSTER III AND TIM : SHULTS : : : v. : : J-A26045-25
: W & S VEHICLES, LLC : : : APPEAL OF: DANIEL R. WHITE
Appeal from the Judgment Entered February 27, 2024 In the Court of Common Pleas of Allegheny County Civil Division at No(s): GD-22-014570, GD-22-015944, GD-23-000178
BEFORE: OLSON, J., STABILE, J., and KING, J.
MEMORANDUM BY KING, J.: FILED: MAY 11, 2026
Appellant, Daniel R. White, appeals from the judgment entered in the
Allegheny County Court of Common Pleas, in favor of Appellees, Clarence W.
Foster, III, W&S Vehicles, LLC (“W&S”) and Tim Shults. Specifically, Appellant
challenges the orders which granted Appellees’ motion to enforce settlement,
motion for contempt, and motion for attorneys’ fees, and denied Appellant’s
motion to enforce settlement. We affirm.
The relevant facts and procedural history of this case are as follows. On
December 13, 2022, Appellee Clarence Foster filed a complaint against
Appellant and DNT Automotive Group, LLC (“DNT”). In relevant part, the
complaint alleged that Appellant and Mr. Foster were the two members of
DNT, each with fifty percent ownership. DNT contracted with Ethos Group,
Inc. (“Ethos”) to sell finance and insurance products offered by Ethos to
customers of the car dealerships owned and operated by Appellee, W&S. Mr.
Foster was the manager of W&S with a 51% ownership interest in the business
and Appellant was a minority member with an 11% ownership interest. Mr.
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Foster alleged that Appellant withdrew hundreds of thousands of dollars paid
by Ethos to the DNT account without Mr. Foster’s consent and without making
appropriate distributions to Mr. Foster.
On December 22, 2022, W&S filed a complaint against, inter alia,
Appellant and Sub of El Cajon, LLC (“Sub”). Sub operated a car dealership
and was owned by Appellant and Maximillian Starks. Mr. Starks also had an
11% ownership interest in W&S. Relevant to this appeal, the complaint
alleged that Appellant was authorized to secure floorplan financing for W&S
from JPMorgan Chase Bank (“Chase Bank”). Unbeknownst to W&S, in addition
to securing the floorplan financing and a revolving line of credit for W&S,
Appellant also took out a term note (“Chase Note”) in the amount of
$4,437,500.00 for the benefit of Sub, using W&S’ assets as collateral. The
complaint alleged that the full amount of the Chase Note went to Sub.
On January 6, 2023, Appellant filed a complaint against Mr. Foster and
Appellee Tim Shults and named W&S as a nominal defendant. Mr. Shults had
a 16% ownership interest in W&S. Briefly, the complaint alleged that Mr.
Foster abused his role as manager of W&S and his mismanagement, self-
dealing and deceptive conduct caused harm to W&S and its members.
Appellant further alleged that he was entitled to Mr. Shults’ ownership interest
in W&S. Appellant sought to remove Mr. Foster as manager and member of
W&S or alternatively, the dissolution of W&S.
On January 13, 2023, the trial court consolidated all three cases.
Thereafter, the parties engaged in settlement discussions. On April 3, 2023,
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Appellant’s counsel, Brad Funari, Esq., informed the court that the parties had
reached a settlement. During a status conference on April 5, 2023, Appellees
informed the court that Appellant was refusing to sign the material settlement
term sheet (“Term Sheet”) that reflected the settlement agreement that the
parties had reached. On April 11, 2023, the court held an evidentiary hearing
to determine whether to enforce the settlement agreement.
At the hearing, Appellees called Gretchen E. Moore, Esq., counsel for
W&S, to testify. Attorney Moore testified that the parties agreed to engage in
settlement discussions to resolve all disputes on March 22, 2023. There was
urgency to try to resolve the disputes between the parties because Appellant,
Mr. Foster, Sub and W&S received a default letter from Chase Bank on January
31, 2023. The letter informed the parties that the floorplan credit agreement
would be terminated on May 1, 2023 and all amounts outstanding under the
floorplan credit agreement and the Chase Note would become due and payable
on this date. (See Settlement Enforcement Hearing - W&S Exhibit 1,
submitted 4/11/23). All parties agreed that they would engage in settlement
discussions to negotiate a “global business divorce.” Additionally, Appellant
represented that he had authority to speak for Mr. Starks and presented a
document signed by Mr. Starks stating that Mr. Starks executed a purchase
agreement in which he sold all of his ownership interests in W&S to Appellant.
(See Settlement Enforcement Hearing- W&S Exhibit 2, submitted 4/11/23).
The parties did not reach an agreement on March 22, 2023. The parties
continued settlement talks on March 23, 2023 and came to an agreement on
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many of the non-monetary terms of a settlement. On March 23, 2023, the
parties received another letter from Chase Bank, which stated that Sub was
“out of trust” on the floorplan agreement because it failed to remit payments
to Chase Bank from the sale of vehicles as required by the agreement. (See
Settlement Enforcement Hearing - W&S Exhibit 3, submitted 4/11/23). The
parties reconvened on March 24, 2023, and reached an agreement to settle
all disputes in the consolidated cases at approximately 6:00 p.m.
At 6:11 p.m. on March 24, 2023, Appellant’s counsel, Attorney Funari,
sent an email to all the parties stating:
Confirming that the parties have reached an agreement this afternoon to resolve all disputes for $1.9mm and other non- monetary terms which are being memorialized in a term sheet prepared by Mr. Foster’s counsel. We appreciate that it is taking longer than you expected to prepare the document. We look forward to receiving it and will work diligently to review and comment on it, including reviewing it with [Appellant] and [Mr. Starks] over the weekend.
(Settlement Enforcement Hearing - W&S Exhibit 4, submitted 4/11/23). At
6:15 p.m., Attorney Moore sent an email to the parties stating, “Please find
attached for your review and comment the material settlement term sheet, as
agreed upon today by all parties.” (Settlement Enforcement Hearing - W&S
Exhibit 5, submitted 4/11/23, at 1). In relevant part, the Term Sheet attached
to Ms. Moore’s email provided:
The following material terms of settlement are made and entered into effective as of March 24, 2023 (“Effective Date”) by and among the following parties at settlement discussions on March 22-24, 2023 (“Term Sheet”).
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* * *
The parties to this Term Sheet shall enter into a definitive agreement (“Definitive Agreement”) to be executed by the parties which includes all terms contained in this Term Sheet, along with such other terms as are customarily contained in settlement agreements among parties to commercial litigation.
1. Consideration: W&S shall pay one million nine hundred thousand dollars ($1,900,000) (the “Settlement Payment”) to [Appellant] and [Mr.] Starks.
b. The Settlement Payment shall be delivered within ten (10) days of an executed Definitive Settlement Agreement, signed by all parties, as set forth herein.
c. The Settlement Payment shall be paid … to [Appellant] and [Mr.] Starks upon the satisfaction of all conditions and obligations of [Appellant] under the terms of the Definitive Agreement and this Term Sheet.
2. Consideration: The following parties will take the following actions:
b. [Appellant] and/or [Sub] pay off the Chase Note as defined below in the original amount of $4,437,500 with Chase at [Sub.]
i. [Appellant] will indemnify, defend and hold [Mr.] Foster, [Mr.] Shults, … and W&S harmless from and against any claims, obligations, and liabilities related to or arising out of the Chase Note.
ii. [Appellant] obtains release on behalf of [Mr.] Foster and W&S from Chase related to
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and arising out of the Chase Note. [Appellant] to secure satisfaction of the Chase Note.
f. Disputes re Ethos funds and [MTD Holdings, LLC1] are hereby resolved.
i. Contingent upon review books of DNT and MTD and release of each entity as needed. [Mr.] Foster to be held harmless in relation to any acts or conduct of DNT and MTD.
10. W&S shall prepare the Definitive Agreement incorporating the terms of this Term Sheet. The agreed upon terms in this Term Sheet shall be binding on the Parties and shall not be subject to further negotiation in preparation of the Definitive Agreement.
11. Standard agreement terms for the Definitive Agreement, such as:
e. Fee Shifting – in the event any Party to the Definitive Agreement and this Term Sheet brings an action or suit against any other Party by reason of any breach or alleged breach of any agreement, covenant, or condition of this Agreement, then and in that event, the substantially prevailing party as reflected in a final judgment shall be entitled to have and to recover from the other Party or Parties all costs and expenses of suit, including reasonable attorney’s fees. ____________________________________________
1 Appellant and Mr. Foster each own a 50% membership interest in MTD. The parties disputed ownership of funds in MTD’s bank account and assets owned by MTD.
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(Id. at 1-7).
Attorney Moore testified that the Term Sheet accurately reflected the
settlement agreement reached by the parties on March 24, 2023. Regarding
the Ethos funds, Attorney Moore explained that the parties agreed that they
would not pursue any claims related to past funds distributed by Ethos and
any outstanding funds would be split between Appellant and Mr. Foster.
Attorney Moore further reviewed each material term in the Term Sheet and
affirmed that Appellant, through his counsel, agreed to the terms at the
settlement negotiation. Nevertheless, Appellant did not sign the Term Sheet.
Rather, Attorney Funari responded with revisions to the Term Sheet, raising
additional issues that were not agreed upon by the parties. Relevant to this
appeal, Appellant wanted 120 days to pay off the Chase Note so that Appellant
could facilitate the sale of Sub. Attorney Moore stated that the parties did not
agree to such a delay due to the impending default date of May 1, 2023.
During cross examination, Attorney Moore acknowledged that Attorney
Funari stated during the settlement talks that Appellant was in the process of
selling Sub. Nevertheless, Attorney Moore maintained that the parties did not
agree that Appellant’s obligation to pay off the Chase Note under the
settlement agreement was contingent upon the sale of Sub or that Appellant
would have a period of 120 days to facilitate the sale of Sub prior to paying
off the Chase Note. Attorney Moore further maintained that the parties agreed
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to an expeditious business divorce, wherein Appellant would pay off the Chase
Note prior to the default date. Additionally, Attorney Moore continued to
affirm that the language of the Term Sheet, as originally drafted and attached
to her March 24, 2023 email, accurately reflected the agreement reached
between the parties on March 24, 2023.
Attorney Moore testified that after Attorney Funari sent his revisions,
the parties sent multiple versions of the Term Sheet to each other, attempting
to resolve the new disputes that arose, but were unsuccessful. At 4:09 p.m.
on April 3, 2023, Attorney Funari sent an email to the court, affirming that the
parties settled all claims in the consolidated cases and were working on
finalizing the Term Sheet. (See Settlement Enforcement Hearing - W&S
Exhibit 7, submitted 4/11/23, at 4). Shortly thereafter, Attorney Moore sent
an email to the court requesting a settlement conference. (Id. at 3). In
response, Attorney Funari sent an email to the parties, inquiring why a
settlement conference was necessary because “everyone agrees there is a
settlement.” (Id. at 1).
Attorney Moore was the sole witness at the enforcement hearing. At
the conclusion of the evidence, the court found that the parties reached an
enforceable settlement agreement on March 24, 2023 as reflected in the
original Term Sheet that Attorney Moore attached to her March 24, 2023
email. (See Settlement Enforcement Hearing - W&S Exhibit 5, submitted
4/11/23). The court further stated that it had “no objection to the parties
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entering into subsequent agreements, where they modify or clean up
language, but the material terms of the settlement are set forth in Exhibit No.
5, the original Term Sheet.” (N.T. Settlement Enforcement Hearing, 4/11/23,
at 96).
On April 13, 2023, the court issued an order stating “the settlement
reflected in the material settlement term sheet as represented in Exhibit 5
shall be enforced, and a [Definitive Agreement] shall be signed by all parties
no later than Tuesday, April 18, 2023.” (Settlement Enforcement Order, filed
4/13/23, at 2). The parties subsequently jointly requested that the court
extend the deadline to sign a Definitive Agreement to April 20, 2023 at noon,
which the court granted. When the deadline passed without a signed
Definitive Agreement, Mr. Foster and W&S filed a joint motion for civil
contempt, asserting that Appellant failed to comply with the court’s April 13,
2023 order. The court conducted evidentiary hearings on the motion for
contempt on April 25, 2023 and April 28, 2023.
At the contempt hearing, Attorney Moore testified that on April 15,
2023, Attorney Funari emailed the parties inquiring whether they would like
to continue to negotiate the terms of the Term Sheet or proceed with the Term
Sheet enforced by the court. (See Contempt Hearing-W&S Exhibit 4,
submitted 4/25/23). An attorney for W&S replied to Attorney Funari stating
that they did not intend to negotiate the Term Sheet any further and wanted
to proceed with the Term Sheet enforced by the court. The email further
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specified that Mr. Foster’s counsel would send a Definitive Agreement by April
17, 2023. (See id.) On April 17, 2023, counsel for Mr. Foster sent an email
with a draft of the Definitive Agreement attached. (See Contempt Hearing-
W&S Exhibit 5, submitted 4/25/23). Attorney Moore testified that she assisted
in preparing the Definitive Agreement. They attempted to draft a document
that aligned as closely as possible to the Term Sheet enforced by the court
with additional necessary details that were implied therein.
On April 18, 2023, an attorney for Appellant sent an email to the parties
with Appellant’s revised version of the Definitive Agreement. (See Contempt
Hearing-W&S Exhibit 7, submitted 4/25/23). The email further specified that
Appellant would join a request to the court for an extension of the deadline to
sign a Definitive Agreement. Attorney Moore testified that Appellant’s revised
version removed a portion of the Definitive Agreement which specified that
Appellant was required to satisfy his obligations under the agreement prior to
the release of the settlement funds. Appellant added that the settlement
funds would be released on April 28, 2023, removing any contingencies on the
release of the funds. Attorney Moore testified that this differed materially
from the Term Sheet, which specified that the settlement funds would only be
paid to Appellant upon satisfaction of all of Appellant’s obligations under the
agreement. Appellant’s version also removed portions of the Definitive
Agreement that required Appellant to obtain releases for the other parties
from various entities. Attorney Moore testified that this also differed
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materially from the Term Sheet which specified that Appellant was obligated
to obtain these releases. Appellant’s version included a provision that
Appellant was entitled to the return of $500,000.00 that he invested as capital
contribution. Attorney Moore testified that this was not included in the Term
Sheet, and the parties never discussed or agreed to such a term throughout
their settlement discussions. Additionally, Appellant’s version specified that
any funds held by Ethos would be distributed to Appellant, changing a portion
in the original draft of the Definitive Agreement which specified that any such
funds would be evenly distributed to Appellant and Mr. Foster. Attorney Moore
testified that this change also differed materially from what the parties agreed
to in the settlement agreement.
The parties obtained an extension from the court, and on April 19, 2023
at 4:49 p.m., counsel for Mr. Foster emailed the parties with a revised version
of the Definitive Agreement, which restored the terms requiring Appellant to
satisfy his obligations under the agreement and obtain releases for the parties
prior to distribution of the settlement funds on April 28, 2023. It further
removed the additions that Attorney Moore testified were not in the Term
Sheet or agreed to by the parties in the settlement agreement. (See
Contempt Hearing-W&S Exhibit 9, submitted 4/25/23). Counsel for W&S and
Mr. Shults emailed the parties on April 20, 2023 at 9:52 a.m. and 11:00 a.m.,
respectively, stating that they were in agreement with the version sent by
counsel for Mr. Foster. (See Contempt Hearing-W&S Exhibit 10, submitted
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4/25/23, at 2-3). At 4:00 p.m. on April 20, 2023, after the court’s deadline
had passed, Attorney Funari sent an email with a revised version of the
Definitive Agreement which again changed back the sections that Attorney
Moore testified differed from the Term Sheet and the parties’ settlement
agreement. (Id. at 1).
At 6:03 p.m. on April 20, 2023, Attorney Moore responded stating that
she was disappointed that Appellant was continuing to negotiate terms that
are not in or fairly implied by the Term Sheet enforced by the court,
particularly when the court’s deadline has passed. (See Contempt Hearing-
W&S Exhibit 11, submitted 4/25/23, at 4). Attorney Moore requested that the
parties join a call at 9:45 a.m. the following morning to attempt to resolve the
dispute before the parties contact the court. Attorney Funari responded at
7:47 p.m. defending Appellant’s revisions of the Definitive Agreement.
Attorney Funari further stated that he did not think a call would be productive
if the other parties did not first send comments to the draft that Appellant
most recently circulated. (Id. at 3-4). At 9:48 p.m., Attorney Funari sent
another email stating that they would not be joining the call because the other
parties had not sent their comments to the revised draft. (Id. at 2-3). At
9:03 a.m. on April 21, 2023, counsel for Mr. Foster sent another email
requesting that Appellant join the call at 9:45 a.m. The email further listed
the sections of the revised draft that the parties disputed and their specific
objections to those sections. (Id. at 1-2). Attorney Moore testified that
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Attorney Funari did not participate in the call at 9:45 a.m. or initiate further
conversation that day. Thereafter, Attorney Moore informed the court that
the parties had not signed a Definitive Agreement by the court’s deadline and
subsequently filed the joint motion for contempt.
On cross examination, Attorney Moore acknowledged that the parties
had a phone conversation on April 24, 2023, to discuss the matter and had
made progress towards resolving their disputes. Following this conversation,
counsel for Mr. Foster sent a revised version of the Definitive Agreement,
responding to Appellant’s last draft. Attorney Moore initially believed the
parties had narrowed their issues during their phone conversation.
Nevertheless, Attorney Funari’s response to the revised version of the
Definitive Agreement indicated to her that their disputes remained and court
intervention was necessary. Attorney Moore further stated that although the
Term Sheet did not specify any specific dates by which Appellant needed to
satisfy his obligations under the agreement, all parties negotiated with the
understanding that the terms of the agreement would be done before the May
1, 2023 default date for the Chase Note. Attorney Moore further stated that
she believed Appellant was acting with wrongful intent in declining to sign a
Definitive Agreement reflecting a settlement agreement that was reached over
a month prior to the hearing.
Appellant elected not to present any witnesses at the contempt
hearings. On April 28, 2023, the court issued an order finding Appellant in
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civil contempt of court. The order specified that Appellant could purge the
contempt by signing the Definitive Agreement that was attached as Exhibit 12
to the joint motion for civil contempt by May 1, 2023. Appellant signed the
Definitive Agreement prior to the deadline imposed by the court.
On June 16, 2023, Mr. Foster filed a motion for attorney’s fees and costs,
and W&S filed a joinder in that motion. On June 20, 2023, Mr. Shults also
filed a joinder in the motion for attorney’s fees and costs. On July 31, 2023,
Appellant filed a motion to enforce settlement. The court held a hearing on
all these motions on August 22, 2023.
At the hearing, Appellees argued that they were entitled to recover
attorney’s fees for the enforcement and contempt proceedings based on the
fee shifting provisions in the Term Sheet and the Definitive Agreement, and
the court’s power to impose sanctions to enforce its orders. Appellees
____________________________________________
2 The joint motion for contempt states that the exhibits would be delivered to
the court but not electronically filed. (See Joint Motion for Contempt, filed 4/27/23, at 2). As such, the exhibits to the joint contempt motion are not in the certified record. Nevertheless, the contempt motion specifies that Exhibit 1 is the version of the Definitive Agreement that was sent by counsel for Mr. Foster on April 19, 2023 at 4:49 p.m. (Id.) This email and the attached version of the Definitive Agreement was submitted to the court as W&S’s Exhibit 9 at the contempt hearing. (See Contempt Hearing-W&S Exhibit 9, submitted 4/25/23). Further, the version of the Definitive Agreement in Exhibit 9 from the contempt hearing matches the version that was subsequently signed by the parties and attached as Exhibit 1 to the motion to enforce settlement Appellant filed on July 31, 2023. (See Motion to Enforce Settlement - Exhibit 1, filed 7/31/23). As such, we will cite to Exhibit 1 from Appellant’s motion to enforce settlement when referencing the terms of the Definitive Agreement that the court ordered the parties to sign.
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presented affidavits of the fees and costs they were seeking to recover.
Regarding Appellant’s motion to enforce settlement, Appellant asserted
that Appellees failed to comply with the provisions of the Definitive Agreement
that required Appellees to take all necessary steps to release Appellant and
Mr. Starks from all loans associated with W&S. Mr. Foster testified that he
had been readily working on refinancing the loans in question in order to
remove Appellant and Mr. Starks as borrowers and/or guarantors. He worked
with multiple financial institutions to do so but there were delays in the
process. Mr. Foster began working with First National Bank (“FNB”) to
refinance the loan because he believed that the process would move faster
with FNB. At the time of the hearing, FNB was preparing a refinance package.
Mr. Foster provided FNB with all the documents that it requested, and he had
not received any indication from FNB that there would be any issues with
refinancing the loan. Mr. Foster testified that based on his conversations with
representatives at FNB, he believed that FNB would finalize the loan very soon,
which would remove Appellant and Mr. Starks from any obligations under the
loans. Mr. Foster also presented an affidavit from representatives of FNB,
stating that Mr. Foster and W&S had taken all necessary steps to facilitate the
refinancing of the loans to release Appellant and Mr. Starks as borrowers
and/or guarantors. The affidavit further stated the expectation that the
refinancing would occur soon, upon the completion of due diligence conducted
by FNB.
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Following the hearing, the court issued orders on August 22, 2023,
granting Appellees’ motions for attorney’s fees and costs. The court also
issued an order denying Appellant’s motion to enforce settlement. On
September 6, 2023, Appellant filed a notice of appeal. On September 14,
2023, the court ordered Appellant to file a concise statement of errors
complained of on appeal pursuant to Pa.R.A.P. 1925(b), and Appellant timely
complied on October 5, 2023.3
Appellant raises the following issues for our review:
Whether the trial court committed an error of law in granting the initial draft [Term Sheet] as the final settlement agreement reached by the parties?
Whether the trial court committed an error of law in enforcing the Definitive Agreement attached as Exhibit 1 (clean version) to [Mr.] Foster’s motion for contempt?
Whether the trial court committed an error of law in denying [Appellant’s] motion to enforce settlement agreement?
Whether the trial court abused its discretion in holding [Appellant] in civil contempt of court?
Whether the trial court abused its discretion in imposing awards of attorneys’ fees and costs against [Appellant]?
3 At the time that Appellant filed his notice of appeal, final judgment had not
yet been entered. On December 8, 2023, this Court directed Appellant to praecipe the trial court prothonotary to enter judgment. The entry of judgment was delayed pending resolution of various motions that the parties filed. On February 27, 2024, the trial court entered judgment in this matter. Appellant’s premature appeal relates forward to the date of entry of judgment. See Pa.R.A.P. 905(a) (stating notice of appeal filed after announcement of determination but before entry of appealable order shall be treated as filed after such entry and on day thereof).
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(Appellant’s Brief at 8).
Appellant’s first three issues are related and we address them together.
In his first two issues combined, Appellant contends that the Term Sheet the
court enforced was an initial draft of the terms of a settlement that the parties
were still negotiating. Appellant asserts that parties were still circulating
drafts of the Term Sheet at the time when the court held the enforcement
hearing, demonstrating that material terms of the settlement agreement were
still under negotiation. Appellant claims that Attorney Moore acknowledged
during her testimony at the enforcement hearing that the issue of when the
Chase Note would be paid off was still in dispute between the parties.
Appellant further claims that the mere fact that the parties reported to the
court that they had reached a settlement agreement was not dispositive as to
whether the parties reached an agreement, particularly when there was
evidence that significant disputes regarding the agreement remained.
Appellant maintains that he did not consent to the material terms outlined in
the Term Sheet and as such, the court’s decision to enforce the Term Sheet
was erroneous. Likewise, Appellant insists that the court’s order mandating
the parties to sign a Definitive Agreement pursuant to the terms of the Term
Sheet to which Appellant did not consent was also improper.
In his third issue, Appellant asserts that the Definitive Agreement that
the court mandated the parties to sign required Appellees to release Appellant
and Mr. Starks as borrowers and/or guarantors from any loans of financial
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obligations associated with W&S. Appellant claims that although he fulfilled
his obligations under the Definitive Agreement, Appellees failed to obtain
releases for Appellant and Mr. Starks. Appellant asserts that the court erred
in concluding that Appellees had satisfied their obligations under the Definitive
Agreement. Appellant concludes that the court committed errors of law when
it enforced the Term Sheet, ordered the parties to sign a Definitive Agreement,
and subsequently denied Appellant’s request to enforce the terms of that
Definitive Agreement. We disagree.
“Our standard of review of a trial court’s grant or denial of a motion to
enforce a settlement agreement is plenary, as the challenge is to the trial
court’s conclusion of law.” Casey v. GAF Corp., 828 A.2d 362, 367
(Pa.Super. 2003), appeal denied, 577 Pa. 684, 844 A.2d 550 (2004). While
we are free to draw our own inferences and reach our own conclusions from
the court’s factual findings, we are bound by those findings of fact when
competent evidence exists to support them. Id.
Regarding the enforceability of a settlement agreement, this Court has
previously stated:
The law of this Commonwealth establishes that an agreement to settle legal disputes between parties is favored. There is a strong judicial policy in favor of voluntarily settling lawsuits because it reduces the burden on the courts and expedites the transfer of money into the hands of a complainant. If courts were called on to re- evaluate settlement agreements, the judicial policies favoring settlements would be deemed useless. Settlement agreements are enforced according to principles of contract law. There is an offer (the settlement figure), acceptance,
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and consideration (in exchange for the plaintiff terminating his lawsuit, the defendant will pay the plaintiff the agreed upon sum).
Where a settlement agreement contains all of the requisites for a valid contract, a court must enforce the terms of the agreement. This is true even if the terms of the agreement are not yet formalized in writing. Mazzella v. Koken, 559 Pa. 216, 221, 739 A.2d 531 536 (1999); see Commerce Bank/Pennsylvania v. First Union Nat. Bank, 911 A.2d 133, 147 (Pa.Super.2006) (stating “an agreement is binding if the parties come to a meeting of the minds on all essential terms, even if they expect the agreement to be reduced to writing but that formality does not take place.”). Pursuant to well-settled Pennsylvania law, oral agreements to settle are enforceable without a writing. An offeree’s power to accept is terminated by (1) a counter-offer by the offeree; (2) a lapse of time; (3) a revocation by the offeror; or (4) death or incapacity of either party. However, once the offeree has exercised his power to create a contract by accepting the offer, a purported revocation is ineffective as such.
Mastroni-Mucker v. Allstate Ins. Co., 976 A.2d 510, 518 (Pa.Super. 2009),
appeal denied, 605 Pa. 715, 991 A.2d 313 (2010) (some citations and
quotation marks omitted).
Additionally:
Given the inability of the parties to an oral agreement to reduce such agreement to writing after several attempts does not necessarily preclude a finding that the oral agreement was enforceable.
When there exists conflicting evidence as to whether the parties intended that a particular writing would constitute a complete expression of their agreement, the parties’ intent is a question to be resolved by the finder of fact… We will not reverse such finding unless it is unsupported by the evidence, or unless the fact finder has clearly abused its discretion or committed an error of law.
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In reviewing such finding, we are mindful that
[i]t is understandable [that] when, after a prolonged period of negotiations, parties appear to reach agreement on the essential terms of an important transaction, one of them might believe that a contract had been made. However, before preliminary negotiations ripen into contractual obligations, there must be manifested mutual assent to the terms of a bargain.
Essner v. Shoemaker, 393 Pa. 422, 425, 143 A.2d 364, 366 (1958). If all of the material terms of a bargain are agreed upon, the settlement agreement will be enforced. If, however, there exist ambiguities and undetermined matters which render a settlement agreement impossible to understand and enforce, such an agreement must be set aside.
Mazzella v. Koken, 559 Pa. 216, 225, 739 A.2d 531, 536–37 (1999) (some
citations and quotation marks omitted). Further, where the parties have
entered into an oral agreement, subsequent negotiations between the parties
offered to obtain the signature of a recalcitrant party to a written agreement,
does not negate the enforceability of the oral agreement where there is no
evidence that the parties agreed to discharge their obligations pursuant to the
oral agreement. See Johnston v. Johnston, 499 A.2d 1074, 1077
(Pa.Super. 1985).
Notably:
In interpreting the terms of a contract, the cardinal rule followed by courts is to ascertain the intent of the contracting parties. If the contractual terms are clear and unambiguous on their face, then such terms are deemed to be the best reflection of the intent of the parties. If, however, the contractual terms are ambiguous, then resort to extrinsic evidence to ascertain their meaning is proper.
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A contract’s terms are considered ambiguous if they are subject to more than one reasonable interpretation when applied to a particular set of facts.
Commonwealth by Shapiro v. UPMC, 652 Pa. 322, 341-42, 208 A.3d 898,
909-10 (2019) (citations and quotation marks omitted).
Instantly, the parties came before the court at the enforcement hearing,
disputing whether they had entered into a settlement agreement and the
specific terms of any such agreement. Following an evidentiary hearing, the
court, as the factfinder, determined that the parties entered into an
enforceable oral settlement agreement on March 24, 2023, and the terms of
that settlement agreement were memorialized in the Term Sheet that the
court enforced. The record supports the court’s findings. See Mazzella,
supra. The only evidence presented to the court regarding the settlement
discussions and its outcome was Attorney Moore’s testimony and the exhibits
of various email conversations between the parties. Attorney Moore testified
that the parties reached a settlement agreement on March 24, 2023, after
three days of settlement discussions. Attorney Moore’s testimony was
supported by an email sent by Attorney Funari, confirming that the parties
had reached a settlement agreement and the terms of that agreement would
be set forth in a Term Sheet. Attorney Moore, who assisted in drafting the
initial Term Sheet, testified that the initial Term Sheet reflected the terms that
the parties had agreed to during the settlement negotiations. She further
went through each term in the initial Term Sheet and affirmed that Appellant
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had agreed to each term at the settlement negotiation. Appellant did not
present any evidence to refute Attorney Moore’s testimony.
Although Appellant presented emails where Attorney Funari sent revised
versions of the Term Sheet with different terms, Attorney Moore consistently
testified that the initial Term Sheet accurately reflected the terms that were
agreed upon by the parties at the settlement negotiation. Attorney Moore
acknowledged that unresolved disputes remained between the parties
regarding the timing of the payment of the Chase Note. Nevertheless, she
testified that these disputes arose after Attorney Funari sent a revised version
of the Term Sheet, attempting to include additional terms that were not
agreed upon by the parties at the settlement negotiations. Again, Appellant
did not present any evidence to refute Attorney Moore’s testimony, and the
court credited her testimony.
On this record, we cannot say the court erred in concluding that the
parties entered into an enforceable oral settlement agreement on March 24,
2023, as reflected in the initial Term Sheet. See Casey, supra. The court’s
conclusion is supported by Attorney Funari’s own email acknowledging that
the parties reached an agreement on March 24, 2023, and Attorney Moore’s
unrefuted testimony as to the terms of that agreement. See Mazzella,
supra. Additionally, the fact that there was evidence that the parties
continued to negotiate the terms of the Term Sheet to resolve subsequent
disputes that arose, does not negate Attorney Moore’s testimony that the
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parties agreed to the terms in the initial Term Sheet on March 24, 2023. See
Johnston, supra.
Upon finding that the initial Term Sheet accurately reflected the
settlement agreement entered into by the parties, the court entered an order
to enforce the terms of the agreement. The Term Sheet required that the
parties enter into a Definitive Agreement. It further specified that the
Definitive Agreement would incorporate the terms in the Term Sheet and
those terms would not be subject to further negotiation during the preparation
of the Definitive Agreement. Additionally, Attorney Moore testified that the
parties entered into the settlement agreement with the understanding that
the terms would be executed prior to the May 1, 2023 default deadline for the
Chase Note. As such, the court ordered the parties to sign a Definitive
Agreement by April 18, 2023. Based on the language of the Term Sheet and
Attorney Moore’s unrefuted testimony regarding the agreed upon timeline, we
cannot say the court erred in its April 13, 2023 order enforcing the settlement
agreement and directing the parties to sign a Definitive Agreement by April
18, 2023. See Commonwealth by Shapiro, supra; Casey, supra.
Regarding Appellant’s motion to enforce settlement, the court found that
Appellees had complied with all material terms of the Definitive Agreement.
Specifically, the Definitive Agreement required that Appellees “shall take all
necessary steps to ensure the release of [Appellant] and [Mr.] Starks, as
borrowers or personal guarantors, from any promissory note, loan, mortgage,
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debenture, debt, or other obligation” that is associated with W&S. (Motion to
Enforce Settlement - Exhibit 1, filed 7/31/23, at 10). At the August 22, 2023
hearing, Mr. Foster testified that he worked with multiple financial institutions
to refinance the loans in question to remove Appellant and Mr. Starks from
the loans as quickly as possible. Appellees further presented an affidavit from
representatives of FNB, which stated that Appellees had taken all necessary
steps to facilitate the release of Appellant and Mr. Starks from these loans. It
further stated that the loans would be refinanced soon, upon completion of
FNB’s due diligence review. The court credited Mr. Foster’s testimony. On
this record, we cannot say the court erred in concluding that Appellees
complied with the term in the Definitive Agreement requiring them to “take
all necessary steps” to obtain the release of Appellant and Mr. Starks from
loans associated with W&S. See Casey, supra. As such, Appellant is not
entitled to relief on his first three issues on appeal.
In his fourth issue, Appellant contends that he did not violate the specific
terms of the court’s April 13, 2023 order by failing to sign the Definitive
Agreement because it varied from the Term Sheet enforced by the court.
Specifically, Appellant claims that the Definitive Agreement required Appellant
to perform numerous obligations by April 28, 2023 even though the Term
Sheet did not contain any specific dates by which Appellant was required to
perform any obligations. Additionally, Appellant asserts that the Definitive
Agreement provided that Appellant would forfeit the settlement payment if he
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failed to satisfy any material term of the Definitive Agreement, which was also
a term that was not included in the Term Sheet. Appellant argues that the
court could not order Appellant, under penalty of contempt, to sign a Definitive
Agreement that differed materially from the Term Sheet, which the court
found contained the terms of the parties’ agreement. Appellant further asserts
that even if Appellant’s conduct constituted a violation of the court’s April 13,
2023 order, Appellees presented no evidence that Appellant acted with
wrongful intent. Appellant claims that the record shows that he attempted, in
good faith, to comply with the court’s order by working with Appellees to draft
a Definitive Order that aligned with the Term Sheet. Appellant concludes that
the court erred in finding Appellant in civil contempt of court for violating the
court’s April 13, 2023 order, and this Court must grant relief. We disagree.
“In reviewing a trial court’s finding on a contempt petition, we are
limited to determining whether the trial court committed a clear abuse of
discretion. This Court must place great reliance on the sound discretion of the
trial [court] when reviewing an order of contempt.” Rogowski v. Kirven,
291 A.3d 50, 57 (Pa.Super. 2023) (internal citation and quotation marks
omitted).
“To be in contempt, a party must have violated a court order, and the
complaining party must satisfy that burden by a preponderance of the
evidence.” Id. (quoting J.M. v. K.W., 164 A.3d 1260, 1264 (Pa.Super.
2017)).
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Specifically, the complainant must prove certain distinct elements: (1) that the contemnor had notice of the specific order or decree which he[, or she,] is alleged to have disobeyed; (2) that the act constituting the contemnor’s violation was volitional; and (3) that the contemnor acted with wrongful intent.
Id. (quoting J.M., supra at 1264).
“[A] mere showing of noncompliance with a court order, or even
misconduct, is never sufficient alone to prove civil contempt.” Habjan v.
Habjan, 73 A.3d 630, 637 (Pa.Super. 2013) (quoting Lachat v. Hinchcliffe,
769 A.2d 481, 488 (Pa.Super. 2001)).
[W]hen making a determination regarding whether a defendant acted with wrongful intent, the court should use common sense and consider context, and wrongful intent can be imputed to a defendant by virtue of the substantial certainty that his actions will violate the court order.
Gross v. Mintz, 284 A.3d 479, 492-93 (Pa.Super. 2022), appeal denied, ___
Pa. ___, 293 A.3d 563 (2023) (quoting Commonwealth v. Reese, 156 A.3d
1250, 1258 (Pa.Super. 2017)).
Regarding contempt orders to enforce a settlement agreement, this
court has stated that the trial court “may … upon petition of one party, utilize
the powers of contempt against a party who unreasonably attempts to thwart
the fulfillment of [a] settlement agreement, if the agreement has been
incorporated into a court order.” Century Inn, Inc. v. Century Inn Realty,
Inc., 516 A.2d 765, 769 (Pa.Super. 1986). “The court may not, however,
order the parties to execute the court’s own agreement, or face a contempt
citation, where that [written] agreement differs from the terms of the
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settlement.” Id. A trial court may not, under penalty of contempt, require
appellants to sign a different agreement than what was agreed upon by the
parties. Johnston, supra at 1087.
Here, the court’s April 13, 2023 order specified that it found that the
terms of the agreement between the parties were set forth in the initial Term
Sheet. It further ordered the parties to sign a Definitive Agreement, as
required in the Term Sheet, by April 18, 2023. At the end of the hearing on
April 11, 2023, the court informed the parties that they were free to continue
to negotiate the specific language of the Definitive Agreement but should not
continue to negotiate any changes to the material terms in the Term Sheet.
Appellant argues that he did not violate the court’s order by failing to
sign the Definitive Agreement proffered by Appellees because the material
terms in the Definitive Agreement differed from the material terms in the Term
Sheet. Nevertheless, the record belies Appellant’s claim. Specifically,
Appellant claims that the Term Sheet did not specify any dates by which
Appellant must satisfy his obligations under the agreement. However, the
Term Sheet states that the settlement payment shall be delivered to Appellant
within ten days of the execution of the Definitive Agreement. It further
specifies that the settlement payment would only be paid upon the satisfaction
of all of Appellant’s obligations under the agreement. As such, although the
Term Sheet does not list specific dates, it sufficiently sets forth that Appellant
should meet his obligations under the agreement within ten days of the
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execution of the Definitive Agreement. The Definitive Agreement that the
court required Appellant to sign to purge his contempt states that the effective
date of the agreement is April 18, 2023, and specifies that Appellant must
meet his obligations under the agreement by April 28, 2023. (See Motion to
Enforce Settlement - Exhibit 1, filed 7/31/23, at 1, 6-9). This term is not
materially different from the Term Sheet as Appellant claims. Rather, it
merely assigns specific dates to the timeline that was already set forth in the
Term Sheet.
Additionally, Appellant claims that the Term Sheet did not contain any
provisions that stated that Appellant would “lose entitlement to the release of
the settlement payment” if he failed to satisfy any material term of the
Definitive Agreement. (See id. at 7). Contrary to Appellant’s claim, the Term
Sheet specifies that the settlement payment would only be paid upon
Appellant’s satisfaction of all his obligations under the agreement. While the
specific language in the Definitive Agreement varies slightly, we cannot say
the term in the Definitive Agreement is substantively different from the Term
Sheet. As such, Appellant’s claim that he did not violate the court’s order
because the Definitive Agreement was materially different from the Term
Sheet lacks merit. See Century Inn, Inc., supra; Johnston, supra.
Appellant further asserts that there was no evidence for the court to find
that Appellant intentionally violated the court order or acted with wrongful
intent. The court found that Appellant did not act in good faith to abide by
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the court’s order to sign a Definitive Agreement that reflected the terms set
forth in the Term Sheet. At the contempt hearing, Attorney Moore testified
that Appellant was sent a Definitive Agreement that aligned as closely as
possible with the Term Sheet enforced by the court. In response, Attorney
Funari sent a revised version with several material changes and additional
terms that were not included in the Term Sheet. Specifically, the revised
version mandated that the settlement funds should be paid to Appellant
without any conditions that Appellant must first satisfy his obligations under
the agreement. This directly contradicts the Term Sheet which specified that
Appellant must satisfy his obligations first. Appellant’s revised version also
contained a new term stating that Appellant was entitled to the return of
$500,000.00 that he invested as capital contribution. This provision was not
included in the Term Sheet and Attorney Moore testified that the parties had
never discussed such a term before it was included in Appellant’s revisions.
The revised version also changed how the Ethos funds would be distributed
between the parties, which Attorney Moore testified differed from the
agreement between the parties.
Attorney Moore testified that Appellant continued to insist on the
inclusion of the terms that differed materially from the Term Sheet, even when
the court’s deadline was imminent. She further testified that Attorney Funari
refused to join a call with the other parties to attempt to resolve the
differences prior the court’s deadline. Attorney Moore testified that she
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believed Appellant was acting with wrongful intent at this point in the process.
She noted that the parties had reached a settlement agreement on March 24,
2023, and Appellant repeatedly tried to renegotiate the terms of that
agreement in complete disregard of the court order. Appellant did not present
any evidence to refute Attorney Moore’s testimony.
The record makes clear that the court ordered the parties to sign a
Definitive Agreement that reflected the terms in the Term Sheet. Appellant
does not offer any argument that the changed terms in Appellant’s revisions
of the Definitive Agreement were contained in or fairly contemplated by the
Term Sheet. Our review of the relevant documents confirms that they are
materially different. Nevertheless, Appellant continued to insist on these
additional terms in violation of the court’s order, even when the court’s
deadline was imminent and/or had passed. As previously discussed, the terms
that Appellant objected to in the Definitive Agreement aligned with the terms
in the Term Sheet. As such, in consideration of the full context of this case,
there was sufficient evidence for the court to find that Appellant’s actions were
volitional, and Appellant acted with wrongful intent to renegotiate better terms
than what was agreed upon by the parties. See Gross, supra. On this
record, we cannot say the court abused its discretion in finding Appellant in
contempt.4 See Rogowski, supra.
4 Appellant does not dispute that he had notice of the court’s order.
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In his fifth issue, Appellant argues that the fee shifting provision in the
Term Sheet only applies to an “action or suit” brought related to a “breach” of
the Term Sheet. Appellant asserts that the proceedings in this case for which
Appellees sought attorney’s fees and costs cannot be considered an action or
suit brought because of a breach of the agreement. Rather, Appellant
contends that Appellees sought enforcement of the Term Sheet, which is not
contemplated in the fee shifting provision. Appellant further asserts that there
was no final judgment rendered where Appellees were the substantially
prevailing party. Appellant concludes that the court erred in granting
Appellees’ motions for attorney’s fees and costs on these grounds. We
disagree.
“Appellate review of a trial court’s order awarding attorney’s fees to a
litigant is limited solely to determining whether the trial court palpably abused
its discretion in making a fee award.” Thunberg v. Strause, 545 Pa. 607,
614-15, 682 A.2d 295, 299 (1996).
An abuse of discretion is not merely an error of judgment, but if in reaching a conclusion, the law is overridden or misapplied, or the judgment exercised is manifestly unreasonable, or the result of partiality, prejudice, bias or ill-will, as shown by the evidence of record. Review of the grant of counsel fees is limited ... and we will reverse only upon a showing of plain error.
Habjan v. Habjan, 73 A.3d 630, 642 (Pa.Super. 2013) (internal quotation
marks, citations, and brackets omitted). “Under the American Rule, applicable
in Pennsylvania, a litigant cannot recover counsel fees from an adverse party
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unless there is express statutory authorization, a clear agreement of the
parties, or some other established exception.” Trizechahn Gateway LLC v.
Titus, 601 Pa. 637, 652, 976 A.2d 474, 482-483 (2009). See also McMullen
v. Kutz, 603 Pa. 602, 613-15, 985 A.2d 769, 776-77 (2009) (explaining that
“parties may contract to provide for the breaching party to pay the attorney
fees of the prevailing party in a breach of contract case”).
In interpreting a fee shifting provision in a contract, this Court has stated
“[w]hen terms in a contract are not defined, we must construe the words in
accordance with their natural, plain, and ordinary meaning.” Profit Wize
Marketing v. Wiest, 812 A.2d 1270, 1274 (Pa.Super. 2002). “As the parties
have the right to make their own contract, we will not modify the plain
meaning of the words under the guise of interpretation or give the language
a construction in conflict with the accepted meaning of the language used.”
Id. at 1274-75.
Here, the court found that Appellant entered into a settlement
agreement on March 24, 2023. The court additionally found that the terms of
that settlement agreement were contained in the initial Term Sheet, which
contained a fee shifting provision which stated that if a party “brings an action
or suit against any other party by reason of any breach or alleged breach of
… this agreement, then … the substantially prevailing party as reflected in a
final judgment shall be entitled to … recover from the other party … all costs
and expenses of suit, including reasonable attorney’s fees.” (Settlement
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Enforcement Hearing - W&S Exhibit 5, submitted 4/11/23, at 7). As such,
pursuant to the fee shifting provision, the court found Appellees were entitled
to the attorney’s fees and costs associated with the actions Appellees brought
to enforce the terms of the agreement.
Although the Term Sheet does not define “action or suit,” the court
noted that Black’s Law Dictionary defines an “action” as a “civil or criminal
judicial proceeding.” Black’s Law Dictionary (12th ed. 2024). It further
specifies that an “action in the sense of a judicial proceeding includes … any
… proceedings in which rights are determined.” Id. As such, the court found
that the proceedings that occurred to enforce the settlement agreement in
this case fell within this definition.
The court further explained:
[The actions for which the court granted attorneys’ fees] were brought because of [Appellant’s] refusal to sign a Term Sheet as agreed upon during the initial March settlement agreement, followed by the court’s necessary intervention to enforce said agreement and the subsequent breaches of that Term Sheet (i.e. not signing a [Definitive Agreement] as required by the Term Sheet, and all actions that stemmed from that breach of the Term Sheet).
In all of those actions, [Mr.] Foster, W&S, and [Mr.] Shults were the substantially prevailing parties, and as such, the fee-shifting provision of the [Term Sheet] allowed for [the] court to grant attorneys’ fees and costs.
(Trial Court Opinion, filed 1/16/25, at 26). Notably, Appellant cites no relevant
authority to support his claim that the proceedings in this case do not
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constitute an “action or suit” as contemplated in the fee shifting provision.5
On this record, we cannot say that the court erred in its interpretation of the
terms “action or suit.” See Profit Wize Marketing, supra.
Appellees sought court intervention to enforce the settlement
agreement because Appellant breached the terms of the parties’ agreement
by failing to sign a Term Sheet and a Definitive Agreement. Appellant also
breached the terms of the parties’ agreement by continuing to negotiate the
terms, which was specifically prohibited by the Term Sheet. On this record,
we cannot say that the court palpably abused its discretion in its award of
attorney’s fees and costs to Appellees. See Thunberg, supra. Accordingly,
Appellant is not entitled to relief on any of his issues on appeal and we affirm
the judgment.
Judgment affirmed.
5 To support his claim, Appellant cites only to Riverview Carpet & Flooring,
Inc. v. Presbyterian SeniorCare, 299 A.3d 937 (Pa.Super. 2023). Nevertheless, Riverview Carpet & Flooring, Inc. merely notes that the appellant in that case did not advance any argument as to how the court should interpret the term “action” included in a fee shifting provision. It does not provide any support for Appellant’s claim that the “action” as stated in the fee shifting provision in the Term Sheet does not apply to the proceedings in this case.
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DATE: 5/11/2026
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