Sant, T. v. Branding Brand, Inc.

• Court: Superior Court of Pennsylvania
• Decided: August 16, 2016
• Docket: 672 WDA 2015
• Status: Unpublished

Opinion

J-A10010-16

NON-PRECEDENTIAL DECISION - SEE SUPERIOR COURT I.O.P. 65.37

TODD SANT AND SUSAN SANT IN THE SUPERIOR COURT OF PENNSYLVANIA Appellants

v.

BRANDING BRAND, INC.

No. 672 WDA 2015

Appeal from the Order Entered April 23, 2015 In the Court of Common Pleas of Allegheny County Civil Division at No(s): C.A. No. GD-15-000219

BEFORE: GANTMAN, P.J., BENDER, P.J.E., and PANELLA, J.

MEMORANDUM BY PANELLA, J. FILED AUGUST 16, 2016

Appellants, Todd and Susan Sant, appeal from the order sustaining the

preliminary objections filed by Appellee, Branding Brand, Inc. (“Branding”),

to their complaint claiming breach of contract and wrongful discharge of

employment. The Sants argue that the trial court erred in ruling that they

could not overcome Pennsylvania’s presumption of at-will employment, as

they alleged sufficient facts to establish the “additional consideration”

exception to the presumption. We conclude that Branding’s offer letter,

signed by Todd, stating that the employment term was “at-will,” controls,

and therefore the additional consideration exception does not apply. We

therefore affirm the trial court’s order regarding the Sants’ claims for breach

of contract and promissory estoppel. We furthermore conclude that the gist

of the action doctrine forecloses Susan’s claim for loss of consortium. J-A10010-16

However, we find that the trial court misapplied the law in addressing the

Sants’ claim for wrongful discharge and therefore reverse and remand for

further proceedings on the wrongful discharge claim.

Given that this appeal arises from an order sustaining preliminary

objections, the factual history of this matter is taken entirely from the

allegations in the Sants’ complaint. Todd was employed as a corporate

controller for a successful company in McLean, Virginia. He enjoyed a stable,

highly paid position that allowed him to participate in a lucrative stock

program with yearly vesting rights.

He lived in Ashburn, Virginia, with his wife, Susan, and their young

child. Susan suffers from a host of serious health issues, including

fibromyalgia, Lyme disease, Meniere’s disease, and chronic migraines. She

had lengthy histories with her treating physicians in Virginia.

In October 2013, Todd accepted an offer from Branding to become

their Vice President of Finance, a position based in Pittsburgh, Pennsylvania.

Additionally, Branding indicated that it intended to promote Todd to Chief

Financial Officer (“CFO”) when its current CFO left, which was likely to

happen in the near future. Branding extended the offer via an offer letter

that Todd subsequently signed. This letter included a paragraph regarding

term of employment.

This offer does not fix a term of your employment. You have the right to terminate your employment at any time upon reasonable prior notice, for any reason (or no reason), and Branding Brand reserves the same rights.

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Upon accepting Branding’s offer, the Sants proceeded to sell their

Virginia residence at below-market price due to the time period involved.

They built a new home near Pittsburgh at substantial cost. Furthermore,

Todd sacrificed approximately $60,000 in additional vesting rights in his

former employer’s stock program.

Todd began working for Branding in late October 2013. In August

2014, he was promoted to CFO of Branding. In November 2014, he attended

Branding’s quarterly Board of Directors meeting, at which Branding’s Chief

Executive Officer (“CEO”), Christopher Mason, represented that Branding

had sold over $50,000 in recurring revenue to new clients in the third

quarter. Todd knew that Mason had already backdated those sales to the

second quarter. Apart from the backdated contracts, Todd knew that

Branding had not sold any new contracts in the third quarter.

Shortly thereafter, Todd confronted Branding’s Vice President of

Operational Reporting and Analysis, Allen Lu, regarding Mason’s

misrepresentation to the Board of Directors. Later that same day, Branding

terminated Todd’s employment without explanation.

The Sants subsequently filed a complaint asserting causes of action

sounding in breach of contract, promissory estoppel, wrongful discharge,

and loss of consortium. Branding filed preliminary objections in the form of

demurrers to all counts. After receiving briefs, the trial court sustained the

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preliminary objections and dismissed the Sants’ complaint. This timely

appeal followed.

Our standard of review where there is a challenge to the sustaining of

preliminary objections in the nature of a demurrer is well-settled. The

material facts set forth in the complaint and all inferences reasonably

deducible there from are admitted as true. See Price v. Brown, 545 Pa.

216, 221, 680 A.2d 1149, 1151 (1996). “The question presented by the

demurrer is whether, on the facts averred, the law says with certainty that

no recovery is possible. Where a doubt exists as to whether a demurrer

should be sustained, this doubt should be resolved in favor of overruling it.”

Id. (citation omitted).

On appeal, the Sants first argue that the trial court erred in concluding

that Todd was an at-will employee of Branding. While the Sants expend

significant effort in arguing whether they have overcome the at-will

presumption, we note that this case does not involve a presumption. Rather,

there is a written contract in the form of the signed offer letter. An

incomplete agreement can still be judicially enforced so long as the intent to

contract is clear and “there is a reasonably certain basis upon which a court

can provide an appropriate remedy.” Helpin v. Trustees of the University

of Pennsylvania, 969 A.2d 601, 610-611 (Pa. Super. 2009) (citation

omitted). Deficiencies in the terms of the agreement can be remedied

through reference to the actions taken by the parties during the course of

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the contract. See id. Though explicitly incomplete, neither party contends

that there was no intent to contract, and thus, the offer letter represents the

best evidence of the parties’ intentions on the terms contained within it. See

Commonwealth ex rel. Kane v. UPMC, 129 A3d 441, 463 (Pa. 2015).

We therefore begin our review by considering the meaning and effect

of the signed offer letter. We must construe it as we would construe any

other contract. Interpretation of a contract poses a question of law and our

review is plenary. See Charles D. Stein Revocable Trust v. General Felt

Industries, Inc., 749 A.2d 978, 980 (Pa. Super. 2000). “In construing a

contract, the intention of the parties is paramount and the court will adopt

an interpretation which under all circumstances ascribes the most

reasonable, probable, and natural conduct of the parties, bearing in mind the

objects manifestly to be accomplished.” Id. (citation omitted).

To give effect to the intent of the parties, we must start with the

language used by the parties in the written contract. See Szymanski v.

Brace, 987 A.2d 717, 722 (Pa. Super. 2009). Generally, courts will not

imply a contract that differs from the one to which the parties explicitly

consented. See Kmart of Pennsylvania, L.P. v. M.D. Mall Associates,

LLC, 959 A.2d 939, 944 (Pa. Super. 2008). We are not to assume that the

language of the contract was chosen carelessly or in ignorance of its

meaning. See id.

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Where the language of the contract is clear and unambiguous, a court

is required to give effect to that language. See Prudential Property and

Casualty Ins. Co. v. Sartno, 903 A.2d 1170, 1174 (2006). Contractual

language is ambiguous “if it is reasonably susceptible of different

constructions and capable of being understood in more than one sense.”

Hutchison v. Sunbeam Coal Co., 519 A.2d 385, 390 (Pa. 1986) (citation

omitted). “This is not a question to be resolved in a vacuum. Rather,

contractual terms are ambiguous if they are subject to more than one

reasonable interpretation when applied to a particular set of facts.” Madison

Constr. Co. v. Harleysville Mut. Ins. Co., 735 A.2d 100, 106 (Pa. 1999)

(citations omitted).

“Courts have consistently held that, under Pennsylvania law, the

existence of a disclaimer expressly disavowing any intent to contract are

sufficient to retain the at-will presumption.” Braun v. Wal-Mart Stores,

Inc., 24 A.3d 875, 943 (Pa. Super. 2011) (quoting McGough v. Broadwing

Communications, Inc., 177 F.Supp.2d 289 (D.N.J. 2001)). Here, the offer

letter explicitly stated that the employment relationship would be at-will.

Todd signed the offer letter. He then worked for Branding for over a year.

The parties thus explicitly provided for an at-will employment. There is

simply no opportunity or need to apply the presumption. We therefore

conclude that the additional consideration exception has no relevance to the

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facts alleged by the Sants. The trial court properly sustained the preliminary

objection to this claim.

Similarly, we conclude that the Sants’ second challenge, to the trial

court’s ruling on their claim for promissory estoppel, is unavailing. The Sants

explicitly condition this argument on their assertion that Todd was not an at-

will employee. See Appellants’ Brief, at 26. We have already concluded

otherwise. Accordingly, the Sants’ second argument merits no relief.

Next, the Sants contend that the trial court erred in sustaining the

preliminary objection to their wrongful discharge claim. Pursuant to a

wrongful discharge claim, an otherwise at-will employee may seek redress

from his former employer if he can establish that the employer (1) required

him to commit a crime, (2) prevented him from complying with a duty

imposed by statute, or (3) discharged him despite being specifically

prohibited from doing so by a statute. See Hennessy v. Santiago, 708

A.2d 1269, 1273 (Pa. Super. 1998). The Sants assert that Branding

discharged Todd when he refused to engage in a conspiracy to misrepresent

the company’s earnings to investors.

In their complaint, the Sants assert that Mason, Branding’s CEO,

misrepresented the company’s revenue to the company’s board of directors.

See Complaint, filed 1/6/15, at ¶¶ 21-24. If true, these facts would establish

that Mason had committed a crime. See 18 Pa.C.S.A. § 4107(a)(8).

Furthermore, the Sants have pled that Todd was CFO, and admit that he

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knew that Mason’s statements were false and misleading. Thus, he could

have arguably been subject to criminal charges as an accomplice or a

conspirator. Finally, the Sants have pled that Todd was discharged because

he notified the company’s vice president of operational reporting analysis of

the misrepresentations.

Given our standard of review, we must accept these pleadings as true.

Viewed as true, these pleadings establish that Todd was discharged for

refusing to expose himself to criminal liability. The Sants have thus pled

sufficient facts to survive a demurrer to this claim, and the trial court erred

in sustaining the preliminary objection.

Finally, the Sants contend that the trial court erred in sustaining the

preliminary objection to Susan’s claim for loss of consortium. The trial court

held that loss of consortium claims require a physical injury to a spouse, and

therefore the Sants’ assertion of purely emotional injuries to Todd were

insufficient as a matter of law. We need not reach the precise issue identified

by the trial court, however, as we conclude that the loss of consortium claim

is barred by the gist of the action doctrine. See The Brickman Group, Ltd.

v. CGU Insurance Company, Inc., 865 A.2d 918, 928 (Pa. Super. 2004)

(“We are not bound by the trial court’s rationale, and may affirm on any

basis.”).

Pennsylvania courts have long recognized the gist of the action

doctrine, which operates to keep breach of contract and negligence claims as

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separate and distinct causes of action. In essence, the doctrine draws a line

between tort actions, which are based upon breaches of duties imposed as a

matter of social policy, and contract actions, which are based upon breaches

of duties imposed by mutual consensus. See Pittsburgh Const. Co. v.

Griffith, 834 A.2d 572, 581-582 (Pa. Super. 2003). The doctrine’s purpose

is to maintain the distinction between the theories of breach of contract and

tort, and it precludes a plaintiff from recasting ordinary breach of contract

claims into tort claims. See Bash v. Bell Telephone Co. of Pennsylvania,

601 A.2d 825, 829 (Pa. Super. 1992).

The application of the doctrine is an issue of law. See e-Toll, Inc. v.

Elias/Savion Advertising, Inc., 811 A.2d 10, 15 (Pa. Super. 2002). Here,

while the Sants have raised a public policy exception to the otherwise at-will

employment relationship, the gist of the action is clearly contractual in

nature. Absent the employment agreement, Branding would have no duties

to the Sants. Tort remedies are thus precluded in this action, and the trial

court properly sustained the preliminary objections to Susan’s claim for loss

of consortium.

In summary we conclude that the trial court properly sustained

Branding’s preliminary objections to the Sants’ claim based upon additional

consideration, promissory estoppel, and Susan’s claim for loss consortium.

However, we conclude that the trial court erred in dismissing the Sants’

claim for wrongful discharge, as the facts pled by the Sants, if true, would

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entitle them to relief. We therefore affirm the order in part, reverse in part,

and remand for further proceedings consistent with this memorandum.

Order affirmed in part and reversed in part. Case remanded.

Jurisdiction relinquished.

Judgment Entered.

Joseph D. Seletyn, Esq. Prothonotary

Date: 8/16/2016

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