J-A28014-16
NON-PRECEDENTIAL DECISION - SEE SUPERIOR COURT I.O.P. 65.37
SHARED COMMUNICATIONS SERVICES IN THE SUPERIOR COURT OF OF ESR, INC., PENNSYLVANIA
Appellant
v.
WHTR REAL ESTATE LIMITED PARTNERSHIP, SPRINT COMMUNICATIONS COMPANY LP
No. 92 EDA 2016
Appeal from the Order Entered December 2, 2015 In the Court of Common Pleas of Chester County Civil Division at No(s): Nos. 90-04830 and 00-05539
SHARED COMMUNICATIONS SERVICES IN THE SUPERIOR COURT OF OF ESR, INC., PENNSYLVANIA
Appellant
v.
CALIFORNIA STATE TEACHERS’ RETIREMENT SYSTEMS
No. 92 EDA 2016
Appeal from the Order Entered December 2, 2015 In the Court of Common Pleas of Chester County Civil Division at No(s): Nos. 90-04830 and 00-05539
BEFORE: PANELLA, J., SHOGAN, J., and PLATT, J.*
MEMORANDUM BY PANELLA, J. FILED APRIL 13, 2017 ____________________________________________
* Retired Senior Judge assigned to the Superior Court. J-A28014-16
Appellant, Shared Communications Services of ESR, Inc., (“SCS”)
appeals from the order entered in the Chester County Court of Common
Pleas on December 2, 2015. On remand from this Court’s memorandum of
December 13, 2012, the trial court awarded SCS attorneys’ fees, costs, and
post-judgment interest as the prevailing party in a lawsuit against Appellee,
California State Teachers’ Retirement System (“CalSTRS”), and Defendant
WHTR Real Estate Limited Partnership (“WHTR”). SCS contends that the trial
court erred by failing to award the full amount of attorneys’ fees as
requested in SCS’s petition, failing to make a joint and several award of
attorneys’ fees and costs, and by denying its request for pre-judgment
interest. After careful review, we affirm in part, vacate in part, and remand
for modification of the judgment consistent with this memorandum.
A prior panel of this Court detailed the lengthy factual and procedural
history of this matter. Therefore, we need not repeat them in detail here and
instead direct the reader to that earlier memorandum decision. See Shared
Communications Services of ESR, Inc. v. Travelers Ins. Co., 2319 EDA
2011, at 4-10 (Pa. Super., filed December 13, 2012) (unpublished
memorandum). For the purposes of this appeal, we will briefly detail the
relevant factual and procedural history as follows. On June 8, 1990, SCS
initiated this action by writ of summons against Swedesford Road Joint
Venture I (“Swedesford”), Eastern Telelogic Corporation, a/k/a Teleport
Communications Group (“ETC”), and Sprint Communications Company, L.P.
(“Sprint”). Through its subsequently filed complaint, SCS alleged that in
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September 1986, it entered into an agreement with Swedesford (“STS
Agreement”) to exclusively provide shared tenant services to tenants in a
group of office buildings (collectively, the “Bay Colony”). SCS alleged that
Swedesford breached this STS Agreement by failing to advise the Bay
Colony tenants of SCS’s services.
Due to a bankruptcy filing by Swedesford, SCS’s complaint was not
filed until September 10, 1998. Between 1990 and 1998, Swedesford’s
interest in the Bay Colony and, as a result, the STS Agreement was assigned
first to the Travelers Insurance Company, MetLife Insurance Company, as
successor in interest (“Travelers”), and then, in 1994, to WHTR. Thus, when
SCS filed its complaint sounding in breach of contract, tortious interference
with prospective contractual and business relationships, tortious interference
with existing business relationships, and civil conspiracy, Travelers, ETC,
WHTR, and Sprint were all named as defendants. The trial court
subsequently entered a default judgment against Sprint and dismissed the
charges against Travelers and ETC, leaving WHTR as the sole defendant in
the matter.
Following a considerable motions practice and the dismissal of SCS’s
tort claims against WHTR as improper pursuant to the “gist of the action”
doctrine, SCS’s remaining breach of contract claim against WHTR proceeded
to a jury trial on March 1-6 of 2000. Prior to the jury returning with its
verdict, SCS and WHTR appeared to have reached a settlement agreement
and the jury was discharged. However, the settlement agreement ultimately
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failed, and despite SCS’s petition to enforce the agreement, the matter was
re-listed for trial. Subsequently, WHTR transferred the Bay Colony and the
STS Agreement to CalSTRS, which prompted SCS to file a separate
complaint alleging breach of contract, tortious interference with contractual
relationships, and tortious relationships with prospective contractual and
business relationships against CalSTRS.
Meanwhile, on December 20, 2001, the trial court granted a petition
filed by Sprint to open the default judgment previously entered in the
matter. The trial court severed the case against Sprint from the case against
WHTR and CalSTRS, and the parties, once again, engaged in a zealous
motions practice. In November 2003, the trial court entered an order
precluding SCS from offering, at the Sprint, WHTR and CalSTRS trials, “any
evidence of lost profits.” The trial court certified this ruling for interlocutory
appeal, and, based upon their interpretation of the STS Agreement, a prior
panel of this Court affirmed. Following a jury trial, a verdict was entered
against Sprint in the amount of $76,330.00.
Prior to the trial against WHTR and CalSTRS in 2009, each party filed a
motion for summary judgment. While the trial court denied the motions in
large part, it granted CalSTRS’s request to dismiss all tort claims against it.
Ultimately, following the jury trial in March 2009, a verdict was entered
against WHTR in the amount of $107,300.00 and against CalSTRS in the
amount of $40,000.00. Both parties filed post-trial motions and petitions for
attorneys’ fees and costs pursuant to a “prevailing party” clause in the STS
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Agreement. The trial court denied both the post-trial motions and the fee
petitions. All parties appealed from the judgment, and SCS appealed from
the trial court’s order denying its requested attorneys’ fees. This Court
affirmed the judgment, but vacated the order denying SCS’s petition for
attorneys’ fees and remanded the matter for the trial court to determine and
award attorneys’ fees to SCS as the prevailing party.
Following remand, the parties proceeded with a hearing on May 29 and
August 5, 2014, to determine the amount of attorneys’ fees and costs owed
to Appellant. At the hearing, Appellant presented evidence that its attorneys’
fees and costs, excluding claimed interest, totaled $2,225,617.66. On
December 2, 2015, the trial court ordered Appellee WHTR to pay SCS
$321,900.00 in attorneys’ fees and $196,971.28 in costs. It further ordered
CalSTRS to pay SCS $120,000.00 in attorneys’ fees and $73,593.66 in costs.
Through this order, the trial court also denied SCS’s request for prejudgment
interest on the attorneys’ fees and costs, fixed the per diem costs of post-
judgment interest on the jury awards, and reversed its prior holding that it
was entitled to prejudgment interest on the jury award. This timely appeal
followed.
On appeal, Appellant presents the following issues.
1. Did the trial court err in failing to award the full amount of legal fees requested in [SCS’s] [p]etition and supporting evidentiary submissions because, pursuant to the contractual fee-shifting provision applicable, such fees were reasonable and the amount awarded by the trial court was unreasonable and insufficient[.]
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2. Did the trial court err by reversing its prior ruling awarding prejudgment interest sua sponte five years after judgment inclusive of such interest had been entered and all appellate procedures (other than the determination of attorneys’ fees) had been adjudicated, thereby failing to include such prejudgment interest in its per diem calculation of post- judgment interest[.]
3. Did the trial court err when it failed to make a joint and several award of attorneys’ fees and costs where WHTR and CalSTRS were represented by a single counsel, in most instances filed joint papers, made common and overlapping argument and participated in a joint and highly litigious strategy and defense, which resulted in Defendants spending millions defending bona fide claims with common issues of law and fact[.]
Appellant’s Brief, at 4-5.
Prior to addressing SCS’s issues on the merits, we must first determine
whether SCS has properly presented their issues for our review. In its third
issue on appeal, SCS contends that the trial court erred in failing to make
WHTR and CalSTRS jointly and severally liable for attorneys’ fees and costs.
See Appellant’s Brief, at 39-43. SCS claims that the trial court erred by
failing to order Appellees jointly and severally liable for all fees and costs
because both WHTR and CalSTRS were represented by single counsel, filed
joint papers, and advanced similar arguments throughout litigation. See id.
at 39. However, we note that SCS fails to provide any legal authority that
would support its contention that the trial court erred by failing to make
Appellees jointly and severally liable for the fees and costs. See Pa.R.A.P.
2119(a) (requiring citation to pertinent legal authority in support of a party’s
legal argument). “The failure to develop an adequate argument in an
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appellate brief may result in waiver of the claim under Pa.R.A.P. 2119.”
Commonwealth v. Beshore, 916 A.2d 1128, 1140 (Pa. Super. 2007)
(citation, brackets, and quotation marks omitted).
Due to SCS’s failure to comply with the requirements of Pa.R.A.P.
2119(a), we are unable to provide meaningful review of this issue. Thus, we
find this issue waived. See, e.g., Beshore; In re Jacobs, 936 A.2d 1156,
1167 (Pa. Super. 2007).
Moving to the issues SCS preserved for appeal, it challenges the trial
court’s decision to award SCS attorneys’ fees and costs in an amount less
than requested by SCS. See Appellant’s Brief, at 4, 23-38. Initially, SCS
contends that the wording of the prior panel’s December 2012 memorandum
decision required the trial court, on remand, to award SCS all of the
attorneys’ fees and costs that it contends were incurred as the “prevailing
party.” See id., at 7, 11-12. Specifically, SCS contends that our directive for
the trial court to “determin[e] and award … SCS’s attorneys’ fees incurred in
connection with the dispute over the STS Agreement” requires that the trial
court award all of the attorneys’ fees incurred by SCS. See id., at 10
(emphasis omitted).
On the contrary, both the trial court and CalSTRS contest this reading
of the December 2012 memorandum decision and contend that the trial
court was permitted by law to examine the reasonableness of SCS’s request
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for $2,225,617.66 in attorneys’ fees and costs. See Appellee’s Brief, at 3.
See also Trial Court Opinion, 12/2/15, at 1.1 We agree.
As mentioned, a prior panel of this Court previously found that SCS
was entitled to attorneys’ fees and costs as the “prevailing party.” See
Shared Communications Services of ESR, Inc., 2319 EDA 2011, at 27.
Specifically, the panel found that
[a]s SCS properly notes, the STS Agreement contains a provision for the award of attorneys’ fees generated as a result of any dispute concerning that agreement. The sole question for the trial court’s consideration was whether either party was a “prevailing party” such that it would be entitled to such a fee. This Court in Profit Wize Marketing v. Weist, 812 A.2d 1270, 1275-1276 (Pa. Super. 2002), has provided guidance in making this determination, stating:
Consistent with this interpretation, we note that the noun, “prevailing party,” is commonly defined as “a party in whose favor a judgment is rendered, regardless of the amount of damages awarded.” While this definition encompasses those situations where a party receives less relief than was sought or even normal relief, its application is still limited to those circumstances where the fact finder declares a winner and the court enters judgment in that party’s favor. Such a pronouncement does not accompany a compromise or settlement. ____________________________________________
1 We note that both CalSTRS’s brief and the trial court’s opinion contend that the trial court was required to employ the reasonableness test in relation to the entire $3,310,460.37 requested by SCS for attorneys’ fees, costs, and interest. However, we have determined that the request for attorneys’ fees and costs must be addressed separately, and have thus subtracted the total amount of interest requested, $ 1,084,842.71, from the total amount requested, $ 3,310,460.37, to arrive at $ 2,225,617.66 in total attorneys’ fees and costs.
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Profit Wize Marketing, 812 A.2d at 1275-1276 (holding that a settlement agreement and compromise did not demonstrate that either party was the “prevailing party”).
A review of the record reveals … a March 24, 2009 verdict for $147,300.00. The fact-finder in both trials declared unequivocally SCS the winner. Therefore, we conclude that SCS is the prevailing party in both trials. Consequently, and pursuant to the terms of the STS Agreement, SCS is entitled to its attorneys’ fees. Accordingly we vacate the trial court’s January 14, 2011 order and remand for the determination and award of SCS’s attorneys’ fees incurred in connection with the dispute over the STS Agreement.
2319 EDA 2011, at 27.
In reaching this conclusion, the panel relied upon paragraph 19.06 of
the STS Agreement, which provided that “[i]n the event of any dispute
between the parties hereto arising out of or in connection with this
Agreement, the prevailing party shall be entitled to recover from the other
its reasonable attorneys’ fees and costs incurred in connection hereto.” STS
Agreement, 9/30/86, at ¶ 19.06 (emphasis added).
As we previously looked to the provisions of the STS Agreement to
determine whether SCS was entitled to attorneys’ fees and costs, it is a
given that we would look to the STS Agreement to determine the type of
attorneys’ fees and costs that are recoverable pursuant to the fee-shifting
provision. The STS Agreement clearly provides that the prevailing party is
entitled to “reasonable attorneys’ fees and costs.” Id. Thus, SCS is only
entitled to its attorneys’ fees incurred—to the extent they are reasonable.
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Further, even if the STS Agreement did not indicate that the prevailing
party was entitled to only its “reasonable attorneys’ fees and costs,” a trial
court is permitted to inquire as to the reasonableness of a request for
attorneys’ fees before awarding them. See McMullen v. Kutz, 985 A.2d
769, 777 (Pa. 2009). Thus, we find no merit to SCS’s contention that our
December 13, 2012 memorandum decision required the trial court to award
SCS the attorneys’ fees incurred without a reasonableness inquiry.
Next, SCS contends that even if the wording of the 2012
memorandum decision did not mandate the trial court to award the full
amount of fees, costs and expenses that it incurred against WHTR and
CalSTRS, it was still error for the trial court not to do so. See Appellant’s
Brief, at 20-22. As noted above, the trial court found that SCS’s request for
$2,225,617.66 in attorneys’ fees and costs was unreasonable. See Trial
Court Opinion, 12/2/15, at 1-16. Thus, the trial court awarded SCS
$321,900.00 from WHTR and $120,000.00 from CalSTRS as reasonable
reimbursement for attorneys’ fees, as well as $196,971.28 from WHTR and
$73,593.66 from CalSTRS for costs. See id., at 21.
“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, 682
A.2d 295, 299 (Pa. 1996) (citation omitted).
Our Supreme Court has set forth a number of factors a trial court must
consider in determining a reasonable award of attorneys’ fees, including:
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the amount of work performed; the character of the services rendered; the difficulty of the problems involved; the importance of the litigation; the amount of money or value of the property in question; the degree of responsibility incurred; whether the fund involved was ‘created’ by the attorney; the professional skill and standing of the attorney in his profession; the results he was able to obtain; the ability of the client to pay a reasonable fee for the services rendered; and very importantly, the amount of money or the value of the property in question.
In re LaRocca’s Trust Estate, 246 A.2d 337, 339 (Pa. 1968) (internal
quotation marks and citations omitted). Further, in reviewing the
reasonableness of an award of attorneys’ fees, we recognize that the amount
of attorneys’ fees awarded is
peculiarly within the discretion of the court of first instance. Its opportunities of judging the exact amount of labor, skill and responsibility involved, as well as its knowledge of the rate of professional compensation usual at the time and place, are necessarily greater than ours, and its judgment should not be interfered with except for plain error…. [T]he allowance or disallowance of counsel fees rests generally in the judgment of the court of first instance and its decision will not be interfered with except for palpable error.
Id., at 340 (internal citations omitted).
Neither party produced witnesses to testify regarding each invoice or
to assess the time or activity recorded by each of the persons on the
invoices. Instead, CalSTRS and SCS stipulated that the time entries were
factually accurate, and that it was for the trial court to determine if the time
entered by SCS during the course of litigation was reasonable. As such, both
parties agreed to rest on the invoices produced by SCS and the briefs
CalSTRS and SCS submitted in opposition to and in support of the invoices,
respectfully.
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In support of its request for legal fees, SCS offered more than 627
pages of time entries that amounted, in total, to its request for
$2,225,617.66 in legal fees. However, to a large degree, SCS did not
address the reasonableness of its individual time entries in its filings with the
trial court. Instead, SCS generally concluded that the amount requested in
attorneys’ fees and costs was inherently reasonable as it mirrored the legal
fees incurred by WHTR and CalSTRS over the course of the litigation.
Conversely, CalSTRS, in its filings, while noting that SCS’s action in
incurring more than two million dollars in attorneys’ fees and costs was
patently unreasonable, addressed the reasonableness of the individual, as
well as the categorical, time entries of SCS. CalSTRS noted that
approximately $72,835.512 of SCS’s claimed attorneys’ fees appeared to be
attributable to Sprint, and $23,165.00 appeared to be attributable to
Travelers, defendants that for the most part were not parties to the instant
action after 1999. Further, CalSTRS notes that a large number of the time
entries appeared to be block billed, and that SCS did not provide a
breakdown as to the hours expended on the WHTR matter versus the hours
expended on CalSTRS matters. Accordingly, CalSTRS notes that due to these
____________________________________________
2 We note that while CalSTRS initially indicates that $72,835.51 of all fees were attributable to Sprint, a sentence later it indicates that $72,379.51 should be deducted from the petition prior to determining any award.
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deficiencies, it was unable to assess the reasonableness of each individual
time entry.
After reviewing the documents submitted by both parties, the trial
court utilized the factors set forth in LaRocca and determined SCS incurred
an unreasonable amount of attorneys’ fees in litigating this matter. While the
trial court abided by the parties’ stipulation that all of the work claimed was
performed, the trial court found that SCS’s failure to realistically assess the
case prior to litigation caused an unnecessary amount of work to be
performed in the case.
Specifically, the trial court determined that SCS frivolously pursued
lost profit damages and tort causes of actions that were unavailable under
the clear language of the STS Agreement, inappropriately employed, and
thus incurred costs from, two law firms for the entirety of the litigation, and
failed to use knowledge gained from similar litigation to the case. The trial
court found that even when necessary motions were filed, the attorneys
spent an inordinate amount of time on each motion, further driving up the
claimed attorneys’ fees. Thus, given its review of SCS’s case strategies and
the LaRocca standards, the trial court concluded that “an award of three []
times the compensatory damage award [was] appropriate and constutite[d]
‘reasonable fees.’” Trial Court Opinion, 12/2/15, at 16. Additionally, the trial
court concluded that SCS was entitled to its full costs, and awarded costs
pursuant to this determination.
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On appeal, SCS contends that it was error for the trial court to use
hindsight and substantially reduce SCS’s attorneys’ fee award due to the
trial court’s opinion as to how SCS should have pursued its litigation
strategy. See Appellant’s Brief, at 25-38. Specifically, SCS disputes the trial
court’s ability to reduce its attorneys’ fee award based upon its opinion that
SCS frivolously pursued lost profit damages and tort causes of action,
inappropriately employed two law firms for the entirety of the litigation, and
failed to otherwise minimize its legal fees. See id. Additionally, as was its
main claim at the hearing addressing attorneys’ fees, SCS contends that one
need only look at CalSTRS’s similarly large legal fees incurred over the
course of litigation to determine that SCS’s purported legal fees were
reasonable. See id., at 9, 20, 24-25.
Accordingly, SCS urges us to remand to the trial court to enter an
order granting SCS all of the claimed legal fees involved. See id., at 22.
Pennsylvania Courts have previously addressed a trial court’s award of
attorneys’ fees where the fee claimed was disproportionate to the amount
awarded. In Mountain View Condominium Association v. Bomersbach,
734 A.2d 468 (Pa. Cmwlth. 1999), the Commonwealth Court3 held that a ____________________________________________
3 “We of course recognize that a decision of the Commonwealth Court is not binding precedent upon this Court; however, it may be considered for its persuasive value.” Holland ex rel. Holland v. Marcy, 817 A.2d 1082, 1083 n.1 (Pa. Super. 2002) (en banc) (citation and internal quotation marks omitted).
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trial court did not abuse its discretion in awarding $46,548.64 in attorneys’
fees on a $1,200.00 claim where the trial court found that the nature of the
litigation warranted the full award. However, it has been held that a trial
court does not abuse its discretion in awarding the prevailing party only a
portion of its fees where the party does not prove the reasonableness of its
request. See Township of Millcreek v. Angela Cres Trust of June 25,
1998, 142 A.3d 948 (Pa. Cmwlth. 2016) (affirming a trial court’s award of
$517,868.00 in attorneys’ fees costs and expenses where the prevailing
party failed to prove the reasonableness of its request for $3,359,900.33 in
attorney’s fees, costs and expenses).
Based upon these cases, the Commonwealth Court has found that
[t]his precedent indicates that, as long as the trial court reviews the record and considers factors such as the nature and length of the litigation, the responsibilities of the parties in affecting the nature and length of the litigation, and the competitiveness of the rate and time expended, it is difficult for an appellate court to hold that a trial court abused its discretion in issuing a particular award of attorney’s fees.
Arches Condominium Ass’n v. Robinson, 131 A.3d 122, 132-133 (Pa.
Cmwlth. 2015).
Here, the trial court appropriately applied the LaRocca factors to
SCS’s request for attorneys’ fees. Pursuant to the trial court’s findings of
fact, which are supported by the record, the trial court determined that the
amount of work performed was far in excess of what was necessary for the
difficulty of the case and the amount of money or the value of property in
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question. While SCS contests the way that the trial court came to this
conclusion, i.e., by applying hindsight to SCS’s trial strategy, we find that
the trial court adequately set forth its reasoning for these findings. As we are
required to give deference to the trial court’s factual findings and judgment,
we conclude that SCS’s argument lacks merit. See LaRocca, 246 A.2d at
340.
Further, we observe that we generally do not support a trial court’s
use of a multiplier, as applied to the compensatory damage award, to arrive
at a reasonable attorneys’ fee. However, our painstaking review of the
record reveals that it is not possible to determine the reasonableness of
SCS’s request from its voluminous time entries alone, as the entries appear
to include time expended on litigation that was separate from the instant
action, block billed time entries, and largely failed to differentiate between
the times expended on each of the defendants in this matter. Additionally,
we have no other way to assess the reasonableness of SCS’s request as SCS
failed to present any testimony regarding the reasonableness of its individual
time entries and largely rested upon generalized conclusions concerning its
entitlement to the attorneys’ fees in its petitions.
Therefore, under these specific circumstances, we cannot say this
decision was “palpable error,” given the fact that SCS presented minimal
evidence to prove the reasonableness of its request for attorneys’ fees and
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costs. Id., at 340. Accordingly, SCS’s contention that the trial court erred in
fashioning its award of attorneys’ fees is without merit.
Lastly, SCS claims that the trial court erred by failing to award
prejudgment interest on the awards for the jury verdict and attorneys’ fees
and costs. See Appellant’s Brief, at 4. First, Appellant claims that it was
error for the trial court to retroactively eliminate the prejudgment interest of
$76,986.19 against WHTR and $20,189.06 against CalSTRS as the trial court
had previously awarded SCS under its January 13, 2011 order. See
Appellant’s Brief, at 44. It contends that the trial court was without
jurisdiction to modify the terms of its prior order more than four years after
the entry of its previous order. See id. at 45.4 We agree.
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4 SCS also contends that, even if the trial court had the jurisdiction to eliminate its previous award of prejudgment interest on the jury verdict, this was error as Pennsylvania state law provides that prejudgment interest “is a legal right when there has been a recovery based on a breach of contract cause of action.” Appellant’s Brief, at 46 (citing Verner v. Shaffer, 500 A.2d 479, 482 (Pa. Super. 1985). SCS’s statement of the law is misleading. In Pennsylvania, while trial courts must award prejudgment interest on some breach of contract claims, trial courts have discretion on whether or not to award prejudgment interest on other breach of contract claims. See Fidelity Bank v. Com. Marine and Gen. Assurance Co., 592 F.Supp. 513, 522 (E.D. Pa. 1984). Specifically, the Restatement (Second) of Contracts, which Pennsylvania follows, provides that prejudgment interest is awarded as a matter of right only on breach-of-contract damages ascertainable from the terms of the contract, while, in all other circumstances, prejudgment interest is awarded at the trial court’s discretion. See Restatement (Second) of Contracts § 354.
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Under Pennsylvania law, a trial court is permitted to modify or rescind
any order within thirty days, provided that no appeal from the order has
been taken. See 42 Pa.C.S.A. § 5505. Following this thirty-day period, the
order becomes final and the trial court is without jurisdiction to sua sponte
modify an order unless it is to correct a clerical mistake which does not
require the exercise of discretion. See Stockton v. Stockton, 698 A.2d
1334, 1338 (Pa. Super. 1997).
Here, the record reflects that neither party requested that the trial
court revisit its decision concerning prejudgment interest. Thus, because the
decision to vacate an award requires an exercise of discretion, it was clearly
error for the trial court to revisit this matter and vacate its previous award to
SCS of $76,986.19 in prejudgment interest from WHTR and $20,189.06 in
prejudgment interest from CalSTRS.
Further, the trial court’s action patently exceeded the scope of our
remand order. “A trial court has an obligation to comply scrupulously,
meticulously, and completely with an order of the [appellate c]ourt
remanding a case to the trial court.” Commonwealth v. Williams, 877
A.2d 471, 474 (Pa. Super. 2005) (citation omitted). Issues not included in
the remand mandate cannot be considered by the trial court. See id., at
475.
We therefore remand this matter to the trial court and direct the
reinstatement of these prejudgment interest awards.
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Finally, SCS contends that the trial court erred by failing to award it
prejudgment interest on its request for attorneys’ fees. See Appellant’s
Brief, at 52. “Our review of an award of prejudgment interest is for abuse of
discretion.” Kaiser v. Old Republic Ins. Co., 741 A.2d 748, 755 (Pa.
Super. 1999) (citation omitted).
Under Pennsylvania law, the right to prejudgment interest in a
contractual dispute “begins at the time payment is withheld after it has been
the duty to the debtor to make such payment.” Fernandez v. Levin, 548
A.2d 1191, 1193 (Pa. 1988). There is a dearth of Pennsylvania state law
addressing a request for prejudgment interest on an award of attorneys’ fees
under a contractual fee-shifting provision. However, the United States Court
of Appeals for the Third Circuit has interpreted Pennsylvania law in relation
to this exact issue.
In PPG Indus., Inc. v. Zurawin, the Court held that because
Pennsylvania law provides that prejudgment interest does not accrue until
the time payment is withheld, prejudgment interest cannot accrue on an
award of attorneys’ fees and costs pursuant to a contractual fee-shifting
provision because the obligation to pay these fees does not arise until the
trial court enters a final judgment. See 52 Fed. App’x 570, 581 (3d Cir.
2002).
We agree with the Third Circuit’s interpretation of Pennsylvania state
law and adopt it as our own. Thus, because prejudgment interest does not
arise on an award of attorneys’ fees and costs pursuant to a contractual fee-
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shifting provision, we cannot find that it was error for the trial court to fail to
award prejudgment interest on SCS’s award of attorneys’ fees and costs.
Order affirmed in part, vacated in part. Remand for modification of the
judgment consistent with this memorandum. Jurisdiction relinquished.
Judgment Entered.
Joseph D. Seletyn, Esq. Prothonotary
Date: 4/13/2017
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