Opinion
J-A08005-18 No. 1234 EDA 2017
08-21-2018
EDU, LLC Appellant v. PATRICIA M. ROTA AND TODAY'S CHILD LEARNING CENTERS, INC.
NON-PRECEDENTIAL DECISION - SEE SUPERIOR COURT I.O.P. 65.37
Appeal from the Order Entered March 29, 2017
In the Court of Common Pleas of Montgomery County
Civil Division at No(s): 2014-19570 BEFORE: PANELLA, J., LAZARUS, J., and STRASSBURGER, J. MEMORANDUM BY PANELLA, J.
Retired Senior Judge assigned to the Superior Court.
Appellant, EDU, LLC, appeals from the order granting summary judgment in favor of Appellees, Patricia M. Rota and Today's Child Learning Centers, Inc. ("TCLC") and entering declaratory judgment in favor of Appellees as to Count 1 of Appellees' Counterclaim. The trial court's purpose in issuing the declaratory judgment was to confirm its finding that EDU had failed to exercise the purchase option. We affirm based on the trial court opinion.
Because we found the contentions of Appellees' Motion to Dismiss, filed on January 8, 2018, to lack merit, we also deny the said Motion. The Motion raised irregularities in Appellant's brief, none of which impeded our ability to review and evaluate this appeal.
The trial court filed a Memorandum and Order that addressed the single issue raised in the Appellant's Brief. See Trial Court Memorandum and Order, 3/29/17. See also Rule 1925(a) Opinion, 5/5/17. In its memorandum, the trial court fully and correctly sets forth the relevant facts and procedural history of this case. Therefore, we have no reason to restate them at length here.
For context and the convenience of the reader, we note briefly that the over-arching issue in this case is whether EDU timely and properly exercised a Purchase Option contained in a Memorandum of Understanding ("MOU") executed by the parties. TCLC, which is owned in whole by Rota, operates a number of childcare facilities. In August 2013, the parties entered into a Memorandum of Understanding in which the parties agreed that EDU would be the new manager of TCLC's business. The MOU contained a termination provision, and in the event of termination, the MOU specified that EDU had an option to purchase the stock of TCLC at terms specified therein:
(E)ither Company [TCLC] or EDU may terminate this agreement upon thirty (30) days (10 days during the transition phase) advance written notice, with the understanding that if EDU is terminated during the vested phase, EDU shall have the option to purchase the stock of Owner [Rota] at a price not less than Base Value, and not more than six (6) times (i) the EDIDTA at that time, plus (ii) Owner's annual salary package at that time, if any, plus (iii) Ray Townsend's annual salary package at that time, if any (Collectively, "Enterprise Value").
An Addendum to the MOU was eventually reached by the parties on December 4, 2013, which defined Base Value to be $4,000,000.
The parties separated their contractual relationship in May 2014, and then exchanged in a number of correspondences regarding the purchase option. Unfortunately, their relationship soured, with Rota discontinuing all ties with EDU. The communications ended with EDU taking the position that it properly and timely exercised its purchase rights under the previously mentioned option terms of the MOU, and Appellees rejecting those attempts as not conforming to the MOU.
EDU initiated this lawsuit on July 3, 2014, and in its Fourth Amended Complaint filed on November 17, 2014, asserted six counts: (1) Breach of Contract; (2) Appointment of a Custodian; (3) Accounting; (4) Specific Performance; (5) Unjust Enrichment; and (6) Equitable Lien/Constructive Trust. In the Answer to the Fourth Amended Complaint, specifically Paragraph 31, the Appellees denied that EDU had exercised the Purchase Option and specifically alleged that EDU never communicated an offer with the terms identified in the Purchase Option ("EDU has never exercised the option limited to such terms . . . .").
Eventually, the parties cross-filed motions for summary judgment. The trial court granted summary judgment and declaratory relief in favor of Appellees. This appeal followed.
The overlapping question raised in this case is whether EDU properly exercised its rights under the Purchase Option. See Appellants' Brief, at 9.
Initially, we note our standard of review of a trial court's decision in a declaratory judgment action is narrow. Because declaratory judgment actions arise in equity, we will set aside the judgment of the trial court only where it is not supported by adequate evidence. The test is not whether we would have reached the same result on the evidence presented, but whether the trial court's conclusion can reasonably be drawn from the evidence. See Nationwide Mut. Ins. Co. v. Cummings , 652 A.2d 1338, 1340-1341 (Pa. Super. 1994).
Our standard of review of a challenge to an order granting summary judgment is as follows:
We may reverse if there has been an error of law or an abuse of discretion. Our standard of review is de novo, and our scope plenary. We must view the record in the light most favorable to the nonmoving party and all doubts as to the existence of a genuine issue of material fact must be resolved against the moving party.Gubbiotti v. Santey , 52 A.3d 272, 273 (Pa. Super. 2012) (citations omitted).
Furthermore,
[in] evaluating the trial court's decision to enter summary judgment, we focus on the legal standard articulated in the summary judgment rule. The rule states that where there is no genuine issue of material fact and the moving party is entitled to relief as a matter of law, summary judgment may be entered. Where the nonmoving party bears the burden of proof on an issue, he may not merely rely on his pleadings or answers in order to survive summary judgment. Failure of a non-moving party to adduce sufficient evidence on an issue essential to his case and on which he bears the burden of proof establishes the entitlement of the moving party to judgment as a matter of law.
After a comprehensive review of the record, the briefs of the parties, the applicable law, and the well-reasoned memorandum of the trial court, we conclude that there is no merit to the issue Appellant has raised on appeal. The trial court properly disposed of the question presented herein.
As noted by the trial court, all of the relief requested in the Appellant's six count Amended Complaint is conditioned upon proof that EDU properly exercised the Purchase Option contained in the MOU. After a thorough review of depositions and exhibits, the trial court aptly concluded that EDU did not submit an acceptance of the minimum amount of terms specified in the MOU, but instead made a counter-offer, or reply, to Appellees. This response, which added qualifications and conditions to the purchase option terms, could not be considered an acceptance of the Purchase Option, and therefore the Appellant has no basis for its action against Appellees.
Accordingly, we affirm on the basis of the well-reasoned memorandum by the Honorable Steven C. Tolliver, Sr., dated March 29, 2017, in Civil Division No. 2014-19570, Court of Common Pleas of Montgomery County, PA.
Order affirmed. Motion denied. Judgment Entered. /s/_________
Joseph D. Seletyn, Esq.
Prothonotary Date: 8/21/18
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