Opinion
J-A03011-17 No. 812 MDA 2016
04-04-2017
FRANK MARANO AND DONALD MARANO Appellants v. FULTON BANK, N.A., D/B/A FULTON FINANCIAL ADVISORS AND FULTON FINANCIAL ADVISORS, N.A. Appellee
NON-PRECEDENTIAL DECISION - SEE SUPERIOR COURT I.O.P. 65.37
Appeal from the Order Entered April 26, 2016
In the Court of Common Pleas of Lancaster County
Civil Division at No(s): CI-15-02499 BEFORE: LAZARUS, J., STABILE, J., and DUBOW, J. MEMORANDUM BY LAZARUS, J.:
Frank Marano and Donald Marano (collectively, "Plaintiffs/Maranos") appeal from the order, entered in the Court of Common Pleas of Lancaster County, granting Appellees, Fulton Bank, N.A. (d/b/a Fulton Financial Advisors) and Fulton Financial Advisors, N.A., ("Defendants/Fulton"), summary judgment on their counterclaims, entering judgment in the amount of $300,151.04, plus accrued interest, against Frank Marano, and in the amount of $720,279.08, plus accrued interest, against Donald Marano, awarding Fulton attorneys' fees and costs, and dismissing, with prejudice, Plaintiffs' complaint in its entirety. After careful review, we affirm.
The Maranos became employees of Fulton on December 15, 2008; they were hired as financial consultants for the bank. In connection with their employment, they entered into and executed offer letters (letters), new hire bonus letter (bonus letters), promissory notes (notes), non-solicitation and confidentiality agreements (agreements), and financial advisor agreements (advisor agreements) (collectively, "employment documents") with Fulton. The employment documents did not contain integration clauses. As set forth in their bonus letters and notes, Fulton loaned Frank Marano $554,125 and Donald Marano $1,329,746 - representing the value of Plaintiffs' last twelve months of commissions earned at their prior employer, Wachovia. Fulton agreed to repay the debt by reducing and ultimately eliminating the note balance over the course of Plaintiffs' employment.
Prior to the fall of 2008, the Maranos were licensed securities and investment brokers at Wachovia.
According to the Maranos, financial advisors typically execute promissory notes with their employers in which a bank, like Fulton, "would pay bonuses to the Maranos, the Maranos would conditionally agree to repay the bonuses as set forth in the promissory notes, but [the bank] would progressively reduce and ultimately eliminate the balance owing on the promissory notes during the course of the Maranos' employment with [the bank]." See Maranos' Complaint, 8/22/13, at 7.
On August 22, 2013, Plaintiffs terminated their employment with Fulton without notice. At the time of their termination, the Maranos had failed to pay the balance due under the notes. On August 22, 2014, Plaintiffs filed a complaint against Fulton alleging six counts, including fraud, negligent misrepresentation, breach of contract, promissory estoppel, unjust enrichment, and declaratory judgment. Fulton filed preliminary objections based on improper venue and the case was transferred from Montgomery County to Lancaster County due to a forum selection clause in the parties' promissory notes. Fulton filed an answer and counterclaims for breach of the promissory notes and unjust enrichment.
On October 15, 2015, Fulton filed a summary judgment motion; Plaintiffs filed a response to the motion. The court held oral argument on the motion, after which it requested further briefing by the parties on the issue of "completeness" of a contract. On April 26, 2016, the court entered an order granting Fulton's summary judgment motion, dismissing the Plaintiffs' complaint, granting Fulton attorneys' fees and costs and awarding judgment in favor of Fulton in the amount of $300,151.04 (as against Frank Marano) and in the amount of $720,279.08 (as against Donald Marano).
Plaintiffs filed a timely notice of appeal and court-ordered Pa.R.A.P. 1925(b) concise statement of matters complained of on appeal in which they raise the following issues for our consideration:
(1) The Honorable Lower Court erred in application of relevant law to the issues of "fraud in the inducement" and "fraud" raised in [the Plaintiffs'] complaint.
(2) The Honorable Lower Court erred by granting Fulton's Motion for Summary Judgment and Dismissal when there existed genuine issues of fact and issues of law set forth in [the Plainiffs'] Complaint.
(3) The Honorable Lower Court erred in granting Summary Judgment and Dismissal as to Count II[, negligent misrepresentation of the Plaintiffs' complaint].
(4) The Honorable Lower Court erred in granting Summary Judgment and Dismissal as to Count III[, breach of contract,] of [the Plaintiffs'] Complaint.
(5) The Honorable Lower Court erred in entering Summary Judgment and Dismissal as to Count IV[, promissory estoppel,] of [the Plaintiffs'] Complaint.
(6) The Honorable Lower Court erred in entering Summary Judgment and Dismissal on Count V[, unjust enrichment,] of [the Plainiffs'] Complaint.
(7) The Honorable Lower Court erred in entering Summary Judgment and Dismissal as to Count VI[, declaratory relief,] of [the Plaintiff's] Complaint.
(8) The Honorable Lower Court erred in entering Summary Judgment on the Motion of Fulton on the promissory notes.
Our standard of review in cases of summary judgment is well-settled. This court will only reverse the trial court's entry of summary judgment where there was an abuse of discretion or an error of law. Merriweather v. Philadelphia Newspapers , Inc., 684 A.2d 137, 140 (Pa. Super. 1996). Summary judgment is proper when the pleadings, depositions, answers to interrogatories, admissions on file, and affidavits demonstrate that there exists no genuine issue of material fact and the moving party is entitled to judgment as a matter of law. Pa.R.C.P. 1035.2. In determining whether to grant summary judgment a trial court must resolve all doubts against the moving party and examine the record in a light most favorable to the non-moving party. Id.
Plaintiffs contend that in order to persuade them to leave their prior employer, Wachovia, and accept employment at Fulton, Defendants told them that Fulton was in the process of building an investment and securities business that would soon be the leader in the banking and financial services industry. Plaintiffs also assert that they told Fulton that their income was substantially dependent upon referrals of bank customers with significant assets, and that they would not leave Wachovia unless Fulton could assure them that they would continue to receive a continuing and growing flow of referrals from Fulton's bank customers. In order to induce them to work at Fulton, Plaintiffs claim that Defendants represented they would "provide the significant referrals when [Plaintiffs] commenced employment and on [a] continuing basis thereafter." Plaintiffs' Brief, at 10.
It is well established that:
Where the parties, without any fraud or mistake, have deliberately put their engagements in writing, the law declares the writing to be not only the best, but the only, evidence of their agreement. All preliminary negotiations, conversations and verbal agreements are merged in and superseded by the subsequent written contract and unless fraud, accident or mistake be averred, the writing constitutes the agreement between the parties, and its terms and agreements cannot be added to nor subtracted from by parol evidence.
Gianni v. Russell & Co., [] 126 A. 791, 792 ([Pa.] 1924) (citations omitted); see also Scott v. Bryn Mawr Arms , Inc ., [] 312 A.2d 592, 594 ([Pa.] 1973). Therefore, for the parol evidence rule to apply, there must be a writing that represents the "entire contract between the parties." Gianni , 126 A. at 792. To determine whether or not a writing is the parties' entire contract, the writing must be looked at and "if it appears to be a contract complete within itself, couched in such terms as import a complete legal obligation without any uncertainty as to the object or extent of the [parties'] engagement, it is conclusively presumed that [the writing represents] the whole engagement of the parties[.]" Id. An integration clause
which states that a writing is meant to represent the parties' entire agreement is also a clear sign that the writing is meant to be just that and thereby expresses all of the parties' negotiations, conversations, and agreements made prior to its execution. See HCB Contractors [ v. Liberty Place Hotel Assoc.], 652 A.2d [1278,] 1280 [(Pa. 1994)].PNC Bank v. Bluestream Tech., Inc., 14 A.3d 831, 841-42 (Pa. Super. 2010) (headnotes, footnotes and some citations omitted).
Once a writing is determined to be the parties' entire contract, the parol evidence rule applies and evidence of any previous oral or written negotiations or agreements involving the same subject matter as the contract is almost always inadmissible to explain or vary the terms of the contract. See Bardwell v. Willis Co., [] 100 A.2d 102, 104 ([Pa.] 1953)[.] One exception to this general rule is that parol evidence may be introduced to vary a writing meant to be the parties' entire contract where a party avers that a term was omitted from the contract because of fraud, accident, or mistake. See HCB Contractors , 652 A.2d at 1279; Bardwell , 100 A.2d at 104. In addition, where a term in the parties' contract is ambiguous, "parol evidence is admissible to explain or clarify or resolve the ambiguity, irrespective of whether the ambiguity is created by the language of the instrument or by extrinsic or collateral circumstances." Estate of Herr , [] 161 A.2d 32, 34 ([Pa.] 1960); see also Waldman v. Shoemaker , [] 80 A.2d 776, 778 ([Pa.] 1951).
Moreover, while "[a]n integration clause stating the parties intend the writing to represent their entire agreement is a clear sign the writing expresses all of the parties' negotiations, conversations and agreements made prior to its execution," DeArmitt v. New York Life Ins. Co., 73 A.3d at 589-90 (Pa. Super. 2013), its absence does not automatically subject the written agreement to parol evidence. Kehr Packages v. Fidelity Bank , N.A., 710 A.2d 1169, 1173 (Pa. Super. 1998). Rather, in the absence of an integration clause, a court must examine the text of the parties' agreement to determine its completeness. Id.
In its Pa.R.A.P. 1925(a) opinion, the trial court found: (1) the clear and unambiguous terms of the employment documents set forth the critical conditions of the parties' employment relationship which embodied the full intent of the parties and, thus, constituted a fully integrated contract; (2) the parol evidence rule applies and any of the parties' prior oral or written negotiations, including claims of fraudulent statements made by Fulton, were inadmissible; (3) the Maranos did not produce evidence to prove fraud in the inducement or execution; (4) the Maranos' negligent misrepresentation claim cannot be based upon unfulfilled promises to do acts in the future; (5) equitable theories of promissory estoppel and unjust enrichment cannot succeed where written agreements between the parties exist; (6) clear and unambiguous language of promissory notes and bonus letters set forth that Fulton agreed to pay amounts required to be repaid by the Maranos while they remained employed by Fulton and that upon termination from Fulton, the Maranos agreed to repay all unpaid amounts under the notes; (7) the Maranos admitted that they agreed to and signed all the employment documents, including the offer letters, upon their commencement of employment with Fulton; (8) that when they terminated their employment with Fulton in August 2013, the Maranos had failed to pay outstanding balances and interest due under the notes; and (9) any issue relating to proper interest to be charged on and any agreed-upon set-off against the principal balance of the promissory notes is properly raised at a future damages hearing.
Specifically, the Maranos base this claim on the provision in the parties' bonus letters indicating that "while the Promissory Note remains outstanding, in any calendar year that [the Maranos] generate a $100,000 increase in [their] recurring gross dealer concession ("GDC") . . . above [their] previous calendar year's recurring GDC, [Fulton] will make an additional payment on the Promissory Note equal to 13.33% of the original loan balance of the Promissory Note[.]" New Hire Bonus Letter, 12/17/08, at 2.
After reviewing the parties' briefs, the certified record, issues raised on appeal, and relevant case law, we conclude that the trial court opinion, authored by the Honorable David L. Ashworth, cogently addresses the issues raised on appeal by the Maranos. We, therefore, rely upon Judge Ashworth's decision in affirming the trial court's grant of summary judgment in favor of Fulton. The parties are directed to attach a copy of Judge Ashworth's decision in the event of further proceedings in the matter.
Order affirmed. Judgment Entered. /s/_________
Joseph D. Seletyn, Esq.
Prothonotary Date: 4/4/2017
In their reply brief, the Maranos claim that the trial court incorrectly concluded that the documents constituted a fully integrated contract between the parties. Specifically, they refer to the fact that the parties' promissory notes stated that "[n]either this letter, nor the existence of the New Hire Bonus, constitutes a contract of employment." We find this argument unpersuasive. See Huegel v. Mifflin Construction Co., 796 A.2d 350 (Pa. Super. 2002) (where several instruments are made part of single transaction, they will be read together and each construed with reference to the other even if instruments executed at different times and do not in terms refer to each other). Moreover, it is "well settled in this Commonwealth that the parol evidence rule applies to the obligations set forth in a promissory note [and that t]he limitation or enlargement of any of its provisions by an alleged oral agreement that varies, modifies, or destroys the terms of the instrument is prohibited by the parol evidence rule." Gitt v. Myers , 417 A.2d 664 (Pa. Super. 1979). Compare Rose v. Food Fair Stores , Inc., 262 A.2d 851, 853 (Pa. 1970) ("purpose of parole evidence rule is . . . 'to preserve the integrity of written agreements by refusing to permit the contracting parties to attempt to alter the import of their contract through the use of contemporaneous [or prior] oral declarations.'") (emphasis added) with LeDonne v. Kessler , 389 A.2d 1123, 1127 n.4 (Pa. Super. 1978) ("parol evidence rule, generally speaking, does not apply to receipts, letters, statements or books of account and other writings which do not purport to be a complete contract or vest or extinguish a legal right."). --------
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