Baran, J. v. George Weston Bakeries

J-A23038-18

NON-PRECEDENTIAL DECISION - SEE SUPERIOR COURT I.O.P. 65.37

JOSEPH BARAN IN THE SUPERIOR COURT

OF PENNSYLVANIA

Appellant

v.

GEORGE WESTON BAKERIES, INC., AND

GEORGE WESTON BAKERIES

DISTRIBUTION, INC.

Appellees No. 380 WDA 2018

Appeal from the Judgment Entered March 12, 2018

In the Court of Common Pleas of Allegheny County

Civil Division at No.: GD-08-21117

BEFORE: BOWES, SHOGAN, and STABILE, JJ.

MEMORANDUM BY STABILE, J.: FILED JANUARY 7, 2019

Appellant Joseph Baran appeals from the March 12, 2018 judgment

entered in the Court of Common Pleas of Allegheny County (“trial court”)

against him and in favor of Appellees George Weston Bakeries, Inc., and

George Weston Bakeries Distribution, Inc. (hereinafter, “Weston”) following

the denial of his post-trial motions seeking judgment notwithstanding the

verdict (“JNOV”). Upon review, we affirm.

The facts and procedural history of this case are undisputed.1 In 1999,

Appellant entered into an exclusive distribution agreement (the “Agreement”)

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1 Unless otherwise specified, some background facts are taken from the June

9, 2010 memorandum issued by a prior panel of this Court. See Baran v.

George Weston Bakeries, Inc., 4 A.3d 681 (Pa. Super. Filed June 9, 2010)

(unpublished memorandum).

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with Weston’s predecessor company, whereby he agreed to use his best

efforts to sell the company’s fresh-baked products along his route, designated

as “sales area #1269” (the “Route”). In return, he received a twenty percent

commission on those sales.

In 2008, Weston sent Appellant a letter terminating the Agreement

based on numerous perceived violations of the Agreement over the years.

Although Appellant still owned the Route and received income from it, Weston

assumed control and operation of the Route after termination. Weston

operated the Route by hiring temporary drivers. Soon thereafter, Weston

expressed its intention to sell the Route at a fair market price on Appellant’s

behalf.

Appellant subsequently filed the instant civil complaint against Weston,

asserting breach of contract, breach of implied covenant of good faith and fair

dealing, tortious interference with advantageous business relationships, and

civil conspiracy. Appellant also sought relief in the form of punitive damages,

as well as a preliminary injunction to enjoin Weston’s sale of his distribution

rights in the Route and to reinstate him as Weston’s independent operator of

the Route.

Following a hearing, on February 12, 2009, the trial court granted a

preliminary injunction. The trial court concluded that although it was not

persuaded to issue an injunction requiring Weston to reinstate Appellant as

the Route’s operator, it found reasonable grounds to issue an injunction

prohibiting Weston from selling Appellant’s exclusive distribution rights in the

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Route until the matter could be fully adjudicated. On appeal, we affirmed the

trial court’s issuance of the preliminary injunction in Appellant’s favor. See

Baran, supra.

On June 14, 2013, Weston filed a motion for partial summary judgment,

arguing that Appellant was not entitled to recover lost profits under the

Agreement, which was governed by New York law. Following Appellant’s

response, the trial court granted Weston’s motion for partial summary

judgment on November 21, 2014.

The case eventually proceeded to a bench trial, after which the trial

court made the following factual findings:

In 1962, at the age of five, [Appellant] began working in the

bread industry by delivering bread door to door with his father.

By 1985, [Appellant] owned a delivery truck and was an

independent contractor for Bestfoods Baking Distribution

Company (“Bestfoods”) delivering bread and other similar

products to grocery stores in the West Mifflin area. In 1999,

Bestfoods and [Appellant] entered into [the Agreement] for

[Appellant] to distribute premium products, such as Thomas’®

English muffins and Brownberry® breads. The Agreement made

[Appellant] the exclusive distributor of those products in the West

Mifflin and Homestead areas. In approximately 2004, [Weston]

acquired Bestfoods, including the rights and duties under the

[A]greement with [Appellant].

Around this time, significant changes affecting [Appellant’s]

distribution area were taking place. The large “Waterfront”

shopping district along the Monongahela river opened in the

Homestead area, and nationwide retailers located in the

distribution area, including Walmart, Target and Sam’s Club,

increased their sales of foods. To accommodate these changes,

Weston believed that [Appellant] needed to change his delivery

methods. Weston suggested that [Appellant] have a family

member or an employee assist him, or that he “split his route” by

selling a portion of the distribution area to another independent

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operator. [Appellant], believing these suggestions would reduce

his income, declined to implement them or any other change in

his delivery methods.

In 2006, 2007, and 2008 Weston sent [Appellant] eight

letters that specified conduct by him that breached the

[A]greement and allowed him three days to cure the breaches. In

July 2008, after a Walmart serviced by [Appellant] removed

Weston’s shelf space in the deli section of the store and

reallocated it to a competitor, Weston notified [Appellant] the

[A]greement was terminated. Weston instructed [Appellant] to

sell his distribution rights to a qualified purchaser within ninety

days, with Weston operating [Appellant’s] business, for his

account, pending the sale.

Trial Court Opinion, 5/14/18, at 1-2. Based on the foregoing findings, the trial

court found in favor of Weston, dissolved the February 12, 2009 preliminary

injunction, and denied Appellant’s request for a permanent (mandatory)

injunction. The trial court concluded that Appellant “repeatedly breached

Section 4.1 of the [Agreement]” and “never cured many of the breaches,

which under Section 8.3 ‘constitute a chronic breach and threaten significant

harm to [Weston], its trademarks or commercial reputation.’” Trial Court

Order, 12/11/17, at ¶ 2. Given Appellant’s breaches, the trial court concluded

that Weston “was entitled to terminate the [A]grement.” Id. at ¶ 3.

Appellant timely filed post-trial motions, seeking JNOV or a new trial.

Specifically, Appellant argued that “the evidence produced at trial by both

[Appellant] and [Weston] clearly establishes there were no repeated breaches

under Section 4.1 of the [Agreement] which constituted a chronic breach.”

Post-trial Motion, 12/17/17, at ¶ 1. Following a hearing, the trial court denied

Appellant post-trial relief on February 20, 2018. On March 12, 2018, the trial

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court’s verdict was reduced to judgment. Appellant appealed to this Court.

The trial court directed Appellant to file a Pa.R.A.P. 1925(b) statement of

errors complained of on appeal. Appellant complied, raising two assertions of

error. In response, the trial court issued a Pa.R.A.P. 1925(a) opinion.

On appeal, Appellant presents two issues for our review:

[I.] Whether the lower court abused i[t]s discretion and

committed an error of law in ruling that [Appellant] had breached

the contract in question.[2]

[II.] In the second appealable issue [Appellant] suggests the

lower court abused its discretion and committed an[] error of law

when it ruled that lost profits were not recoverable in this instant

action because they were not permitted by paragraph 11.12 of the

contract at issue.

Appellant’s Brief at 3.3

Our scope and standard of review of these claims is well-defined.

Our appellate role in cases arising from non-jury trial verdicts is

to determine whether the findings of the trial court are supported

by competent evidence and whether the trial court committed

error in any application of the law. The findings of fact of the trial

judge must be given the same weight and effect on appeal as the

verdict of a jury. We consider the evidence in a light most

favorable to the verdict winner. We will reverse the trial court

only if its findings of fact are not supported by competent evidence

in the record or if its findings are premised on an error of law. We

will respect a trial court’s findings with regard to the credibility

____________________________________________

2 The first question presented is inartfully phrased. In his brief, Appellant does

not contest that he breached the Agreement. Rather, he argues that he cured

his breaches and, as a result, Weston should not have been permitted to

terminate the Agreement.

3 Because our resolution of Appellant’s first issue is dispositive, we need not

address his second issue pertaining to trial court’s grant of partial summary

judgment in favor of Weston on the issue on damages. The trial court found

against Appellant on his claim for breach of contract.

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and weight of the evidence unless the appellant can show that the

court’s determination was manifestly erroneous, arbitrary and

capricious or flagrantly contrary to the evidence.

J.J. DeLuca Company, Inc. v. Toll Naval Associates, 56 A.3d 402, 410

(Pa. Super. 2012) (quotation marks, formatting, and citations omitted).

Our standard of review of a trial court’s denial of a request for a

permanent injunction is well-settled: “[W]hen reviewing the grant or denial of

a final or permanent injunction, an appellate court’s review is limited to

determining whether the trial court committed an error of law.” Buffalo Twp.

v. Jones, 813 A.2d 659, 663–64 (Pa. 2002).

Ultimately, the grant or denial of a permanent injunction will turn

on whether the trial court properly found that the party seeking

the injunction established a clear right to relief as a matter of law.

Accordingly, we think it proper that appellate review in these

cases is whether the lower court committed an error of law in

granting or denying the permanent injunction. Our standard of

review for a question of law is de novo. Our scope of review is

plenary.

Id. at 664 n.4 (citations omitted).

It is settled that because contract interpretation is a question of law, our

review of the trial court’s decision is de novo and our scope of review plenary.

Bair v. Manor Care of Elizabethtown, PA, LLC, 108 A.3d 94, 96 (Pa. Super.

2015), appeal denied, 125 A.3d 775 (Pa. 2015).

The fundamental rule in interpreting the meaning of a contract is

to ascertain and give effect to the intent of the contracting parties.

The intent of the parties to a written agreement is to be regarded

as being embodied in the writing itself. The whole instrument

must be taken together in arriving at contractual intent. Courts

do not assume that a contract’s language was chosen carelessly,

nor do they assume that the parties were ignorant of the meaning

of the language they employed. When a writing is clear and

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unequivocal, its meaning must be determined by its contents

alone.

Only where a contract’s language is ambiguous may extrinsic or

parol evidence be considered to determine the intent of the

parties. A contract contains an ambiguity if it is reasonably

susceptible of different constructions and capable of being

understood in more than one sense. This question, however, is

not resolved in a vacuum. Instead, contractual terms are

ambiguous if they are subject to more than one reasonable

interpretation when applied to a particular set of facts. In the

absence of an ambiguity, the plain meaning of the agreement will

be enforced. The meaning of an unambiguous written instrument

presents a question of law for resolution by the court.

Ramalingam v. Keller Williams Realty Group, Inc., 121 A.3d 1034, 1046

(Pa. Super. 2015) (citation and original emphasis omitted).

Instantly, the Agreement in pertinent part provides as follows:

ARTICLE 4

DISTRIBUTOR’S OBLIGATIONS

§4.1. RESULTS: In order to maximize its purchase from

[Weston], [Appellant] agrees to develop and maximize sales of

Products to Outlets within the Sales Area by maintaining an

adequate and fresh supply of Products in all Outlets; rotating

Products to promote their sale before they become stale or off

code; promptly removing all stale or off code Products;

cooperating with [Weston] or its affiliates in its marketing

programs, maintaining a computer assisted record-keeping

system compatible with the system maintained by [Weston] now

or in the future; and providing service on a basis consistent with

good industry practice to all Outlets in the Sales Area requesting

service.

....

ARTICLE 8

TERMINATION

....

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§8.3 CURABLE BREACH: In the event of breach by [Appellant]

other than under §8.2 [(non-curable breach)], [Weston] shall give

[Appellant] three (3) business days written notice within which

[Appellant] may cure the breach. If [Appellant] fails to cure such

breach within said three (3) day period, [Weston] may thereafter

terminate this Agreement and [Appellant] shall have no further

right to cure; provided, further, that the parties agree that

repeated violations constitute a chronic breach and threaten

significant harm to [Weston], its trademarks or commercial

reputation, and in such event [Weston] shall be entitled to

terminate this Agreement pursuant to §8.2 and [Appellant] shall

have no further right to cure.

The Agreement, 11/15/99, at 6, 13.

Based on the foregoing provisions, Appellant argues that the trial court

erred in concluding that he failed to cure his breaches of the Agreement. In

support, Appellant points out that Ricky Saxon, a Weston representative who

terminated Appellant, testified that Appellant had cured the breaches.

Appellant’s Brief at 8-9.4 We disagree.

Here, the trial court expressly found that Appellant’s repeated violations

of the Agreement constituted a chronic breach sufficient to permit Weston to

terminate the Agreement under Section 8.3. As the trial court explained:

[Appellant] failed to cure at least four different breaches. After

notice, [Appellant] admitted he did not deliver fresh baked

products to Target three days a week and Sam’s Club four days a

week. There also was no dispute that, after notice, [Appellant]

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4 To the extent Appellant attempts to undermine Mr. Saxon’s trial testimony

using Mr. Saxon’s preliminary injunction testimony, such issue is waived

because Appellant failed to do so in the trial court in the first instance. See

Pa.R.A.P. 302(a) (“Issues not raised in the lower court are waived and cannot

be raised for the first time on appeal.”). Appellant also may not rely on the

preliminary injunction transcript because it is not part of the certified record.

See Commonwealth v. Kennedy, 868 A.2d 582, 593 (Pa. Super. 2005)

(noting that “this Court may not consider anything that is not part of the

certified record[.]”).

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was unable to get Walmart to replace either Weston’s 4-sided

sales display in the front of the store or its shelf in the deli section.

Under the [Agreement], each of these uncured breaches was a

sufficient reason for termination. These four breaches, plus

additional breaches involving a Giant Eagle and a Shop N Save

that may have been cured, also are repeat violations under the

[Agreement] sufficient for termination. Therefore, there was

sufficient evidence for [the trial court’s] ruling in favor of Weston,

and the ruling was not against the weight of the evidence.

Trial Court Opinion, 5/14/18, at 4 (record citations omitted). As stated,

Appellant himself admitted at trial that he did not cure the breaches. See

N.T. Trial, 11/1-2/17, at 85 (admitting that after receiving notice to cure, he

failed to service Sam’s Club four days per week and Target three days per

week); Id. at 143-144 (admitting that he lost the 4-sided display because of

his failure to keep it adequately stocked); Id. at 157-160 (admitting that he

lost the shelf space in the Walmart deli because of his failure to keep it

adequately stocked).

Insofar as Mr. Saxon’s trial testimony, Appellant essentially is inviting

us to substitute our judgment for that of the trial court by accepting

Appellant’s proffered version of the facts. We decline the invitation. As noted

earlier, in a nonjury trial, the trial court sitting as the finder of fact is free to

believe all, part, or none of the evidence, and this Court will not disturb the

trial court’s credibility determinations. Voracek v. Crown Castle USA Inc.,

907 A.2d 1105, 1108 (Pa. Super. 2006), appeal denied, 919 A.2d 958 (Pa.

2007). “The trial court’s findings are especially binding on appeal, where they

are based upon the credibility of the witnesses, unless it appears that the court

abused its discretion or that the court’s findings lack evidentiary support or

that the court capriciously disbelieved the evidence.” Shaffer v. O'Toole,

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964 A.2d 420, 422–423 (Pa. Super. 2009), appeal denied, 981 A.2d 220 (Pa.

2009).

Here, the trial court rejected Appellant’s interpretation of Mr. Saxon’s

trial testimony and declined to find that Appellant had cured the breaches.

[The trial court] interpret[s] the testimony to mean Mr. Saxon

thought the breaches were cured but learned later they were not

cured. . . . . [The trial court] found Mr. Saxon credible when he

indicated he first thought the breaches were cured but later found

out he was mistaken as they were “not cured.” Because Mr. Saxon

credibly testified at the trial the breaches of the [Agreement] were

not cured, [the trial court] correctly determined [Appellant]

breached the [A]greement.

Trial Court Opinion, 5/14/18, at 6-7.

In sum, viewing the evidence in a light most favorable to Weston as the

verdict winner and given Appellant’s own admission and Mr. Saxon’s testimony

that Appellant failed to cure at least four breaches after receiving notice of the

same, we cannot conclude that the trial court erred in entering judgment in

Weston’s favor. Because Appellant repeatedly breached the Agreement and

failed to cure his breaches, Weston was entitled to terminate the Agreement.

The trial court, therefore, did not err in denying Appellant’s claim for a

permanent injunction. Appellant failed to establish a clear right to relief as a

matter of law.

Judgment affirmed.

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Judgment Entered.

Joseph D. Seletyn, Esq.

Prothonotary

Date: 1/7/2019

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