J-S24002-16

NON-PRECEDENTIAL DECISION - SEE SUPERIOR COURT I.O.P. 65.37

CADLEROCK JOINT VENTURE II, L.P.,         :      IN THE SUPERIOR COURT OF
                                          :            PENNSYLVANIA
                  Appellant               :
                                          :
            v.                            :
                                          :
ERIC M. GATESMAN                          :          No. 1488 MDA 2015

                 Appeal from the Order entered July 31, 2015
              in the Court of Common Pleas of Dauphin County,
                    Civil Division, No(s): 2013 CV 5127 DJ

BEFORE: GANTMAN, P.J., BOWES and MUSMANNO, JJ.

MEMORANDUM BY MUSMANNO, J.:                           FILED JULY 08, 2016

      Cadlerock Joint Venture II, L.P. (“Cadlerock”), appeals from the Order

granting the Motion for Sanctions filed by Eric M. Gatesman (“Gatesman”),

and directing Cadlerock to pay Gatesman $2,500 for attorney’s fees.        We

affirm.

      The trial court set forth the relevant factual and procedural history

underlying this appeal as follows:

             On August 26, 2000, [Gatesman] co-signed a $6,000
      Education Loan Application and Promissory Note (hereinafter
      “Loan and Note”) for the benefit of Amy N. Frehn (hereinafter “[]
      Frehn”). [Gatesman was not the recipient of any money from
      the $6,000 loan (hereinafter “the Loan”).] At the time of the
      signing, [Gatesman] and [] Frehn were involved in a romantic
      relationship[, while Frehn was enrolled at Penn State University].
      Thereafter, [Gatesman] and [] Frehn ended their relationship
      and went their respective ways.

            On April 12, 2013 – approximately twelve and a half []
      years later – [Cadlerock] filed a Civil Complaint [against Frehn]
      with [a] Magisterial District Ju[dge] in Huntingdon County,
      Pennsylvania, alleging that [Cadlerock is] the owner[] of the
J-S24002-16

     Loan and Note,[1] that the Loan and Note are in default,[2] and
     attempting to collect the unpaid balance from [] Frehn.
     Judgment was found in favor of [Cadlerock], and [] Frehn was
     ordered to pay $5,391.36[, the full amount due on the Loan].
     [Frehn] appealed that decision to the Court of Common Pleas of
     Huntingdon County. Prior to any action on the [de novo] appeal,
     [Cadlerock] and [] Frehn reached an agreement wherein []
     Frehn would pay $2,710.00 to [Cadlerock] as [a] full accord and
     satisfaction of [her obligation under] the Loan and Note. A
     release [“the Release”] was drafted to that effect and signed by
     … [] Frehn on July 22, 2013.

           On April 15, 2013[, Cadlerock] filed a Civil Complaint
     [against Gatesman] with [a] Magisterial District Ju[dge] in
     Dauphin County, Pennsylvania, alleging that [Cadlerock is] the
     owner[] of the Loan and Note, that the Loan and Note are in
     default, and attempting to collect the unpaid amount from
     [Gatesman.3] Judgment was found in favor of [Gatesman] on
     May 27, 2013. On June 12, 2013, [Cadlerock] appealed the
     judgment to the Court of Common Pleas of Dauphin County.

                               ***

           [Cadlerock] filed a Civil Complaint against [Gatesman, in
     the Dauphin County Court of Common Pleas,] on June 26, 2013.
     [Gatesman] filed timely [P]reliminary [O]bjections. Before a
     decision was made on the [P]reliminary [O]bjections,
     [Cadlerock] filed an Amended Complaint on August 28, 2013.
     [Gatesman] again filed timely [P]reliminary [O]bjections, which
     were subsequently withdrawn. [Gatesman] filed an Answer and
     New Matter to the Amended Complaint on October 22, 2013.
     [Cadlerock] filed an Answer to New Matter on November 4,
     2013. The matter was submitted to [compulsory a]rbitration on
     January 8, 2014.

1
  The Loan and Note contains a choice of law provision stating that it is
governed by South Dakota law. The bank that originally issued the Loan,
Cadlerock’s predecessor-in-interest, was based in South Dakota.
2
  Frehn had made only one monthly installment payment on the Loan, of
$400, in May 2002. Thereafter, neither she nor Gatesman made any further
payments.
3
  Cadlerock’s Complaint sought from Gatesman the full amount due on the
Loan.

                               -2-
J-S24002-16


              On February 20, 2014, an [a]rbitration [h]earing was held
        in the above-captioned matter. The Arbitration Panel found in
        favor of [Gatesman, and entered an award (hereinafter “the
        Arbitration Award”).4] On May 7, 2014, [prior to the entry of
        judgment, Gatesman] filed a Motion for Sanctions pursuant to
        Pennsylvania Rule of Civil Procedure 1023.1.[5]

4
    Neither party appealed the Arbitration Award.
5
    Rule 1023.1 provides, in pertinent part, as follows:

      (c) The signature of an attorney or pro se party constitutes a
      certificate that the signatory has read the pleading, motion, or
      other paper. By signing, filing, submitting, or later advocating such
      a document, the attorney or pro se party certifies that, to the best
      of that person’s knowledge, information and belief, formed after an
      inquiry reasonable under the circumstances,

          (1) it is not being presented for any improper purpose, such
          as to harass or to cause unnecessary delay or needless
          increase in the cost of litigation,

          (2) the claims, defenses, and other legal contentions therein
          are warranted by existing law or by a nonfrivolous argument
          for the extension, modification or reversal of existing law or
          the establishment of new law,

          (3) the factual allegations have evidentiary support or, if
          specifically so identified, are likely to have evidentiary support
          after a reasonable opportunity for further investigation or
          discovery; and

          (4) the denials of factual allegations are warranted on the
          evidence or, if specifically so identified, are reasonably based
          on a lack of information or belief.

      (d) If, after notice and a reasonable opportunity to respond, the
      court determines that subdivision (c) has been violated, the court
      may, subject to the conditions stated in Rules 1023.2 through
      1023.4, impose an appropriate sanction upon any attorneys, law
      firms and parties that have violated subdivision (c) or are
      responsible for the violation.

Pa.R.C.P. 1023.1(c), (d).

                                     -3-
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              Prior to filing the Motion for Sanctions, [Gatesman’s
      counsel] sent [Cadlerock’s counsel] a [letter asserting] that the
      Complaint was barred by the statute of limitations[6] and should
      be withdrawn within twenty-eight [] days[,] or a motion for
      sanctions would be filed upon resolution of the claim[, pursuant
      to Rule 1023.1].        Since [Cadlerock] did not appeal the
      Arbitration Award, the matter was resolved when the time for
      appeal of the [A]rbitration [A]ward expired.

            After a number of continuances, a hearing on
      [Gatesman’s] Motion for Sanctions was held on April 24, 2015
      [(hereinafter “the Sanctions Hearing”).7] At the conclusion of
      the [Sanctions H]earing, the [trial c]ourt took the matter under
      advisement, and allowed both parties to submit proposed
      findings of fact and conclusions of law …. On July 3[1], 2015,
      th[e trial c]ourt entered an Order awarding [Gatesman] $2,500
      in counsel fees.[8] On August 31, 2015, [Cadlerock] filed a
      Notice of Appeal. On September 3, 2015, [Cadlerock] was
      directed to file a [Pa.R.A.P. 1925(b)] Concise Statement of
      Matters Complained of on Appeal.

Trial Court Opinion, 10/12/15, at 1-3 (footnotes added).            Cadlerock

thereafter timely filed a Concise Statement.

      Cadlerock now presents the following questions for our review:

      A. Whether the [trial] court erred when it exercised
         jurisdiction over [Gatesman’s] Motion for [S]anctions on
         the basis that [Cadlerock] did not file a praecipe to have
         the [Arbitration A]ward [] entered on the judgment
         index, when the Motion was not filed until seventy-six

6
  Though the issue of the statute of limitations was contested in the
underlying litigation, and Gatesman again raises this issue in his appellate
brief, for the purpose of the instant appeal, we decline to address the issue.
7
   Cadlerock’s sole witness at the Sanctions Hearing was Nina Evans
(“Evans”), a representative of Cadlerock. Relevant to this appeal, Evans
testified concerning the Release and its preparation.
8
  In the Motion for Sanctions, Gatesman asserted that he had incurred
attorney’s fees and costs in excess of $6,000. Motion for Sanctions, 5/7/14,
at ¶ 17.

                                 -4-
J-S24002-16

          days after the Prothonotary notified the parties that the
          [Arbitration A]ward [] was entered on the docket[,] and
          no appeal from the [A]ward was taken[?]

       B. Whether the [trial] court erred in granting [Gatesman’s]
          Motion for [S]anctions on the basis of an accord and
          satisfaction with one co-signer of [the Loan and N]ote,
          when an accord and satisfaction of the [Loan and N]ote
          was not the agreement reached by those parties[?]

       C. Whether    the   [trial]  court   erred  [in]  granting
          [Gatesman’s] Motion for [S]anctions on the basis of an
          accord and satisfaction when the [Loan and N]ote was
          governed by South Dakota law, which permits a
          settlement with one co-signer for some of [the] monies
          due under a judgment on the [Loan and N]ote[,] while
          pursuing the remainder of monies due under the [Loan
          and N]ote against the other co-signer[?]

Brief for Appellant at 3 (capitalization omitted).

      We review a trial court’s ruling on a motion for sanctions for an abuse

of discretion. See Dean v. Dean, 98 A.3d 637, 644 (Pa. Super. 2014). A

trial court has “significant discretion” in determining whether to impose

sanctions. Pa.R.C.P. 1023.1 cmt. (2003).

      Cadlerock first argues that the trial court lacked jurisdiction to rule on

the Motion for Sanctions, and did not retain jurisdiction by means of

Gatesman’s failure to file a praecipe to enter judgment on the Arbitration

Award.   See Brief for Appellant at 18-23.           Cadlerock contends that the

Arbitration Award, entered on the docket following compulsory arbitration,

served as a final, appealable judgment.      Id. at 19 (citing Stivers Temp.

Pers. v. Brown, 789 A.2d 292, 294 (Pa. Super. 2001) (stating that “[u]pon

entry of the compulsory arbitration award on the docket and appropriate


                                   -5-
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notice, the award [takes] the force and effect of a final judgment[,]” and an

“[a]ppellant’s only recourse to challenge [a] compulsory arbitration award

[is] to file for a trial de novo with the Court of Common Pleas within 30

days.”)). Cadlerock points out that Gatesman filed the Motion for Sanctions

76 days after the Arbitration Award, and neither party filed an appeal

therefrom.9   Brief for Appellant at 20.    Thus, Cadlerock asserts, the trial

court was divested of jurisdiction 30 days after the entry of the Arbitration

Award; any ruling on the Motion for Sanctions is therefore void. See id. at

21-22 (relying upon Freidenbloom v. Weyant, 814 A.2d 1253, 1255 (Pa.

Super. 2003) (stating that absent an appeal, a trial court’s jurisdiction

generally extends for only thirty days after the entry of a final order)).

      In its Opinion, the trial court addressed Cadlerock’s claim and aptly

summarized the applicable law as follows:

             A party seeking sanctions pursuant to Rule 1023.1 must
      first provide written notice [of] a demand for withdrawal or
      correction of the paper promptly after the appropriate paper is
      provided. Pa.R.C.P. 1023.1 cmt. (2003). If the paper is not
      withdrawn or corrected within twenty-eight [] days, the
      aggrieved party may file a separate motion describing the
      specific conduct alleged to violate Rule 1023.1(c). Pa.R.C.P.
      1023.2(a). That motion must be filed in the trial court at least
      twenty-eight [] days after notice is provided, and prior to entry
      of final judgment. Pa.R.C.P. 1023.2(c). … [A] Court may
      defer its ruling on the motion until final resolution of the case.
      [Pa.R.C.P. 1023.1 cmt. (2003).]



9
  Cadlerock asserted that it made a “business decision” to forego an appeal
of the Arbitration Award, though Cadlerock still believed that its action was
meritorious. Proposed Findings of Fact and Conclusions of Law, 5/18/15, at
¶¶ 20-21.

                                   -6-
J-S24002-16

             In Dauphin County, all civil actions in which the amount in
      controversy is $50,000 or less must be submitted and heard by
      a Board of Arbitration. Dauphin County Local Rule No. 1301(1).
      Following a hearing, the Board will enter an award on the
      docket. Pa.R.C.P. 1306. Once an award is docketed, either
      party has thirty [] days to file a de novo appeal with the Court of
      Common Pleas. If no appeal is taken, either party may then file
      a praecipe with the Prothonotary to enter judgment on the
      award. Pa.R.C.P. 1307(c) [(providing that “[i]f no appeal is
      taken within thirty days after the entry of the award on the
      docket, the prothonotary on praecipe shall enter judgment on
      the award.” (emphasis added)); see also Pa.R.C.P. 1307(c)
      note (providing that Pa.R.C.P. 3021(a)(3) requires the
      prothonotary to immediately enter in the judgment index a
      judgment entered on praecipe of a party.”) (emphasis added)].
      Accordingly, an[] [a]rbitration [a]ward alone is not an “entry of
      final judgment” for purposes of Rule 1023[.1; rather,] a party
      must praecipe to have the [a]ward entered as a final judgment
      on the docket. In the instant case, the Arbitration Award was
      never reduced to an entry of judgment on the docket.

Trial Court Opinion, 10/12/15, at 5-6 (emphasis added; original footnote

citations moved to body).

      Cadlerock contends that it is immaterial that the Arbitration Award was

never reduced to judgment on the docket, because the Order docketing the

Arbitration   Award   itself   served   as   a   final   judgement,   and,   under

Freidenbloom, supra, the trial court was divested of jurisdiction thirty days

after the entry of the Arbitration Award.        We disagree and determine that

Freidenbloom is unavailing.

      The plaintiff in Freidenbloom filed a praecipe to discontinue the

action, and 36 days later, the defendant filed a motion for attorney’s fees

under 42 Pa.C.S.A. § 2503(9) (concerning litigation that is arbitrary,

vexatious or in bad faith).    Freidenbloom, 814 A.2d at 1254. This Court



                                   -7-
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held that the defendant’s motion was untimely, and the trial court’s award of

attorney’s fees was therefore improper, citing 42 Pa.C.S.A. § 5505 for the

proposition that a trial court retains jurisdiction to rule on a motion for

attorney’s fees that is filed within 30 days after final resolution of a case.

Freidenbloom, 814 A.2d at 1255-56. The Court explained that

      [a] trial court’s jurisdiction generally extends for thirty days after
      the entry of a final order:

          Except as otherwise provided or prescribed by law, a
          court upon notice to the parties may modify or rescind
          any    order   within   30   days   after  its  entry,
          notwithstanding the prior termination of any term of
          court, if no appeal from such order has been taken or
          allowed.

      42 Pa.C.S. § 5505. After the 30[-]day time period, the trial
      court is divested of jurisdiction. A praecipe to discontinue a case
      constitutes a final resolution of all issues. Further, a praecipe for
      discontinuance has the same effect as a judgment entered in
      favor of the defendant.            Thus, since a praecipe for
      discontinuance constitutes a final resolution of the case and has
      the effect of a final judgment, a trial court may consider a
      petition for fees filed within a period of 30 days after the filing of
      the praecipe.

Freidenbloom, 814 A.2d at 1255.            However, our Supreme Court has

explained that “Freidenbloom stands for the proposition that a praecipe to

discontinue constitutes a final judgment, and that a trial court may only act

on a motion for fees that is filed within 30 days from final judgment.         …

Freidenbloom does not address whether the entry of judgment is

dispositive of a motion for fees filed prior to judgment.” Miller Elec. Co. v.

DeWeese, 907 A.2d 1051 1055 (Pa. 2006) (finding Freidenbloom




                                   -8-
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inapposite where the motion for attorney’s fees was filed prior to the entry

of judgment).

       Similarly, in the instant case, final judgment was not entered prior to

Gatesman’s filing of the Motion for Sanctions.10       The trial court properly

determined that under Pa.R.C.P. 1307(c), the Order entering the Arbitration

Award on the docket did not, itself, constitute entry of final judgment for

purposes of Rule 1023.1.         See Trial Court Opinion, 10/12/15, at 6.

Moreover, we are persuaded by Gatesman’s argument that he “purposely did

not file a [p]raecipe to enter judgment on the [Arbitration A]ward …, for the

very purpose of complying with Rule 1023.2.         Judgment was left open in

order for the [trial c]ourt to retain jurisdiction.” Brief for Appellee at 23; see

also Pa.R.C.P. 1023.2(c).      Accordingly, Cadlerock’s first issue does not

entitle it to relief.

       Next, Cadlerock contends that the trial court erred in granting the

Motion for Sanctions, finding that Cadlerock had violated Rule 1023.1(c)(2)

by continuing to pursue its claim against Gatesman after the satisfaction of

the Loan by means of the Release executed by Frehn. Brief for Appellant at

23.    According to Cadlerock, contrary to the trial court’s ruling, Frehn’s

settlement payment of $2,710.00 (hereinafter “the settlement payment”),

made in connection with the Release, did not constitute an accord and

10
   Additionally, while Freidenbloom concerned a motion for attorney’s fees
under 42 Pa.C.S.A. § 2503, the instant case involves a motion for sanctions
under Pa.R.C.P. 1023.1, and its companion rule, Pa.R.C.P. 1023.2(c), which
expressly provides that a Rule 1023.1 motion for sanctions must be filed
prior to the entry of final judgment.

                                   -9-
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satisfaction of the Loan, and Cadlerock was within its rights to pursue

Gatesman for the remaining amount due on the Loan. Id. at 23-24.

      The Release concerns Frehn’s obligation for the judgment entered

against her in magisterial court, $5,391.36, i.e., the full amount due on the

Loan, and sets forth the amount of the settlement payment. See Motion for

Sanctions, Exhibit B (the Release), 5/7/14. The Release (which is atypical

for reasons we explain below) provides, in relevant part, as follows:

      As consideration [], [Frehn] agree(s) to execute this Release in
      favor of [Cadlerock] and its affiliates [], as third party
      beneficiaries. [Frehn] … hereby releases, acquits and forever
      discharges [Cadlerock], their agents, servants and employees,
      and all persons and entities in privity with them or any of them,
      from any and all claims or causes of action of any kind
      whatsoever, … which [Frehn] and those on whose behalf [Frehn]
      sign(s) has … related to the above described Note(s) and/or
      Judgment(s), this Release being intended and understood to
      release all present and future claims of any kind which [Frehn]
      and those on whose behalf [Frehn] sign(s) might have against
      those hereby released ….

Id.

      In its Opinion, the trial court explained its reasons for finding an

accord and satisfaction by means of the Release as follows:

            The purpose of a co-signer is to protect the lender if the
      borrower defaults and is unable to make any payments. The
      lender can then pursue the co-signer for payments. Typically,
      once a loan has been satisfied, by whatever means, then the
      lender can no longer pursue the borrower or co-signer. This
      gives co-signers assurance that once a loan has been satisfied,
      discharged, or paid in full, the co-signer no longer has any
      obligation to pay on the loan. The instant matter is an atypical
      factual scenario – the lender released the borrower from any
      future obligations in satisfaction of the [L]oan, and then
      continued to pursue the co-signer for the difference.



                                 - 10 -
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            Allowing a lender to pursue a co-signer for payment after
     the loan has been satisfied goes against public policy, and would
     cause significant issues for lenders.      People would be less
     inclined than they already are to co-sign a loan for a friend or
     family member. If a borrower cannot be approved for a loan
     without a co-signer, and no one wants to co-sign for fear of
     having to make payments after satisfaction of the loan, then
     lenders will be left with two options: (1) approve the loan with
     no guarantee of repayment; or (2) reject the borrower’s
     application. It is highly unlikely that a lender would approve a
     loan with no guarantee of repayment, and would most likely
     reject the application. This would have a detrimental effect upon
     the market.

            In the instant matter, [Cadlerock] filed suit [against
     Gatesman] in the magisterial district court on April 15, 2013. On
     May 27, 2013, Magisterial District Judge Michael J. Smith found
     in favor of [Gatesman]. [Cadlerock] appealed to the Common
     Pleas Court on June 12, 2013. [] Frehn satisfied the [L]oan and
     signed [the R]elease on July 22, 2013. At this point, [Cadlerock]
     was aware or should have been aware that the [L]oan had been
     satisfied, thus it could no longer pursue payment from the co-
     signor ([Gatesman]). Despite the satisfaction of the [L]oan,
     [Cadlerock] pursued litigation against [Gatesman].

           In addition, [] Evans[’s] testimony [at the Sanctions
     Hearing] regarding the circumstances surrounding the [R]elease
     … was quite compelling. The following dialogue occurred on the
     record:

          Q [Gatesman’s counsel]: Let me rephrase the question.
          Was it the intention of [Cadlerock], in preparing the
          [R]elease, to release [] Frehn from any further liability
          on account of the [N]ote that Cadlerock would sue her
          and obtained a full amount of the judgment for?

          A [Frehn]: We agreed – yes, we agreed to satisfy her
          judgment upon receipt of those funds.

     (N.T. Sanctions Hearing[,] 4/24/15[,] at p. 21) [(emphasis
     added)].[11]  [Cadlerock] argued that the language of the

11
  We observe that Evans went on to state on redirect that, in preparing the
Release, Cadlerock did not intend to release Gatesman from his obligation
under the Loan and Note. N.T., 4/24/15, at 21.

                                - 11 -
J-S24002-16

      [R]elease … did not release [] Frehn from any claims that she
      could make against Cadlerock. Rather, the language releases
      Cadlerock from any claims that [] Frehn could make against it.
      The [trial c]ourt found the language in the [R]elease to go
      against public policy and common sense.

             Typically, when a lender and borrower reach an agreement
      wherein the borrower agrees to pay a certain amount of money
      in exchange for full satisfaction of the loan in question, it is
      referred to as accord and satisfaction. [] Evans’[s] testimony at
      the Sanctions Hearing confirmed the intention of [Cadlerock] to
      satisfy the [L]oan in exchange for [the settlement] payment by
      [] Frehn.     However, the language of the [R]elease is not
      consistent with the intention of [Cadlerock]. Accordingly, the
      [trial c]ourt found that accord and satisfaction of the [L]oan …
      occurred on July 22, 2013, the date when [] Frehn signed the
      [R]elease.

             The [trial c]ourt does not find that [Cadlerock’s] initial
      filing of suit [against Gatesman] in magisterial district court, nor
      the appeal to the Common Pleas Court[,] was frivolous because
      the [L]oan had not been satisfied. However, once the [L]oan
      was satisfied, [Cadlerock] should have withdrawn the appeal in
      Common Pleas Court.         Thus, the [trial c]ourt finds [] the
      continuing pursuit of the lawsuit against [Gatesman] after the
      [L]oan had been satisfied to be frivolous. Moreover, [Cadlerock]
      pursued the claim after receiving notice from [Gatesman] of [his
      intent] to seek sanctions. Accordingly, [the court] imposed
      sanctions in the amount of $2,500 on [Cadlerock] to deter []
      frivolous actions in the future.

Trial Court Opinion, 10/12/15, at 13-15 (footnote added).

      Cadlerock argues that the trial court erred by overlooking the language

of the Release in finding an accord and satisfaction of the Loan, stating that

      [o]n its face, the [] Release is a complete contract. The object
      of the parties’ agreement – the Huntingdon County litigation and
      judgment [against Frehn] – is clearly stated.        The Release
      speaks in terms of that litigation and judgment, not the [Loan
      and] Note. The extent of the agreement is also clearly stated.
      Frehn releases Cadlerock and those in privity with Cadlerock,
      and pays $2,710.00 in exchange for Cadlerock foregoing its right
      to pursue the judgment.

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J-S24002-16


Brief for Appellant at 24.

      Though    we   acknowledge   that   the   language   of   Release,   quite

perplexingly, released Cadlerock from further liability by Frehn’s settlement

payment on her loan obligation, we determine that the trial court did not err

by looking beyond the “atypical” language of the Release to ascertain the

intent of the contracting parties.12 As mentioned above, Evans, Cadlerock’s

representative, made clear at the Sanctions Hearing that Cadlerock, in

preparing the Release, intended to release Frehn, the primary obligor, from

any further liability by her making the settlement payment. Moreover, we

agree with the trial court that it would be unconscionable, and against public

policy, to permit a lender to pursue a co-signer for payment after a loan has

been satisfied by the primary obligor.     The language of the inelegantly




12
   Cadlerock concedes that the Release does not include an integration
clause. Brief for Appellant at 25.


                                 - 13 -
J-S24002-16

drafted Release lends itself to an absurd and unconscionable result.13

Accordingly, we discern no error of law or abuse of discretion by the trial

court in imposing reasonable sanctions14 upon Cadlerock under Rule 1023.1

for pursuing its action against Gatesman despite an accord and satisfaction

of the Loan.

        Finally, Cadlerock argues that the trial court “erred [by] granting [the]

Motion for Sanctions on the basis of an accord and satisfaction, as the [Loan

and] Note is governed by South Dakota law[.]”         Brief for Appellant at 27

(capitalization omitted).    Cadlerock avers that under South Dakota law,

Gatesman was jointly and severally liable under the Loan and Note as an

“accommodation party,” even though he did not receive any consideration


13
     In this regard, we are persuaded by the following argument by Gatesman:

      [B]ased on the face of the [] [R]elease, had Gatesman lost [against
      Cadlerock’s action], and a judgment for the full amount of the claim
      against him was entered[, i.e., the full amount due on the Loan],
      [Gatesman] could have then asserted a claim against [] Frehn[,] as
      the primary obligor[,] for contribution.       [Frehn] would have
      naturally looked to [Cadlerock] based on their accord and
      satisfaction, [but Cadlerock] could have pointed to the [R]elease[,]
      claiming [that Frehn] had released [Cadlerock] from any further
      claim, thereby nullifying the accord and satisfaction. Or, with
      slightly different assumptions, there is nothing that [would] stop[]
      [Cadlerock] from suing Frehn again for the balance [remaining on
      the Loan after the settlement payment], since [Cadlerock had] not
      provided a full release to her.

Brief for Appellee at 28 n.14 (some capitalization omitted).
14
    We observe that the $2,500 sanction that the trial court imposed
constituted less than half of the $6,000 in attorney’s fees that Gatesman
claimed in the Motion for Sanctions. Moreover, Gatesman has incurred
additional attorney’s fees in defending against the instant appeal.

                                   - 14 -
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for signing the Loan and Note. Id. at 27-28 (citing S.D.C.L. § 57A-3-419(b)

(governing instruments signed for accommodation)).

       Regardless of whether Pennsylvania or South Dakota law applies,

Gatesman was clearly jointly and severally liable under the Loan and Note as

a co-signer.    Essentially, Cadlerock raises the same challenge as set forth

above in its second issue, but under the guise of South Dakota law.        We

reach the same conclusion as discussed above, regardless of which

jurisdiction’s law applies. Gatesman’s liability was extinguished following the

accord and satisfaction. Accordingly, Cadlerock’s final issue does not entitle

it to relief.

       As we discern no abuse of discretion or error of law by the trial court,

nor any merit to Cadlerock’s claims on appeal, we affirm the Order granting

Gatesman’s Motion for Sanctions.

       Order affirmed.

Judgment Entered.




Joseph D. Seletyn, Esq.
Prothonotary

Date: 7/8/2016




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