J-S53019-17


NON-PRECEDENTIAL DECISION - SEE SUPERIOR COURT I.O.P. 65.37

HOWARD LINDSEY, R.C.                              IN THE SUPERIOR COURT OF
WESTMORELAND, HOME INCOME                               PENNSYLVANIA
EQUITY, LLC AND STRATEGIC PROPERTY
TRUST
                    Appellee

                    v.

RONALD KNABB, THE KNABB
PARTNERSHIP AND E.J. MESSERSMITH

                         Appellants                     No. 288 EDA 2017


             Appeal from the Order Entered December 28, 2016
             In the Court of Common Pleas of Delaware County
                       Civil Division at No(s): 16-981


BEFORE: BENDER, P.J.E., OLSON, J., and FORD ELLIOTT, P.J.E.

MEMORANDUM BY OLSON, J.:                            FILED OCTOBER 12, 2017

      Appellants,   Ronald    Knabb,    the   Knabb     Partnership,   and   E.J.

Messersmith (hereinafter referred to collectively as “Appellants”), appeal

from the order entered on December 28, 2016, denying a motion for

sanctions pursuant to Pa.R.C.P. 1042.9(b) filed by Howard Lindsey, R.C.

Westmoreland, Home Income Equity, LLC, and Strategic Property Trust

(hereinafter referred to collectively as “Plaintiffs”). We affirm.

      The trial court set forth the facts of this case as follows:

      [Plaintiffs] filed a complaint containing twenty-eight (28) counts
      on February 6, 2016. Howard Lindsey was a plaintiff in his
      individual capacity, as a partner, president and treasurer of
      Home Income Equity, LLC, and as the manager with the
      controlling interest in Strategic Property Trust.             R.C.
      Westmoreland was a plaintiff in his capacity as the partner,
      secretary and general counsel of Home Income Equity, LLC.
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     Home Income Equity, LLC, a Delaware limited liability company,
     was also a plaintiff. Strategic Property Trust, LLC, another
     plaintiff, was the purported manager of Home Income Equity,
     LLC. Ronald Knabb was a defendant, as an individual, as a
     partner in Home Income Equity, LLC, as an architect licensed in
     the Commonwealth of Pennsylvania and [as] a partner of the
     Knabb Partnership.      Defendant Knabb Partnership was a
     partnership engaged in the business of architecture in Berwyn,
     Pennsylvania and Defendant E.J. Messersmith was a partner in
     the Knabb Partnership.      [The defendants in the underlying
     lawsuit are Appellants herein.]

     [Plaintiffs] claimed that [Appellants] were the owners of a
     proposed construction project known as the Brookhaven Active
     Adult Community, or Brookhaven Estates, to be built in
     Brookhaven, Delaware County, Pennsylvania. In eight separate
     counts, [Plaintiffs] pled an action of professional liability
     negligence against Ronald Knabb or the Knabb Partnership. In
     eight additional counts, [Plaintiffs] filed for relief for breach of
     fiduciary duty, self-dealing, and conflict of interest against
     Ronald Knabb or the Knabb Partnership. Eight additional counts
     containing allegations of fraud were pled by [Plaintiffs] against
     Ronald Knabb or the Knabb Partnership. The four remaining
     counts were against E.J. Messersmith, individually.

     [Plaintiffs] averred that, between 2007 and October 29, 2015,
     [Plaintiffs] and [Appellants] had a business relationship wherein
     [Appellants] were to render architectural services to [Plaintiffs].
     A contract identified as “AIA document B141-1997 part one,”
     dated September 26, 2008, was allegedly executed by Howard
     Plaintiffs and E.J. Messersmith as partner for architectural
     services for the project. [Plaintiffs] claimed that the signature of
     Howard Lindsey was forged and that the contract was invalid and
     unenforceable. [Plaintiffs] alleged that Knabb and the Knabb
     Partnership failed to exercise ordinary care, possessed by
     members of the architectural profession[,] by enumerated acts
     and omissions. [Plaintiffs] further alleged that Knabb and the
     Knabb Partnership deliberately, willfully and knowingly engaged
     in unethical business practices to the detriment of [Plaintiffs].
     Finally, [Plaintiffs] averred that [E.J.] Messersmith breached
     duties owed to the partnership for failing to be present when
     [Howard] Lindsey signed the AIA document, and/or by failing to
     verify that Lindsey signed the document, and/or for not refusing
     to sign the AIA document as a witness.

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     [The] complaint was served on [Appellants] on February 17,
     201[6].    [Plaintiffs] filed a petition for [a] preliminary and
     permanent injunction on March 2, 2016, seeking equitable relief
     to prevent [Appellants] from proceeding with common-law
     arbitration concerning the AIA contract before the American
     Arbitration Association. Counsel for [Appellants] entered his
     appearance on March 1, 2016, and filed a notice of intention to
     enter judgment of non pros for failure to file a certificate of merit
     pursuant to Pa.R.C.P. 1042.3. The notice provided that the
     professional liability counts, Counts 1, 5, 8, 12, 15, 19, 22, and
     26, of [Plaintiffs] complaint would be striken. [Appellants] filed
     a response to the petition for preliminary injunction on March 15,
     2016.

     [The trial] court scheduled a hearing on [Plaintiffs’] petition for
     [a] preliminary and permanent injunction on Thursday, March
     17, 2016. [Plaintiffs] filed a certificate of merit on April 4, 2016.
     A lengthy conference was held on that date by the [trial] court
     with counsel for the parties. The issue at hand was the validity
     of the arbitration clause contained in the AIA document. There
     was no discussion with the [trial] court about the certificate of
     merit or the professional negligence claims during the
     conference. As a result of the conference with the parties, the
     hearing was adjourned and the [trial] court conducted an
     in-camera inspection of the original AIA contracts for the parties
     on March 22, 2016. [The trial] court conducted a status and
     settlement conference with the parties on April 8, 2016. An
     order which stayed the American Arbitration Association
     proceeding pending a hearing was entered on April 11, 2016.
     Testimony was commenced on May 27, 2016. The subject
     matter of the hearing did not include consideration of the
     certificate of merit of the professional negligence claims. The
     subject matter was the validity and applicability of the
     arbitration clause contained in the AIA document.             At the
     conclusion of the proceedings, [the trial] court ordered
     [Plaintiffs] to provide full and complete and verified responses to
     [Appellants’] request for the production of documents, on or
     before June 13, 2016, and a final hearing date to conclude the
     proceeding was scheduled for June 20, 2016.

     On June 10, 2016, [Plaintiffs] filed a praecipe to discontinue the
     action without prejudice. On August 3, 2016, [Appellants] filed a
     motion for sanctions pursuant to Pa.R.C.P. 1042.9(b).

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       [Plaintiffs] responded on August 23, 2016. [Appellants], on
       September 9, 2016, filed a motion to strike and reply to
       [Plaintiffs’] response in opposition to [Appellants’] motion for
       sanctions. [The trial] court conducted argument on [Appellants’]
       motion for sanctions and motion to strike on November 21,
       2016. On November 28, 2016, [the trial] court entered an order
       which found that [Plaintiffs] failed to fully comply with Pa.R.C.P.
       1042.9, but declined to award sanctions.          [Appellants], on
       December 15, 2016, filed a motion for reconsideration of the
       [trial] court’s November 28, 2016 order. On December 22,
       2016, [the trial] court entered an order which: 1) granted
       [Appellants’] motion for reconsideration; 2) vacated its
       November 28, 2016 order; 3) granted [Appellants’] motion to
       strike exhibits P-1 through P-5 attached to [Plaintiffs’] response
       in opposition to [Appellants’] motion for sanctions; and 4) found
       that [Plaintiffs] failed to comply with Pa.R.C.P. § 1042.9.
       However, [the trial] court, again, declined to award sanctions
       pursuant to Pa.R.C.P. 1042.9(b).


Trial Court Opinion, 3/9/2017, at 2-6 (record citations and superfluous

capitalization omitted). This timely appeal resulted.1

       On appeal, Appellants present the following issues for our review:

       1. Did the trial court commit an error of law and/or abuse its
          discretion by refusing to award sanctions to Appellants
          despite finding that [Plaintiffs] violated the Pennsylvania
          Rules of Civil Procedure pertaining to certificates of merit
          (Pa.R.C.P. 1042.1, et seq.)?

       2. Did the trial court commit an error of law and/or abuse its
          discretion in failing to address whether [Plaintiffs’] counsel,
          Vito Canuso, Esq., violated Pa.R.C.P. 1023.1 on two occasions
          by signing and submitting to the court separate certificates of
____________________________________________


1 Appellants filed a notice of appeal on January 11, 2017. On January 18,
2017, the trial court issued an order directing Appellants to file a concise
statement of errors complained of on appeal pursuant to Pa.R.A.P. 1925(b).
Appellants complied timely. The trial court issued an opinion pursuant to
Pa.R.A.P. 1925(a) on March 13, 2017.



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         merit as to the Knabb Partnership and Ronald Knabb, wherein
         Canuso stated that he had obtained the requisite written
         statement from an appropriately licensed professional
         required pursuant to Pa.R.C.P. 1023.3, when, in fact, Canuso
         had not?

      3. Did the trial court commit an error of law and/or abuse its
         discretion in not awarding sanctions against Canuso where
         the record clearly indicates that Canuso violated Pa.R.C.P.
         1023.1 on two occasions by signing and submitting to the
         court separate certificates of merit as to the Knabb
         Partnership and Ronald Knabb, explicitly stating that he had
         obtained the requisite written statement from an
         appropriately licensed professional required pursuant to
         Pa.R.C.P. 1042.3, when, in fact, Canuso had not?

Appellants’ Brief at 5 (superfluous capitalization and suggested answers

omitted).

      All of Appellants’ issues are interrelated, so we will examine them

together. Appellants’ overarching argument is that the trial court abused its

discretion by denying sanctions for a violation of the certificate of merit

requirements in a professional liability cause of action.    Appellants argue

that professional malpractice cases require a certificate of merit stating that

an appropriate licensed professional or expert has supplied a written

statement that the defendant’s conduct fell outside acceptable professional

standards. Id. at 23. Appellants posit that our rules of civil procedure also

require the plaintiff to furnish the licensed professional’s written statement

within 30 days of a defendant’s request.     Id., citing Pa.R.C.P. 1042.9(a).

Here, however, Appellants claim that Plaintiffs “neglected to answer or

provide the written statement[s] despite [] two written requests by

Appellants.” Appellants’ Brief at 29. Citing various cases from trial courts


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across the Commonwealth, Appellants contend that the certificate of merit

requirements are strictly enforced and that significant sanctions have been

awarded for any violations.     Id. at 24.   According to Appellants, Plaintiffs

violated Pa.R.C.P. 1042.3(a)(1) on two occasions by misrepresenting that

they had obtained written statements from an appropriately licensed

professional to proceed with their professional negligence claims.         Id. at

26-27.   Accordingly, Appellants maintain that “the [trial c]ourt’s denial of

sanctions is particularly troubling in light of the fact that the in-court hearing

solidified the notion that the deception perpetuated by [Plaintiffs] was willful

and pervasive throughout the entirety of the litigation, and that there were

no mitigating circumstances present to deny such award.”              Id. at 30.

Appellants aver that the trial court’s decision to deny sanctions “essentially

eviscerate[d]” Rule 1042.3, and that “the instant matter is a situation where

to protect the integrity of the Rules[,] the discretionary language regarding

sanctions (i.e. “may award”) must be interpreted as mandatory and not

permissive.” Id. at 31-32.

      To substantiate their claims, Appellants opine that the trial court

misapplied a five-factor test for determining whether to award sanctions.

Id. at 34-37. More specifically, Appellants claim that the trial court failed to

consider the nature, severity, and number of violations, the reason for non-

compliance, whether the violation was willful, the ability to cure the

violation, and the prejudice to Appellants. Id. Finally, Appellants contend




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that counsel for Plaintiffs materially misrepresented that he had obtained the

required certificates of merit in violation of Pa.R.C.P. 1023.1. Id. at 37-39.

      “The decision to sanction a party is a matter vested in the sound

discretion of the trial court.” First Lehigh Bank v. Haviland Grille, Inc.,

704 A.2d 135, 139 (Pa. Super. 1997) (citation omitted). “Where sanctions

have been denied, we review the evidence to determine whether the court

abused its discretion.” Id. We have previously determined:

      An abuse of discretion is not merely an error of judgment, but if
      in reaching a conclusion the law is overridden or misapplied, or
      the judgment exercised is manifestly unreasonable, or the
      judgment is the result of partiality, prejudice, bias or ill-will, as
      shown by the evidence of record, discretion is abused. We
      emphasize that an abuse of discretion may not be found merely
      because the appellate court might have reached a different
      conclusion,    but    requires     a    showing     of     manifest
      unreasonableness, or partiality, prejudice, bias, or ill-will, or
      such lack of support as to be clearly erroneous.

Eichman v. McKeon, 824 A.2d 305, 312 (Pa. Super. 2003) (citation

omitted).     “Additionally, where credibility and the weight to be accorded

the evidence are at issue, we will not substitute our judgment for that of the

fact-finder.” Id.

      In pertinent part, Pennsylvania Rule of Civil Procedure 1042.3(a)

requires the attorney for a plaintiff in any action alleging professional liability

to file a certificate of merit that specifies:

      an appropriate licensed professional has supplied a written
      statement that there exists a reasonable probability that the
      care, skill or knowledge exercised or exhibited in the treatment,
      practice or work that is the subject of the complaint, fell outside



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     acceptable professional standards and that such conduct was a
     cause in bringing about the harm[.]

Pa.R.C.P. 1042(a)(1).

     Sanctions are governed by Pa.R.C.P. 1042.9, which provides:

     (a) If a plaintiff has filed a certificate of merit as to a particular
     defendant and that defendant is dismissed from the case
     through voluntary dismissal, verdict or order of court, the
     plaintiff, within thirty days of the written request of that
     defendant, shall provide him or her with the written statement
     obtained from the licensed professional upon which the
     certificate of merit as to that defendant was based. If a plaintiff's
     claims against other licensed professionals are still pending, the
     written statement shall be produced within thirty days of
     resolution of all claims against the other licensed professionals.

     (b) A court may impose appropriate sanctions, including
     sanctions provided for in Rule 1023.4, if the court determines
     that an attorney violated Rule 1042.3(a)(1) and (2) by
     improperly certifying that an appropriate licensed professional
     has supplied a written statement that there exists a reasonable
     probability that the care, skill or knowledge experienced or
     exhibited in the treatment, practice or work that is the subject of
     the complaint, fell outside acceptable professional standards and
     that such conduct was a cause in bringing about the harm.

Pa.R.C.P. 1042.9 (note omitted; emphasis supplied).

     We previously determined:

     The Pennsylvania Rules of Civil Procedure, promulgated by our
     Supreme Court, provide for rules of construction. Pa.R.C.P.
     51-153. Overall, “[t]he object of all interpretation and
     construction of rules is to ascertain and effectuate the intention
     of the Supreme Court.” Pa.R.C.P. 127(a). However, the “rules
     shall be liberally construed to secure the just, speedy and
     inexpensive determination of every action or proceeding to which
     they are applicable.” Pa.R.C.P. 126. Additionally, Pa.R.C.P. 103
     (“Words and Phrases”) indicates that “[w]ords and phrases shall
     be construed according to the rules of grammar and according to
     their common and approved usage....” Pa.R.C.P. 103(a).
     Moreover, “[e]very rule shall be construed, if possible, to give


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     effect to all its provisions. When the words of a rule are clear
     and free from all ambiguity, the letter of it is not to be
     disregarded under the pretext of pursuing its spirit.” Pa.R.C.P.
     127(b).

Vogelsberger v. Magee-Womens Hosp. of UPMC Health System, 903

A.2d 540, 550 (Pa. Super. 2006). “Generally, a discretionary interpretation

is conferred upon the words ‘may’ and ‘should,’ whereas a mandatory

interpretation is usually conferred upon the word ‘shall.’” Commonwealth

v. Davis, 894 A.2d 151, 154 (Pa. Super. 2006).

     Moreover, in deciding whether sanctions are warranted, the trial court

must consider the following factors: the number, nature, and severity of the

violations, the defaulting party's willfulness or bad faith, prejudice to the

opposing party, and the ability to cure the prejudice.         See City of

Philadelphia v. Fraternal Order of Police Lodge No. 5 (Breary), 985

A.2d 1259, 1270 (Pa. 2009).

     Initially, we reject Appellants’ suggestion that our Rules of Civil

Procedure required the trial court to impose sanctions. Rule 1042.9 states

that a “court may impose appropriate sanctions[.]”      Pa.R.C.P. 1042.9(b)

(emphasis supplied).    A plain reading of the term “may” shows intent to

give the trial court discretion to decide whether to impose sanctions.

Appellants’ contention that sanctions are mandatory would eviscerate the

rule and would render meaningless the multi-faceted test to determine

whether sanctions are warranted. Moreover, to the extent that Appellants

argue that the violations committed herein were more egregious than

violations in other decisions from the Courts of Common Pleas, we reiterate

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that, “trial court decisions are not binding upon the Superior Court.”

Echeverria v. Holley, 142 A.3d 29, 36 (Pa. Super. 2016).

     Here, in denying sanctions, the trial court determined:

     First, [the trial court] acknowledges the violation of Rule 1042.9
     and [Plaintiffs’] failure to provide an adequate excuse, and, as
     such, noted the violation in its December 22, 2016 [o]rder.
     [Plaintiffs] argued that they had other written statements to
     support the [c]ertificate of [m]erit (these were not admitted by
     [the trial court]), but [Plaintiffs’] argument only proved their
     unfamiliarity with the requirements of Pa.R.C.P. 1042.3 and
     1042.9 and did not prove substantial compliance.

     Next, it must be noted that the issue that was litigated before
     [the trial court] had nothing to do with the professional
     negligence counts. The stage of litigation in this matter was
     such that [Appellants] had yet [to file] an answer to [Plaintiffs’]
     [c]omplaint.    All matters before the [trial court], including
     conferences and the hearing, did not concern the professional
     negligence of [Appellants].         Rather, the [p]etition for
     [i]njunction, which was scheduled to conclude ten days following
     the voluntary withdrawal of the action by [Plaintiffs], did not
     concern the professional negligence claims and no time was
     spent with the [trial court] on those matters. In addition, while
     [Appellants] would have had to notify their insurance carriers of
     the professional negligence claim, they would have also notified
     their carriers of the other counts in the complaint. Again, the
     matters before the [trial court] concerned the AIA document and
     the validity and applicability of the arbitration clause and the
     conferences before [the trial court] concerned the same.

     It was apparent to [the trial court] through its dealings and
     conversations with counsel that the parties involved have great
     animosity toward one another and that both sides sought to
     attack the other through the legal system. However, [the trial
     court] did not accept the argument by [Appellants] that the
     failure to comply with Pa.R.C.P. 1042.9 was willful and that the
     litigation was ‘fake’ litigation. [The trial court] sat through
     lengthy conferences where it was clear that this was not
     [Plaintiffs’] intent and where settlement was sought by both
     sides. The argument on the [m]otion for [s]anctions and the

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      dealings that [the trial court] had with counsel for both sides, led
      [the trial court] to believe that [Plaintiffs’] counsel may have
      been overly zealous in adding professional negligence claims in
      what was substantially a contract [dispute] case without the
      legal expertise to raise such a claim in compliance with Pa.R.C.P.
      1042.3. However, [the trial court] did not conclude from the
      circumstances that the act was done with knowledge that the
      claim was not supportable or to bring ‘fake litigation.’

      Lastly, [Plaintiffs] did not withdraw their complaint with
      prejudice. [The trial court was] unaware of any previous non-
      compliance with the subject rule with [Plaintiffs’] counsel.
      Should [Plaintiffs] try to refile their professional negligence claim
      against [Appellants] in this matter, strict compliance with
      Pa.R.C.P. 1042.3 would be required [] and no further violations
      would be tolerated without the imposition of sanctions. Finding
      [Plaintiffs] in violation of the rule, without additional sanctions,
      should prove to be effective to deter any further noncompliance.

Trial Court Opinion, 3/13/2017, at 9-11.

      Based upon our standard of review and a review of the certified, we

find no abuse of discretion in the trial court’s assessment. The trial court, in

deciding   whether     sanctions   were    warranted,     fully    considered     the

abovementioned factors.      The trial court determined that Plaintiffs, while

overzealous in bringing the professional liability claim against Appellants, did

not act willfully or in bad faith. The trial court made its decision after having

multiple conferences with the parties.        We will not usurp the trial court’s

credibility determination.   Moreover, the trial court concluded there was

minimal prejudice to Appellants because Plaintiffs withdrew the complaint

without    prejudice   approximately      four   months    after    instituting    it.

Furthermore, the parties’ early arguments were all centered on whether the

parties were subject to binding arbitration and did not touch upon Plaintiffs’



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professional negligence claim at all.     The trial court further noted that

counsel for Plaintiffs had not engaged in dilatory conduct pertaining to

certificates of merit in the past. Because the case was discontinued, the trial

court crafted a future remedy in case of potential noncompliance with the

certificate of merit requirements.    The trial court carefully examined the

factors for determining whether to impose sanctions and concluded they

were not warranted. We discern no abuse of discretion.

      Order affirmed.

Judgment Entered.




Joseph D. Seletyn, Esq.
Prothonotary



Date: 10/12/2017




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