J-A04026-14


                                 2014 PA Super 207

NANCY M. LENAU AND DANIEL T. LENAU               IN THE SUPERIOR COURT OF
AND KATHLEEN TRIESCHOCK ON                             PENNSYLVANIA
BEHALF OF THEMSELVES AND OTHERS
SIMILARLY SITUATED

                            Appellants

                       v.

CO-EXPRISE, INC.

                            Appellee                 No. 780 WDA 2013


                    Appeal from the Order of May 1, 2013
             In the Court of Common Pleas of Allegheny County
                     Civil Division at No.: GD 12-022218


BEFORE: BOWES, J., WECHT, J., and STABILE, J.

OPINION BY WECHT, J.:                           FILED SEPTEMBER 23, 2014

      In this case involving subsurface mineral rights, Nancy M. Lenau,



from the May 1, 2013 order that sustained the preliminary objections of Co-

                   -

the reasons that follow, we affirm.

      The trial court summarized the factual history of this case as follows:

      This litigation arises out of the conduct of [Co-eXprise], which,
      acting as an intermediary, encouraged property owners in
      Beaver County, Pennsylvania to pool their interests by joining
      [Co-
      the CX MarketPlace by signing a form agreement prepared by
      [Co-
      Agreement authorized Co-eXprise to competitively bid mineral
      rights on behalf of the aggregated group of property owners for
J-A04026-14


       the purpose of obtaining the most favorable lease terms for each
       individual CX MarketPlace member.

       Property owners who entered into [Co-
       Agreement were organized into groups with each group
       comprised of landowners within a defined geographical area.
       [Co-eXprise] then sought bids from energy companies on behalf
       of each group of landowners, who as a group could command
       superior bargaining power and obtain more favorable terms in
       leases of their subsurface mineral rights, thereby maximizing
                                        d royalty payments.[1] Under
       the terms of the MarketPlace Agreement, once Co-eXprise
       obtained a bid from an energy company which contained lease
       terms that met or exceeded a predetermined threshold amount
       for bonus and royalty payments (outlined at [Section] 2(f) of the
       MarketPlace Agreement, [see Complaint, 11/21/12, Exhibit D, at
       1]), each property owner in the group was obligated to execute
       a mineral lease with that energy company, which lease would
       reflect the terms the energy company proposed during the
       bidding process.

       [Co-eXprise] initially promoted the MarketPlace program through
       mass[]advertising and by conducting meetings with groups of
       property owners during which Co-eXprise representatives
       solicited participation in the CX MarketPlace by assuring
       landowners that MarketPlace participants would obtain the best
       available bonus and royalty payments through the competitive
       bidding process. Promotional materials were prepared by [Co-
       eXprise] and provided to prospective MarketPlace members via
____________________________________________


1
       The trial court explained such agreements as follows:

       [I]n an effort to reap the gas located underground throughout
       Western Pennsylvania, a representative of an energy company

       mineral rights for a term of several years. In consideration for
       this mineral lease, the energy company offers an up-front bonus
       payment, usually based on the acreage of the leasehold, and
       ongoing royalty payments, which are generally calculated as a
       percentage of the market value of the extracted gas.

Trial Court Opinion, 4/10/2013, at 1.



                                           -2-
J-A04026-14


     regular mail, the Internet, and by hand during promotional
     meetings. [See id. at Exhibits A-C]. Among the materials that
     [Co-eXprise] supplied [to Appellants], either directly or through
     [Co-
     various terms commonly included in oil and gas leases based on
     [Co-                               See id. at Exhibit C, at
     unnumbered pages 1-3 (Lease Summary)].               [Co-eXprise]
     represented in the MarketPlace Agreement that any resulting
     lease agreement between the landowner and energy company
     would contain terms substantially similar to those contained
     within this [Lease Summary]. These terms were more favorable
     to the landowner than the terms of the standard lease
     agreements used by the energy companies.

     The MarketPlace Agreement provided for [Co-eXprise] to receive
     five percent of the up-front bonus in consideration for its
     services. The money would be paid as soon as the landowner
     and the highest[-]bidding energy company entered into a lease
     agreement reflecting the terms of the bid.

     On the basis of [Co-
     entered into MarketPlace Agreements with [Co-eXprise] in
     January 2011.1      [Co-eXprise] sought bids on behalf of
     [Appellants] and fellow MarketPlace participants, and, at the
     conclusion of the bidding process, identified Chesapeake
     Appalachia, LLC [(Chesapeake),] as the highest bidder.

     than a bid that would be binding on the MarketPlace members
     under the provisions of the MarketPlace Agreement. A bid would

     than a $3,000 per acre bonus, a 17% royalty, and the
     substantial inclusion of the sample lease terms. The Chesapeake
     bid provided for a $2,350 per acre bonus and a 15% royalty.
     [See Complaint, at 9-10 ¶ 26].
       1
           The Lenau [Appellants] signed the MartketPlace
           Agreement on or about January 24, 2011, and the
           Trieschock  [Appellants]   signed    the  MarketPlace
           Agreement on January 20, 2011. [See Co-
           Preliminary Objections, 1/04/2013, Exhibit 2 (Lenau
           Agreement) and Exhibit 3 (Trieschock Agreement)].

     [Co-eXprise] notified the Lenau [Appellants] and the other
     members of their group of the offer from Chesapeake at a June

                                   -3-
J-A04026-14


     28, 2011 meeting, and represented that the terms reflected the
     best market terms available. These [Appellants] and the other
     members of the Lenau group received an email correspondence
     on July 15, 2011 encouraging them to accept the terms of the
     Chesapeake offer by signin
                                                     2
                                                        The Lenau
     [Appellants] signed the Agreement to Accept on August 1,
     2011[.]3
       2
          [See Complaint, Exhibit F, at 1]. Trieschock received a
       similar email in September 2011 notifying her of an offer

       landowner group.
       3
          [See Co-
       Exhibit 4. Trieschock, a member of a different group than
       the Lenau [Appellants], was presented with a different
       offer and signed the Agreement to Accept that offer on
       October 7, 2011. [Id. at] Exhibit 5.

     It appears from the record that [Co-eXprise] continued to recruit
     landowners into the CX MarketPlace and, pursuant to that
     recruitment effort, notified other landowners in the area that an


     terms and the best current market price available in the area.
     These prospective participants were warned that prices may
     decline, and, in order to take advantage of the offer, landowners
     should complete the CX MarketPlace and [Agreement to
     Accept].4
       4
           MarketPlace members and prospective members in the

       Accept] no later than August 4, 2011 in order to be eligible
       to attend the August 5, 2011 lease-signing event.
       Trieschock, again, a member of a different group, signed
       the Agreement to Accept on October 7, 2011.

     MarketPlace   member    landowners    who  elected to accept
                                                       -signing event
     where the landowners entered into individual oil and gas leases
     with Chesapeake.5
       5
         Lenau attended the lease[-]signing event on August 5,
       2011; Trieschock on October 28, 2011.


                                   -4-
J-A04026-14


       Once a landowner signed a mineral lease with Chesapeake, [Co-
       eXprise] collected its transaction fee five percent of the
                              -front, bonus payment directly from
       Chesapeake.

                                                    -4.



                                                                         -eXprise,

including: (1) breach of contract; (2) unauthorized practice of law; (3)

violation of the Pennsylvania Unfair Trade Practices and Consumer Protection
                   2
                       ; (4) violation of the Pennsylvania Securities Act of 1972;

(5) breach of fiduciary duty; and (6) unjust enrichment/disgorgement. See

Complaint, at 14-25. Specifically, Appellants asserted the foregoing claims

as a class action:

       [Appellants] bring this action on behalf of themselves and the
       following Plaintiff Class: every citizen, or landowner, in the
       Commonwealth of Pennsylvania who has entered into a [CX
       MarketPlace Agreement] with [Co-eXprise] and paid [Co-
       eXprise] a transaction fee pursuant to said agreement, which
       arose out of a negotiation and consummation of an oil and gas
       lease through the [CX MarketPlace p]rocess.

Id. at 26 ¶ 88. Appellants sought certification of the class action, various

forms of compensatory and restitutionary damages, disgorgement of Co-



       On January 2, 2013, Co-eXprise filed a motion to assign the case to

the Commerce and Complex Litigation Center of Allegheny County.              That
____________________________________________


2
       See 73 P.S. § 201-1, et seq.



                                           -5-
J-A04026-14


same day, the trial court granted Co-

Co-eXprise filed preliminary objections in the nature of a demurrer to

                                                f these objections. In relevant

part, Co-

otherwise meritless. See Co-

8-18.    On January 28, 2013, Appellants filed a brief in opposition to Co-



arguments on Co-

                                                                         -

preliminary objections and di



                                                                -eXprise filed a

brief in opposition to reconsideration. On May 3, 2013, the trial court denied



        On May 8, 2013, Appellants filed a timely notice of appeal. The trial

court did not direct Appellants to file a concise statement of errors

complained of on appeal pursuant to Pa.R.A.P. 1925(b).           Consequently,

Appellants did not elect to file such a statement.      The trial court has not

issued a separate opinion pursuant to Pa.R.A.P. 1925(a).

        Appellants present the following issues for our consideration:

        I.    Whether the trial [c]ourt erred as a matter of law by
        sustaining [Co-




                                      -6-
J-A04026-14


        A. Where the [t]rial [c]ourt erred as a matter of law in its
        interpretation of ambiguous contract provisions, which
        otherwise support a breach of contract claim[] sufficient to
        overcome preliminary objections?

        B. By concluding as a matter of law that the allegations of
        the [c]omplaint and the [e]xhibits attached thereto
        including admissions during argument, do not raise a
        factual issue as to whether [Co-eXprise] have engaged in
        the unauthorized practice of law? and;

        C. By concluding as a matter [of law] that the lease of
        natural gas rights at issue is not a security as defined by
        the Pennsylvania Securities Act [of 1972]?

        D. By dismissing claims of breach of fiduciary duty and
        unjust enrichment?



                                          -

the nature of a demurrer.    Our standard of review in this context is well-

established:

     Our standard of review of an order of the trial court overruling or
     granting preliminary objections is to determine whether the trial
     court committed an error of law.          When considering the
     appropriateness of a ruling on preliminary objections, the
     appellate court must apply the same standard as the trial court.

     Preliminary objections in the nature of a demurrer test the legal
     sufficiency of the complaint.       When considering preliminary
     objections, all material facts set forth in the challenged pleadings
     are admitted as true, as well as all inferences reasonably
     deducible therefrom.      Preliminary objections which seek the
     dismissal of a cause of action should be sustained only in cases
     in which it is clear and free from doubt that the pleader will be
     unable to prove facts legally sufficient to establish the right to
     relief. If any doubt exists as to whether a demurrer should be
     sustained, it should be resolved in favor of overruling the
     preliminary objections.




                                    -7-
J-A04026-14


Feingold v. Hendrzak, 15 A.3d 937, 941 (Pa. Super. 2011) (quoting Haun

v. Community Health Systems, Inc., 14 A.3d 120, 123 (Pa. Super.

2011)).

     In their first claim, Appellants argue that the terms of the MarketPlace

Agreement regarding the payment of transaction fees to Co-eXprise are

ambiguous and should be construed in favor of Appellants:

     Specifically, [Appellants] allege[,] and the [e]xhibits and
     documents support [a conclusion,] that [Co-eXprise] breached
     [the MarketPlace Agreement] by promising that the payment of
     the transaction fee will be a written obligation imposed on the
     successful bidder in the lease agreement, ([e]qual to 5 [percent]
     multiplied by the gross up[-]front bonus payment upon the
     completion of each negotiation event), but failed to ultimately
     impose the transaction fee upon the successful bidder, and
     binding the landowners to a similar renewal term (with the
     ultimate[ly] successful bidder[,] Chesapeake) at the expiration
     of the initial five[-]year lease term. In this regard, the [t]rial
     [c]ourt erred in its interpretation of the contract language as

     by Co-eXprise.



the MarketPlace Agreement was ambiguous, such that the trial court should

not have sustained Co-                                   Id. at 20, 22. We

disagree.



                                                                          ter of



               Integrated Project Servs. v. HMS Interiors, Inc., 931




                                   -8-
J-A04026-14


A.2d 724, 732 (Pa. Super. 2007) (quoting Welteroth v. Harvey, 912 A.2d

863, 866 (Pa. Super. 2006)).

     It is also well[-]established that under the law of contracts, in
     interpreting an agreement, the court must ascertain the intent of
     the parties.

     In the cases of a written contract, the intent of the parties is the
     writing itself. If left undefined, the words of a contract are to be
     given their ordinary meaning. Pines Plaza Bowling, Inc. v.
     Rossview, Inc., 145 A.2d 672, 676 (Pa. 1958). When the
     terms of a contract are clear and unambiguous, the intent of the
     parties is to be ascertained from the document itself.
     Hutchison v. Sunbeam Coal Corp., 519 A.2d 385, 390 (Pa.
     1986). When, however, an ambiguity exists, parol evidence is
     admissible to explain or clarify or resolve the ambiguity,
     irrespective of whether the ambiguity is patent, created by the
     language of the instrument, or latent, created by extrinsic or
     collateral circumstances. Steuart v. McChesney, 444 A.2d
     659, 663 (Pa. 1982);                      , 161 A.2d 32, 34 (Pa.
     1960).

Kripp v. Kripp, 849 A.2d 1159, 1163 (Pa. 2004) (citations modified).

     With specifi

of contract interpretation, our Supreme Court has opined as follows:


     susceptible of different constructions and capable of being
     understood in                             Hutchison, 519 A.2d at
     390. This is not a question to be resolved in a vacuum. Rather,
     contractual terms are ambiguous if they are subject to more
     than one reasonable interpretation when applied to a particular
     set of facts. See Gamble Farm Inn, Inc. v. Selective Ins.
     Co., 656 A.2d 142, 144 (Pa. Super. 1995); Techalloy Co., Inc.
     v. Reliance Ins. Co., 487 A.2d 820, 823 (Pa. Super. 1984). We
     will not, however, distort the meaning of the language or resort
     to a strained contrivance in order to find an ambiguity. Steuart,
     444 A.2d at 663.

Madison Const. Co. v. Harleysville Mut. Ins. Co., 735 A.2d 100, 106 (Pa.



                                    -9-
J-A04026-14


clauses must be construed, whenever possible, in a manner that effectuates

                                               Welteroth, 912 A.2d at 866 (citing

Flatley by Flatley v. Penman, 632 A.2d 1342, 1344 (Pa. Super. 1993)).



annul another part and that writings which comprise an agreement must be

                              Southwestern Energy Prod. Co. v. Forest Res.,

LLC, 83 A.3d 177, 187 (Pa. Super. 2013) (citing Shehadi v. Northeastern

             , 378 A.2d 304, 306 (Pa. 1977)).

       In relevant part, the MarketPlace Agreement that is implicated by



       3.    Transaction Fee. For the following addresses identified
       in Exhibit B, Owner[3
       Lease Agreement with the successful Bidder,[4] in an amount
       equal to 5% multiplied by the gross up front bonus payment
       upon the completion of each Negotiation Event. The payment of
       the Transaction Fee shall be a written obligation imposed on the
       successful Bidder in the Lease Agreement. In the event that
       while this MarketPlace Agreement is in effect, Owner breaches
       this MarketPlace Agreement and enters a Lease Agreement on
       any of the Parcels outside of the MarketPlace Agreement, Owner
       shall be responsible to pay the Transaction Fee pertaining to
       such Parcel.
____________________________________________


3
       In the MarketPlace



4
    According to the language of the MarketPlace Agreement, the term
                                                               e.g., gas
companies, financial institutions, and others that may be interested in

                                               .



                                          - 10 -
J-A04026-14



MarketPlace Agreement, at 1 ¶ 3.

     Appellants argue that this language is ambiguous, in that it does not



     There is one sentence in Section 3 of the [MarketPlace
     Agreement] that is clear and unambiguous[,] which is as follows:


     is nothing ambiguous about this sentence. It mandates that the



     The [t]rial [c]ourt, attempting to give effect to all of the words in
     Section 3, interprets the second sentence as reading
     successful bidder will make the payment to Co-eXprise on behalf
                                                                  not the
     language Co-eXprise utilized in the contract. The language
     utilized does not clearly impose the obligation to pay the
     transaction fee on the owner. Section 3 is ambiguous in that it
     does not state who the transaction fee will be paid to[,] or whose
     services are being compensated. Finally, the last sentence of
                                                                       ce
     Agreement is in effect, owner breaches this [M]arket[P]lace
     [A]greement and enters a lease agreement on any of the parcels
     outside of the [M]arket[P]lace [A]greement, owner will be
     responsible to pay the transaction fee pertaining to such
     parcel              creates ambiguity in relation to the first
     sentence.

                      -19 (emphases in original).



interpretation of Section 3 of the MarketPlace Agreement is a selective

reading that focuses upon the meaning of a single sentence, to the exclusion

of the other relevant language:

     Section 3 clearly provides for the landowner to make the five
     percent bonus payment.       The first sentence provides for

                                    - 11 -
J-A04026-14


     [Appellants] to pay a transaction fee of five percent of the gross
     up-front bonus payment. The second sentence provides that
     [Chesapeake] will make the five-percent payment to [Co-
     eXprise] on behalf of [Appellants]. However, if [Appellants], in
     breach of [their] agreement with [Co-eXprise], enter[] into a
     contract that does not include a written obligation for
     [Chesapeake] to make the five-percent payment to [Co-eXprise]
     on behalf of [Appellants], [Appellants] will be responsible for
     transmitting the payment.

T.C.O. at 5.   We concur with the tria

instant contract provision.    The first sentence of Section 3 unambiguously

states that the landowners       in this case, Appellants   bear the financial

responsibility of paying Co-                                              ds of

their initial bonus payment. The second sentence of Section 3, which places

the obligation of actually transmitting those funds upon Chesapeake, does



manner in which payment

the third sentence of Section 3 does not create ambiguity, but merely

provides for a contingency in which a landowner breaches the MarketPlace

Agreement by entering into a lease agreement that does not expressly

provide for the payment of a transaction fee.

     By focusing solely upon the meaning of the second sentence of Section



that our governing precedent forbids. See Southwestern Energy Prod.,



full effect to an entire document, if possible, and not only those portions


                                     - 12 -
J-A04026-14


supporting a specific conclusion.   Id.

parties on the meaning of language or the proper construction of contract

                                          Pappas v. UNUM Life Ins. Co. of

America, 856 A.2d 183, 187 (Pa. Super. 2004). Instantly, Appellants argue

that the second sentence of Section 3 indicates that payment of the

                                                                       in this



ignores the first sentence of Section 3, which clearly indicates that the

financial responsibility of payment is upon the landowner. See T.C.O. at 5



                                             -

other hand, gives meaning to each provision

      Based upon the foregoing discussion, we conclude that the contract

terms of Section 3 of the MarketPlace Agreement are not ambiguous.

Consequently, the trial court did not err in sustaining Co-

preliminary objections on thi

      In their second claim, Appellants allege that the trial court erred in

                                      -eXprise engaged in the unauthorized

practice of law. See                         -23. The trial court has provided

an excellent summary of the conduct referenced by Appellants in support of

their position:




                                    - 13 -
J-A04026-14


      In support of their position that [Co-eXprise] is practicing law,
      [Appellants] refer to the following activities:      [Co-eXprise]
      solicited landowners requesting they participate in its bidding
      scheme; [Co-eXprise] presented an agreement for the
      landowners to execute in order for them to receive [Co-
                              -eXprise] delivered to the landowners an
      explanation of the terms of a lease that the winning bidder will
      be required to use; [Co-eXprise] described to the landowners the
      terms of the highest bid and recommended that they accept the
      bid; [Co-eXprise] furnished information to the landowners who
      accepted the bid as to documents that would need to be brought
      to the mass signing and other relevant information; and the
      bidder and the landowner[s] were required to sign the lease
      agreement provided by [Co-eXprise] which included protections
      to the landowners that are not typically included in the form
      leases of the energy company.

T.C.O. at 6-7 (footnote omitted).   Thus, Appellants allege that Co-eXprise

engaged in the unauthorized practice of law. We disagree.

      The unauthorized practice of law is prohibited in Pennsylvania, and

such conduct is criminalized.   See 42 Pa.C.S.A. § 2524(a).      Additionally,

Section 2524(c) creates a private civil cause of action in connection with the

unauthorized practice of law.    Id. at § 2524(c).    In pertinent part, the

statute reads as follows:

      (c) Injunction. In      addition    to   criminal   prosecution,
      unauthorized practice of law may be enjoined in any county
      court of common pleas having personal jurisdiction over the
      defendant. The party obtaining such an injunction may be
      awarded costs and expenses incurred, including reasonable
      attorney fees, against the enjoined party.        A violation of
      subsection (a) is also a violation of the act of December 17,
      1968 (P.L. 1224, No. 387), known as the Unfair Trade Practices
      and Consumer Protection Law.

Id.




                                    - 14 -
J-A04026-14


     The Supreme Court of Pennsylvania has thoroughly discussed what



     The Pennsylvania Constitution vests with our [Supreme] Court
     the exclusive authority to regulate the practice of law, which
     includes the power to define what constitutes the practice of law.
     Pa. Const. Art. V, § 10(c); Dauphin County Bar Association v.
     Mazzacaro, 351 A.2d 229, 233 (Pa. 1976). What constitutes
     the practice of law, however, is not capable of a comprehensive
     definition.   For this reason, [the Supreme] Court has not
     attempted to provide an all-encompassing statement of what
     activities comprise the practice of law. Office of Disciplinary
     Counsel v. Marcone, 855 A.2d 654, 660 (Pa. 2004); Shortz
     et. al. v. Farrell, 193 A. 20, 21 (Pa. 1937). Thus, we have
     determined what constitutes the practice of law on a case-by-
     case basis.

     While our Court has addressed the question of what constitutes
     the practice of law on an individualized basis, we have made
     clear that paramount to the inquiry is consideration of the public
     interest. Marcone, 855 A.2d at 658; Dauphin County, 351
     A.2d at 233. Consideration of the public interest has two related
     aspects: protection of the public and prudent regulation so as
     not to overburden the public good.

     Regarding the protection of the public, then Justice, later Chief

     concern in Shortz[:]

       While in order to acquire the education necessary to gain
       admission to the bar and thereby become eligible to
                                         corn delights, and live

       practice to laymen is not to secure lawyers a monopoly,
       however deserved, but, by preventing the intrusion of
       inexpert and unlearned persons in the practice of law, to
       assure to the public adequate protection in the pursuit of
       justice, than which society knows no loftier aim.

     Shortz, 193 A. at 24.


                               *     *      *



                                   - 15 -
J-A04026-14


      When considering the public interest, our [Supreme] Court has
      focused on the character of the activities at issue. In Shortz,
      our [Supreme] Court set forth three broad categories of
      activities that may constitute the practice of law: (1) the
      instruction and advising of clients in regard to the law so that
      they may pursue their affairs and be informed as to their rights
      and obligations; (2) the preparation of documents for clients
      requiring familiarity with legal principles beyond the ken of
      ordinary laypersons; and (3) the appearance on behalf of clients
      before public tribunals in order that the attorney may assist the
      deciding official in the proper interpretation and enforcement of
      the law. Shortz, 193 A. at 21. More recently, our [Supreme]
      Court expressed that the practice of law is implicated by the
      holding out of oneself to the public as competent to exercise
      legal judgment and the implication that he or she has the
      technical competence to analyze legal problems and the requisite
      character qualifications to act in a representative capacity.
      Dauphin County, 351 A.2d at 232-33 (considering whether
      licensed casualty adj
      constituted the unauthorized practice of law).          Thus, the
      character of the actions taken by the individual in question is a
      significant factor in the determination of what constitutes the
      practice of law.

Harkness v. Unemployment Comp. Bd. of Review, 920 A.2d 162, 166-



practice of law is made on a case-by-case basis, focusing primarily on

protection of the public and the public weal, and in doing so, considering the



Id. at 167.

      Appellants argue that Co-



require[d] abstract understanding of legal principals [sic] and refined skill for




                                     - 16 -
J-A04026-14




allege that Co-

                                                                    hts,
      encumbrances on the property, liens, easements, and certain
      environmental issues. The transactions contemplated require[d]
      an understanding of the legal principals [sic] implicated by
      contract law and real property law. Oil, gas and mineral rights
      law is itself a specialty in Pennsylvania. There are a variety of
      concepts including surface rights for drilling, surface rights for
      pipelines, rights to natural gas storage, concerns related to
      environmental pollution, just to name a few.

Id. at 24.   While Appellants urge that Co-



fact that a company utilizes documents prepared by lawyers, and relies upon

the opinions of lawyers in conducting its business, does not, ipso facto,

indicate that a company is practicing law:

      [W]hat [Appellants] describe is a bidding company conducting its
      business. There is no explanation by [Appellants] as to which of
      the activities described above constitute the practice of law.

      Lawyers are frequently involved in drafting the writings that the
      more sophisticated party to a transaction will use. The drafting
      of the writings may be the practice of law. But the use of those
      writings has nothing to do with the practice of law.

T.C.O. at 7 (emphases added).

      Assuming, arguendo, that Co-

that are typically handled by lawyers, our Supreme Court has specifically

endorsed such actions in the limited context of business transactions:

      There can be no objection to the preparation of deeds and
      mortgages or other contracts by such brokers so long as the
      papers involved pertain to and grow out of their business


                                    - 17 -
J-A04026-14


       transactions and are intimately connected therewith. The
       drafting and execution of legal instruments is a necessary
       concomitant of many businesses, and cannot be considered
       unlawful. Such practice only falls within the prohibition . . .
       when the documents are drawn in relation to matters in no
       matter connected with the immediate business of the person
       preparing them, and when the person so drafting them is not a
       member of the bar and holds himself out as specially qualified
       and competent to do that type of work.

Childs v. Smeltzer, 171 A. 883, 885-86 (Pa. 1934) (emphasis added).

Instantly, Co-



properties. Appellants have not alleged that Co-eXprise held itself out as a
                                                                            5
legal actor in any way beyond Co-eX

____________________________________________


5
      Moreover, in Childs
estate broker is not prohibited from drawing a deed of conveyance or other
appropriate instrument relating to property of which he or his associates
have negotiated a sale or lease    Childs, 171 A. at 886. Although the trial
court does not cite Childs, its discussion certainly alludes to the many
parallels between Co-
Childs:

       There is not a great deal of difference between the activities
       performed by [Co-eXprise] in this case and the activities
       performed by a real estate agent for a seller of residential
       property. The agent solicits the general public; the agent follows
       up on leads; the agent is retained by having the seller sign a

       agent explains the terms of the form agreement to the seller
       before it is signed; there may be bargaining between the sales
       agent and the seller; the agent makes recommendations to the
       seller reg
       respond to offers; unless the buyer is represented by counsel,
       the agent will have the buyer sign the form sales agreement

(Footnote Continued Next Page)


                                          - 18 -
J-A04026-14




have failed to allege any facts that, if proved at trial, would lead to a

conclusion that Co-eXprise was engaged in the unauthorized practice of law.

While our Supreme Court has clearly stated that we should guard against

unauthorized     legal     practice,   that      Court   also   has   cautioned   against

unnecessarily expanding our definition of what constitutes such practice:

      While the public interest is certainly served by the protection of
      the public, it is also achieved by not burdening the public by too
      broad a definition of the practice of law, resulting in the

      [Supreme] Court in Dauphin County[:]

          The threads of legal consequences often weave their way
          through even casual contemporary interactions. There are
          times, of course, when it is clearly within the ken of lay
          persons    to  appreciate   the    legal   problems   and
          consequences involved in a given situation and the factors
          which should influence necessary decisions. No public
          interest would be advanced by requiring these lay
          judgments to be made exclusively by lawyers . . . .

      Dauphin County, 351 A.2d at 233.

                       _______________________
(Footnote Continued)

      between the agent for the seller and the buyer and/or the

      and if the buyer has an attorney, the attorney will negotiate
      directly with the agent for the seller.

      Also consider the typical transaction involving mineral rights: a
      representative of the energy company solicits the landowner; the
      representative furnishes a copy of its form lease for the
      landowner to sign; the representative explains and/or responds
      to questions of the landowner about its contents; and the
      representative assumes responsibility for all of the paperwork.

T.C.O. at 7.



                                           - 19 -
J-A04026-14


Harkness, 920 A.2d at 167.6

         Based upon the foregoing discussion, we conclude that the trial court

                                                              -eXprise engaged in the

unauthorized      practice   of   law.         Appellants   were   not   pursuing   legal

representation through Co-eXprise. Rather, Appellants engaged in contract

negotiations regarding their mineral rights with Co-eXprise, negotiations

which Co-eXprise is authorized to undertake as a matter of Pennsylvania

law.     See Childs

fails.

         In their third issue before this Court, Appellants assert that Co-eXprise

has violated the Pennsylvania Securities Act of 1972:

                                               -eXprise violated the
         Pennsylvania Securities Act of 1972 by providing investment
         advice as defined by the Act to [Appellants] and other
____________________________________________


6



commercial consequences:

         The landowners did not look to [Co-eXprise] for legal
         representation. Except for those landowners who consulted with
         counsel, the landowners would have viewed themselves as
         unrepresented persons deciding whether to contract with [Co-
         eXprise]. . . .    Thus, if the courts were to agree with

         transaction described to a consumer by a more sophisticated
         party constitutes the unauthorized practice of law, many
         businesses would be put out of business.

T.C.O. at 6.




                                          - 20 -
J-A04026-14


      landowners. [Appellants] have alleged that Co-eXprise ha[s] not
      properly registered with the Pennsylvania Securities Commission
      as required by Section 301 of the Securities Act. The touchstone
                                   s the allegation that the Pennsylvania
      Securities Act of 1972 defines participation in an oil, gas or
      mining title or lease (or in payments out of production under
      such a lease or title) to be a security subject to the Act.

                           -29 (citing 70 P.S. § 1-102(t)).   Thus, Appellants

argue that Co-

the business of advising others . . . as to the value of securities or as to the

advisability of investing                                                      -

102(j).




question of law, our standard of review is de novo, and our scope of review

               Commonwealth v. Hacker, 15 A.3d 333, 334 (Pa. 2011)

(citing Snead v. SPCA of Pennsylvania, 985 A.2d 909, 912 (Pa. 2009)).



                 Id. (ci

interpretation and construction of statutes is to ascertain and effectuate the

intention of the General Assembly.       Every statute shall be construed, if

                                                          Court previously has

identified this underlying intent:

      The Pennsylvania Securities Act is remedial legislation.     Its
      primary purpose is to protect the investing public. The Act
      contemplates an investigation to determine whether the
      securities are being offered to the public honestly and in good

                                      - 21 -
J-A04026-14


     faith without any intent to deceive or defraud. Commonwealth
     v. Summons, 41 A.2d 697, 699 (Pa. Super. 1945). That part of
     the Securities Act[,] therefore[,] which specifies classes of
     investments which are within the contemplation of the
     legislation, is to be liberally construed. And the clear intent of
     the Act is not to be defeated by a too literal reading of words
     without regard to their context and the evils which the Act
     clearly was designed to correct.

Commonwealth v. Yaste, 70 A.2d 685, 687 (Pa. Super. 1950); see also

Commonwealth v. Bomersbach, 393 A.2d 995, 998 (Pa. Super. 1978)



classes of    investments that   are   to    be   protected   must   be   liberally

                    Yaste, 70 A.2d at 687).



     (t)                means any note; stock; treasury stock; bond;
     debenture; evidence of indebtedness; share of beneficial interest
     in a business trust; certificate of interest or participation in any
     profit-sharing    agreement;       collateral   trust    certificate;
     preorganization certificate or subscription; transferable share;
     investment contract; voting trust certificate; certificate of
     deposit for a security; limited partnership interest; fractional
     undivided interest in oil, gas or other mineral rights; put,
     call, straddle, option or privilege on a security, certificate of
     deposit of a security or group or index of securities, including
     any interest in the securities or based upon the value of the
     securities, or any put, call, straddle, option or privilege entered
     into on a national securities exchange relating to foreign
     currency; membership interest in a limited liability company of
     any class or series, including any fractional or other interest in
     such interest, unless excluded by clause (v); or, in general, any

     certificate of interest or participation in, temporary    or interim
     certificate for, receipt for, guarantee of, or warrant    or right to
     subscribe to or purchase, any of the foregoing.           All of the
     foregoing are securities whether or not evidenced         by written
     document.



                                    - 22 -
J-A04026-14


70 P.S. § 1-102(t) (emphasis added).               As noted above, Penns



                                    Id.

       The Pennsylvania Securities Act of 1972 also states the following with



       § 1-301. Registration requirement.

                                      *        *   *

       (c)   It is unlawful for any person to transact business in this
       State as an investment adviser unless he is so registered or
       registered as a broker-dealer under this act or unless he is
       exempted from registration. It is unlawful for any person to
       transact business in this State as an investment adviser
       representative unless he is so registered or exempted from
       registration.

Id. at § 1-301(c). In the light of the foregoing, our task is clear. We must

ascertain whether the leasing of mineral rights in this context constitutes a



             see id. at § 1-102(t), such that Co-eXprise must be registered as



       Our Court adjudicated a question very similar to this in Yaste, 70 A.2d

at 686, albeit under the Pennsylvania Securities Act of 1939.7 In Yaste, this

____________________________________________


7
      The terms of the Pennsylvania Securities Act of 1939 that defined what
                                                         See 70 P.S. § 32.
However, the language used in the earlier iteration of this statute that is
relevant to our present inquiry is identical to the current language.
Compare Yaste                        32, defines a security in this language:
(Footnote Continued Next Page)


                                          - 23 -
J-A04026-14




a variety of forms were intended to be made subject to the regulatory

p                                                              Id. at 688. However,

in so holding, we specifically exempted the type of royalty agreements

implicated by the instant case.             Specifically, we relied upon an earlier

holding of the U.S. Supreme Court:

      It may be noted that a royalty interest in an oil lease, as the
      subject matter of sale, ha[s] been held not to be a security
      within the definition of the Act and therefore not within its
      purview. . . . [A] royalty interest in an oil lease, as the subject
      matter of sale, ha[s] been held not to be a security for the very
      reason that it was [considered] real property under the
      Securities Act of April 13, 1927, P.L. 273, 70 P.S. § 1, et seq.,

      interest
      The precise question was before the Supreme Court of the
      United States in Securities and Exchange Comm. v. C.M.
      Joiner Leasing Corp., 320 U.S. 344 (1943). In that case[,] the
      [U.S. Court of Appeals for the Fifth Circuit] had adopted a
      construction of the Federal Securities Act of 1933[,] which
      excluded from its operation all trading in oil and gas leases. The

      May 27, 1933, as amended, 15 U.S.C. § 77(b)(1), is
      substantially the same as that of the Pennsylvania Act and


      case[,] the defendants held leases on a large tract of land in
      Texas which they had obtained in consideration of their
                       _______________________
(Footnote Continued)

                                                    fractional undivided interest in
oil, gas, or other mineral rights                                      with 70 P.S.
§ 1-

our opinion in Yaste, we conclude that its interpretation remains relevant.



                                           - 24 -
J-A04026-14


      agreement to drill a test well.      On the inducement of the
      proposed exploration well[,] they sold small subdivisions of their
      leasehold to about fifty purchasers on an acreage basis. The
      sales literature assured the prospect that the drilling of a well, so
      located as to test the oil producing possibilities of the offered
      leaseholds, would be pushed to completion. Other language in
      the advertising literature emphasized the character of the
      purchase as an investment and as a participation in an
      enterprise. In disposing of the question whether the sales of



         u
         excludes sales of leasehold subdivision by parcels. Oil and
         gas rights posed a difficult problem to the legislative
         draftsman.     Such rights were notorious subjects of
         speculation and fraud, but leases and assignments were
         also indispensable instruments of legitimate oil exploration
         and production. To include leases and assignments by
         name might easily burden the oil industry by controls that
         were designed only for traffic in securities. This was
         avoided by including specifically only that form of splitting
         up of mineral interests which had been most utilized for
         speculative purposes. We do not think the draftsmen
         thereby immunized other forms of contracts and offerings
         which are proved as matter of fact to answer to such



      Joiner, 320 U.S. at 352.

Yaste, 70 A.2d at 687-88 (footnote omitted).        Thus, in Yaste, the Court




securities, but that other transfers of gas rights were not so burdened. See

id.

      Our case law on the subject of which mineral rights leaseholds




                                     - 25 -
J-A04026-14



Martin v. ITM International Trading & Marketing, 494 A.2d 451, 453

(Pa. Super. 1985), our Court derived some guidance from federal case law,

inasmuch as the relevant language in the federal Securities Act of 1933 is

identical to the Pennsylvania Securities Act of 1972. See Martin, 494 A.2d

at 453; compare 15 U.S.C.S. § 77b(a)(1), with 70 P.S. § 1-102(t). Like

the Martin panel, we turn to the federal courts for assistance in determining

whether the instant royalty agreements constitute regulated securities. See

id.; see also Yaste, 70 A.2d at 687-88.

       Our own Third Circuit has explained the meaning of a fractional

undivided interest as follows:

       [A]n interest arises when a lessee of mineral rights sells parts of
       its interest in the rights in order to finance the development of
       the minerals.      These are fractionalized undivided working
       interests because they give the investor rights to a percentage of

       therefrom and are subject to at least part of the expense of
       development, operation, or maintenance.

Penturelli v. Spector, Cohen, Gadon & Rosen, Attorneys at Law, P.C.,

779 F.2d 160, 165 (3d Cir. 1985).

       Furthermore, many federal courts8 have approved of the analysis set

forth in Woodward v. Wright, 266 F.2d 108, 112 (10th Cir. 1959), which

explained:

____________________________________________


8
 See, e.g., Nolfi v. Ohio Ky. Oil Corp., 675 F.3d 538, 547 (6th Cir. 2012);
Pacific Dunlop Holdings v. Allen & Co., 993 F.2d 578, 581 (7th Cir.
1993); Adena Exploration, Inc. v. Sylvan, 860 F.2d 1242, 1244 (5th Cir.
(Footnote Continued Next Page)


                                          - 26 -
J-A04026-14


      the sale or offering for sale of an oil and gas lease, or an
      undivided interest



      other persons to make their investment a profitable venture.

Woodward, 266 F.2d at 112. Under Woodward

interest is created for the purpose of sale, the conveyance of the interest is

                                  Adena Exploration, Inc. v. Sylvan, 860 F.2d

1242, 1246 (5th Cir. 1988).

      The statutory definition of a security includes both relatively

      alone carry well-
      categories, composed of instruments referenced b
                        Penturelli v. Spector, Cohen, Gadon &
      Rosen

      mineral rights sells parts of its interest in the rights in order to

      that the 1933 Act specifically enumerates these fractional
      interests as securities, stating:

          Congress chose not to include leases and assignments
          because they were indispensable instruments of legitimate
          oil exploration and production and it wanted to avoid
          burdening the oil industry by controls that were designed
          only for traffic in securities. On the other hand, Congress
          did specifically mention in the Acts the fractional undivided
          inter
          interests which had been most utilized for speculative



                       _______________________
(Footnote Continued)

1988); Penturelli, 779 F.2d 160 at 166; Gilbert v. Nixon, 429 F.2d 348,
354 (10th Cir. 1970); Shimer v. Webster, 225 A.2d 880, 883 (D.C. 1967);
Fund of Funds, Ltd. v. Arthur Andersen & Co., 545 F. Supp. 1314, 1346
(S.D.N.Y. 1982).



                                           - 27 -
J-A04026-14



Adena, 860 F.2d at 1247-1248 (footnotes omitted).9

       Thus, in Adena, the Fifth Circuit held that general leases and

assignments of oil and mineral rights do not constitute securities. The Court

addressed the language of the federal securities statutes and determined



balancing the need for regulation against the burdens to the oil industry.



                                                                Id. at 1245;

see also Commonwealth v. Frye, 853 A.2d 1062, 1066 (Pa. Super. 2004)

                                                        expressio unius est

exclusio alterius



(citing                                            ways, 222 A.2d 913 (Pa.

1966)).

       Similarly, the Sixth Circuit held that, when determining whether a



____________________________________________


9
     Interpreting the same language, the United States District Court for
the Ce


Fearneyhough v. McElvain, 598 F. Supp. 905, 907 (C.D. Ill. 1984)


meaning of the 1933 and 1934 Acts, notwithstanding the fact that the
plaintiffs retained an overriding one-



                                          - 28 -
J-A04026-14



                                                                           the

purchase guaranteed by oil production, is distinct from partnership and joint-

                                                Nolfi v. Ohio Ky. Oil Corp.,

675 F.3d 538, 546 n.5 (6th Cir. 2012) (citing Graham v. Clark, 332 F.2d

155, 156 (6th Cir. 1964)



In Nolfi




under 15 U.S.C.S. § 77b(a)(1). Id. at 546.

      In the instant case, Appellants argue that their involvement with Co-

eXprise created a security interest

common enterprise and [were] lead [sic] to expect profits solely from the



Martin



their tract of land, and based on [Co-

conveyed a lease interest based on the expectation of realizing profits, in the

form of royalty payments, solely from the efforts of [Co-eXprise] or a third

                         Id. at 32. We disagree.

                                                      Martin   is   misplaced.

Appellants cite Martin

originally set forth in S.E.C. v. Howey, 328 U.S. 293 (1946), which provides

                                    - 29 -
J-A04026-14




contract, transaction or scheme whereby a person invests his money in a

common enterprise and is led to expect profits solely from the efforts of the

                                   Martin, 494 A.2d at 453 (citing Howey,

328 U.S. at 298-99).



                                                                   leasehold

agreements offered by Co-eXprise is contradicted by their own pleading, in

which they acknowledge that they were already landowners when they were

first approached by Co-eXprise. (See Complaint, at 5 ¶¶ 11-12). Therefore,

                       the security at interest is an investment contract is

belied by the record. See Howey, 328 U.S. at 298-99.

                                                                     Howey

economic reality test was designed to determine whether a particular

instrument is an

                                                          Landreth Timber

Co. v. Landreth, 471 U.S. 681, 691 (1985). Thus, where the question is

whether the contested instrument is another type of security pursuant to 70

P.S. § 1-102(t), specifically, a fractional undivided interest in oil, gas or

other mineral rights, the Howey test, as described in Martin, does not

apply.

     Here, with the assistance of Co-eXprise, Appellants entered into an

agreement to lease their mineral rights to Chesapeake, while retaining the

                                   - 30 -
J-A04026-14



right to royalty payments. Cf. Fearneyhough v. McElvain, 598 F. Supp.

905, 907 (C.D. Ill. 1984). The agreement with Chesapeake does not split up

the interest in the leasehold for speculative purposes or to finance the



                                                            Nolfi, 675 F.3d at

546 n.5. Thus, under federal precedent, it would not constitute a fractional

undivided interest in the mineral rights, and would not be a security. See

Adena, 860 F.2d at 1245. We believe this approach is consistent with our



the subject matter of sale, ha[s] been held not to be a security within the

                              Yaste, 70 A.2d at 687.         Accordingly, the

agreements at issue here are not securities, and therefore are not regulated

by the Pennsylvania Securities Act, 70 P.S. §§ 1-101, et seq

claims under the Act therefore would not merit relief, and the trial court did

not err in granting Co-

third issue lacks merit.

      Finally, Appellants combine their fourth and fifth issues and assert that




regard to dismissal of counts alleging unauthorized practice of law, and

breach of the Securities Act, the equitable disgorgement/unjust enrichment

                   Id. (emphasis omitted).    Appellants having done so, we

                                    - 31 -
J-A04026-14



need only address their claim that Co-eXprise breached an alleged fiduciary

duty.

        Regarding this claim, Appellants assert:

        that Co-eXprise assumed a fiduciary duty to [them] in three
        distinct manners, (1) by agreeing to undertake to represent
                                                              ers which
        duty arose [by] virtue of the Market[P]lace Agreement, (2) by
        engaging in the unauthorized practice of law, and (3) by acting
        as an investment advisor.

        Specifically, [Appellants] contend that a breach of fiduciary duty
        claim arises by virtue of the Market[P]lace Agreement which
        contemplated that Co-eXprise would be vetting potential bidders

        access to the Co-


                          -37 (record citation omitted).     Because Appellants

have failed to identify any breach of duty owed to them by Co-eXprise, we

disagree.

        In their complaint, Appellants contend the following:

             78. By entering into the [Co-eXprise] Market[P]lace
        Agreement, [Co-eXprise] assumed a fiduciary duty toward
        [Appellants] because it was given the exclusive right and control

        lease them through the [Co-eXprise] Market[P]lace process
        which [Co-eXprise] maintained complete exclusive control over.
        The [Co-eXprise] Market[P]lace Agreement provided that if
        [Appellants] leased their oil and gas rights outside of the [Co-
        eXprise] Market[P]lace Agreement then [Appellants] would still
        be obligated to pay [Co-eXprise] the transaction fee. A fiduciary
        relationship arises whenever the relative position of the parties is
        such that one has the power and means to take advantage of
        the other or where there is a dependence or justifiable trust on
        the other.     It also arises because [Co-eXprise] assumed a
        relationship of trust and confidence toward [Appellants].



                                       - 32 -
J-A04026-14


            79. A fiduciary duty arose on behalf of [Co-eXprise]
      toward [Appellants], also, by virtue of the fact that it, through its
      authorized employees, [Co-eXprise] was engaging in the practice
      of law (although unauthorized) and performing investment
      advisory services.

            80. [Co-eXprise] breached this fiduciary duty owed
      toward [Appellants], and as a result of said breach, [Appellants]
      were collectively damaged in an amount totaling $31,246.39,
      which were the total fees paid collectively by [Appellants] to [Co-
      eXprise].

Complaint, at 23-24 ¶¶ 78-80.



would support a finding that [Co-eXprise] breached any duties owed to

[Appellants].   Second, the only harm described in the [c]omplaint is [Co-



obligated to pay these fees pursuant to the terms of the contract between




explanation, failed to plead any material facts regarding what the alleged

breach was. See id. at 24 ¶ 80. Even giving Appellants the benefi



Appellants failed to identify the manner in which Co-eXprise breached a duty

to them.   See Feingold, 15 A.3d at 941.       Although Appellants contended

                           ed their oil and gas rights outside of the [Co-

eXprise] Market[P]lace Agreement then [Appellants] would still be obligated

to pay [Co-                                    id. at 23 ¶ 78, by their own

admission, Appellants signed leases with Chesapeake and did not lease their


                                     - 33 -
J-A04026-14



oil and gas rights outside of the agreement. See id. at 11 ¶ 29. Further, as

previously discussed, Co-eXprise was not engaged in the practice of law or

investment advisory services, and therefore breached no duty upon these

grounds. See id. at 23-24 ¶ 79.



support this element of the claim, and Appellants therefore failed to state a

claim for breach of a fiduciary duty. See Grose v. P&G Paper Prods. (In

re Grose), 866 A.2d 437, 442 (Pa. Super. 2005).



question regarding the alleged breach of a fiduciary duty only if [they] first

establish[] a jury question that such a duty attaches to [an a]ppellee[] in the

                 Rock v. Meakem, 61 A.3d 239, 257 (Pa. Super. 2013).



a fiduciary or confidant or party in a position to exercise undue influence and

entering an arms[-]length commercial agreement, however important its

                                                               eToll, Inc. v.

Elias/Savion Adver., 811 A.2d 10, 23 (Pa. Super. 2002) (citing Valley

                                                                       , 28 F.

Supp. 2d 947, 952-953 (E.D. Pa. 1998)).

      Most commercial contracts for professional services involve one

      providing that particular service. Indeed, if a party did not
      believe that the professional possessed specialized expertise
      worthy of trust, the contract would most likely never take place.



                                    - 34 -
J-A04026-14


      This does not mean, however, that a fiduciary relationship arises
      merely because one party relies on and pays for the
      specialized skill or expertise of the other party. Otherwise,
      a fiduciary relationship would arise whenever one party had any
      marginally greater level of skill and expertise in a particular area
      than another party. Rather, the critical question is whether the
      relationship goes beyond mere reliance on superior skill, and into


      the other side. A confidential relationship is marked by such a
      disparity in position that the inferior party places complete trust

      to give rise to a potential abuse of power.

Id. at 23 (citations omitted, emphasis added).

      Here, Appellants simply alleged the existence of

                                               -eXprise. Complaint, at 23-24

¶



contractual relationship with Co-eXprise. See eToll, Inc., 811 A.2d at 23

(citations omitted). Thus, Appellants have failed to plead sufficient facts to

state a claim that the relationship with Co-eXprise was fiduciary, and not

merely contractual. Rock, 61 A.3d 239 at 257. Appellants have failed to

state a claim for breach of fiduciary duty, and the trial court did not commit

an error of law in granting Co-

See Feingold                                                                 ef,

and the trial court properly dismissed the complaint.

      Order affirmed.




                                     - 35 -
J-A04026-14




Judgment Entered.




Joseph D. Seletyn, Esq.
Prothonotary



Date: 9/23/2014




                          - 36 -
