J-A12008-19

                               2019 PA Super 259



SLT HOLDINGS, LLC, JACK E.                         IN THE SUPERIOR COURT
MCLAUGHLIN AND ZUREYA A.                                     OF
MCLAUGHLIN,                                             PENNSYLVANIA

                           Appellees

                      v.

MITCH-WELL ENERGY, INC. AND
WILLIAM E. MITCHELL, JR., AN
INDIVIDUAL,

                           Appellants                No. 1322 WDA 2018


                  Appeal from the Order Dated August 8, 2018
                In the Court of Common Pleas of Warren County
                    Civil Division at No(s): A.D. 626 of 2013

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

OPINION BY BENDER, P.J.E.:                          FILED AUGUST 23, 2019

        Mitch-Well Energy, Inc. (“Mitch-Well”) and William E. Mitchell, Jr., an

individual (“Mr. Mitchell”) (collectively “Appellants”) appeal from the August

8, 2018 order, which granted the petition for attorneys’ fees and costs filed

by SLT Holdings, LLC (“SLT”), Jack E. McLaughlin and Zureya A. McLaughlin

(“the    McLaughlins”) (collectively “Appellees”), and awarded Appellees
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reasonable attorneys’ fees and costs in the amount of $8,383.40.1,       2   We

affirm.

       This matter stems from a dispute over two oil, gas, and mineral (“OGM”)

leases regarding two parcels located in Warren County. The underlying action

was commenced on November 19, 2013, with Appellees’ filing of a complaint

in equity against Appellants.        Summary judgment was granted in favor of

Appellees on January 8, 2018. Pending the decision on its motion for summary

judgment, Appellees filed a motion for sanctions against Appellants, seeking

recovery under Pa.R.C.P. 4019(d) for fees and costs incurred as a result of

Appellants’ failure to respond truthfully to Appellees’ request for admissions.

On November 29, 2017, the trial court heard argument on both the summary

judgment motion and the motion for sanctions. The court deferred ruling on

the motion for sanctions until after the issuance of its opinion regarding

summary judgment. Summary judgment was entered in favor of Appellees

on January 9, 2018.

              By order of January 10, 2018, the court granted [Appellees’]
       motion for sanctions and gave them twenty days to file their
       petition for attorneys’ fees and costs. The motion for sanctions
       concerned a request for admissions that [Appellees] had served
____________________________________________


1 Appellants filed a separate appeal challenging the trial court’s granting of
summary judgment in favor of Appellees, which is currently pending before
this Court at docket no. 542 WDA 2018.

2 An order granting sanctions under Pa.R.C.P. 4019(d) is final and appealable.
See Christian v. Pennsylania Financial Responsibility Assigned Claims
Plan, 686 A.2d 1, 4 (Pa. Super. 1996) (noting that the finality of the order is
determined not by the entry of judgment in the underlying action, but by the
language and requirements of Rule 4019(d)); see also Pa.R.C.P. 4019(d).

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     on [Appellants].     [Appellants] denied every request for an
     admission. The most important facts that [Appellants] denied
     were that they made no payments to [Appellees] for
     approximately 13 years.        The leases … required minimum
     payments even if no oil or gas was produced. [Appellees] hoped
     that if [Appellants] admitted to not making payments, then
     [Appellees] could prove that they breached the lease agreements,
     and [Appellees] could move for summary judgment without ever
     having deposed [Mr. Mitchell]. [Appellees] represented that
     because [Appellants] denied all of the requests for admissions,
     [Appellees] had to take the deposition of [Mr. Mitchell]. During
     the deposition, [Mr. Mitchell] conceded the facts that [Appellees]
     had previously asked [Appellants] to admit. He also conceded
     that [Appellants] were in error when they denied the relevant
     requests for admissions.       It was [Appellees’] position that
     [Appellants’] wrongful denial of the requests for admissions forced
     [Appellees] to incur the costs of[] the deposition, the motion for
     sanctions, and the petition for attorneys’ fees and costs. Counsel
     for [Appellees] represented that he worked 27.7 hours on relevant
     tasks at the agreed-upon rate of $300 per hour. The total is
     $8,383.40. Of that amount, $73.40 is costs and the rest[] is
     attorney[s’] fees. Counsel included a table with individual line
     items in [Appellees’] petition. Attached to the petition are heavily
     redacted invoices and an affidavit signed by counsel.

           [Appellants] filed a response to the petition with several
     arguments, including one which duplicates matters raised in the
     instant appeal.      [Appellants] claimed that the Rule of Civil
     Procedure governing sanctions for denials of requests for
     admission that are subsequently proven true only allows sanctions
     after a trial or hearing. Pa.R.C.P. 4019(d)….

Trial Court Opinion (“TCO”), 11/5/18, at 2-3 (unnecessary capitalization

omitted).

     Following argument on Appellees’ petition for attorneys’ fees and costs,

the trial court issued an order on August 8, 2018, granting the petition and

awarding Appellees reasonable attorneys’ fees and costs in the amount of

$8,383.40. On August 27, 2018, Appellants filed a timely notice of appeal,

followed by a timely, court-ordered Pa.R.A.P. 1925(b) concise statement of

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errors complained of on appeal.      Herein, Appellants present the following

issues for our review:

      1. Did the [t]rial [c]ourt abuse its discretion in awarding counsel
         fees as a sanction for [Appellants’] denial of requests for
         admissions where SLT was granted summary judgment without
         trial?

      2. Did the [t]rial [c]ourt abuse its discretion when it awarded
         counsel fees as a sanction for the denial of requests for
         admissions as SLT was never required to prove the truth of the
         facts denied because of the entry of summary judgment in
         favor of SLT Holdings?

      3. Did the [t]rial [c]ourt err in failing to hold an evidentiary
         hearing for sanctions and attorney[s’] fees where the non[-
         ]moving party had filed a response to the petition for
         attorney[s’] fees and costs?

Appellants’ Brief at 4.

      “It is well-settled that the specific sanctions imposed under Pa.R.C.P.

4019 for violation of discovery rules are left to the sole discretion of the trial

court.”   Christian, 686 A.2d at 5 (citing Sun Pipe Line Co. v. Tri-State

Telecommunications, Inc., 655 A.2d 112, 122 (Pa. Super. 1995)).

Therefore, we apply an abuse of discretion standard when reviewing an order

granting or denying a motion for sanctions pursuant to Rule 4019(d). See id.

“An abuse of discretion is not merely an error of judgment.         It requires a

showing of manifest unreasonableness, partiality, ill-will, or such lack of

support as to be clearly erroneous. Under this standard, the party challenging

the trial court’s discretion on appeal bears a heavy burden.”       Id. (internal

citations omitted).




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J-A12008-19



      We begin with a review of relevant authority. Pennsylvania Rule of Civil

Procedure 4014 provides for discovery through a request for admissions. The

purpose of serving requests for admissions is “to clarify and simplify the issues

raised in prior pleadings in order to expedite the litigation process.”

Christian, 686 A.2d at 5 (citation omitted). Moreover, “Rule 4014 provides

that a party may deny a request for admission that the party considers a

genuine issue for trial. Pa.R.C.P. 4014(b). This denial, however, is subject to

the discovery sanctions of Rule 4019(d).” Id.

      Rule 4019 provides, in relevant part:

      (d) If at the trial or hearing, a party who has requested admissions
      as authorized by Rule 4014 proves the matter which the other
      party has failed to admit as requested, the court on motion may
      enter an order taxing as costs against the other party the
      reasonable expenses incurred in making such proof, including
      attorneys’ fees, unless the court finds that

            (1) the request was or could have been held objectionable
            pursuant to Rule 4014, or

            (2) the admission sought was of no substantial importance,
            or

            (3) the party failing to admit had reasonable ground to
            believe that he or she might prevail on the matter, or

            (4) there was other good reason for the failure to admit.

Pa.R.C.P. 4019(d).

      As noted by the trial court:

      [Appellants] specifically rely on the part of [Rule 4019(d)]
      concerning proof of the previously denied matter at trial or
      hearing…. [Appellants] also rely on the fact that this [c]ourt
      granted summary judgment….           Summary [j]udgment is
      appropriate when, inter alia, there is no genuine issue of any


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J-A12008-19


      material fact as to a necessary element of the cause of action or
      defense…. Pa.R.C.P. 1035.2(1). However, the party moving for
      summary judgment has the burden of proving the nonexistence
      of any genuine issue of fact, while the nonmoving party must
      demonstrate that there is a genuine issue for trial and may not
      rest on averments in its pleadings.           Merriweather v.
      Philadelphia Newspapers, Inc., 684 A.2d 137 (Pa. Super.
      1996).

TCO at 3.

      In their first two claims, Appellants aver that the trial court erred in

awarding attorneys’ fees and costs as a sanction for Appellants’ denial of

requests for admissions, where summary judgment was granted in favor of

Appellees, and maintain that because of the entry of summary judgment,

Appellees were never required to prove the truth of the facts denied by

Appellants. Appellants’ Brief at 9-15. Appellants argue that all of the requests

for admissions were properly denied in accordance with Rule 4014(b), and

acknowledge that a verification executed by Mr. Mitchell, president of Mitch-

Well, was attached to their response. Id. at 10. Appellants take the position

that they are “not required to admit to the requests for admissions. They can

deny them[,] which they did[,] and that is their right. The fact that [Appellees

were] not happy with the answers [or] did not agree with the answers[] is not

a basis for sanctions against [them]….” Id. at 11.

      Appellants’ argument regarding whether the granting of sanctions was

appropriate places an emphasis on the words “if at the trial or hearing … a

party … proves” contained in Rule 4019. Appellants assert that there was no

trial in this case, but rather an entry of summary judgment and, thus,



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J-A12008-19



Appellees were not forced to prove anything at trial. Id. at 11-12. Appellants

further contend that Appellees were not forced to take the deposition of Mr.

Mitchell as a result of its denial of the requests for admissions and that “the

request[s] for admissions were of no substantial importance” in this case. Id.

at 12, 14-15.

       In response to Appellants’ claims, the trial court opined:

              The facts that [Appellants] denied pursuant to [Appellees’]
       Request for Admissions were proven true at [Mr. Mitchell’s]
       deposition[,] by his admissions at that time. The [c]ourt relied on
       the deposition testimony, especially that concerning the lack of
       marketable production at the oil wells, when it entered summary
       judgment. Thus, the need for a trial or an evidentiary hearing
       before the [c]ourt was obviated. [Appellants] argue that a literal
       reading of Pa.R.C.P. 4019 … only allows for an award of
       attorney[s’] fees and costs whenever denials of requests [for]
       admissions are proven false at a trial or hearing. Preliminary [sic],
       it is the opinion of this [c]ourt that [Appellants’] argument is
       unreasonably sophist. However, even if the [c]ourt engages with
       [Appellants’] argument, the argument fails because [Appellees]
       did prove that the facts which were initially denied by [Appellants]
       were true for purposes of summary judgment. Had the [c]ourt
       not been convinced that there was no genuine issue as to whether
       there was marketable production at the well sites during the
       relevant timeframe, then [Appellees] would have likely failed to
       meet their burden of proof. Concerning [Appellants’] argument
       about the lack of a trial (or as Rule 4019 states “trial or hearing”),
       the [c]ourt notes that it did hear argument on [Appellees’] motion
       for partial summary judgment.[3] If [Appellants] take the position
       that the rule requires testimony before the [c]ourt, meaning
       before a judge and not just before a person authorized to
       administer oaths, then it is again the opinion of this [c]ourt that
       [Appellants’] reading of Rule 4019 is unreasonable because it
       defeats the overall meaning of the rule.
____________________________________________


3 We further note that immediately following the argument on summary
judgment, testimony was heard on the motion for sanctions. See N.T.
Hearing, 11/29/17, at 36-43.

                                           -7-
J-A12008-19



TCO at 4-5 (emphasis added and unnecessary capitalization omitted). Based

on the foregoing, we discern no abuse of discretion by the trial court.

      Lastly, Appellants assert that the trial court erred by failing to hold an

evidentiary hearing on the petition for attorneys’ fees and costs as sanctions.

Appellants’ Brief at 15. Appellants acknowledge that they are unable to cite

to any authority which mandates a hearing before awarding sanctions under

Rule 4019(d). Id. at 23-24. Nevertheless, they insist that because there was

no trial, sanctions under Rule 4019(d) are inappropriate. Id. at 16.

      In response to Appellants’ assertions, the trial court explained:

      [T]he record was sufficient for the [c]ourt to decide the issue after
      hearing argument [on the motion for sanctions]. There were no
      issues of facts concerning the initial denials of requests for
      admissions and subsequent recantation of those denials. The
      [c]ourt was able to read the recantations in the transcript of the
      sworn deposition testimony given by the individual [Appellant].
      Furthermore, when it came time for the [c]ourt to decide on the
      reasonableness of the fees and costs requested in [Appellees’]
      Petition for Attorneys’ Fees and Costs, the [c]ourt had the benefit
      of an itemized breakdown of the requested fees and also an
      [a]ffidavit from counsel for [Appellees].

TCO at 5. After careful review, we discern no abuse of discretion by the trial

court in granting Appellees’ petition for attorneys’ fees and costs. Moreover,

we deem the amount of attorneys’ fees and costs awarded to be reasonable

and adequately supported by the record.

      In light of the foregoing, the trial court’s August 8, 2018 order awarding

reasonable attorneys’ fees and costs in the amount of $8,383.40 to Appellees

is affirmed.



                                      -8-
J-A12008-19



     Order affirmed.

Judgment Entered.




Joseph D. Seletyn, Esq.
Prothonotary



Date: 8/23/2019




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