AEP Energy, Inc. f/k/a Bluestar Energy Services, Inc. v. Hometown Family Restaurant No. 2015-00365

Civil Action-Law-Motion for Judgment on the Pleadings-Contract-Automatic Renewal Notice-Receipt-Modification-Conduct

The parties executed an electric service agreement on January 2, 2012 in which the agreement permitted Plaintiff to provide a renewal notice of that agreement within thirty (30) calendar days of the expiration date and required Defendant to reject in writing the renewal within five (5) business days of the renewal notice. Plaintiff filed a Complaint against Defendant for breach of that agreement when Defendant terminated the agreement after failing to provide in writing rejection of the renewal notice issued by the Plaintiff and continuing to use Plaintiff’s services thereafter. After lodging an Answer in which Defendant denied that it received the renewal notice and that proposed renewal was rejected verbally by its authorized representative during a telephone conversation, Plaintiff filed a Motion for Judgment on the Pleadings.

1. Pa.R.C.P. Rule 1034 provides that after the relevant pleadings are closed but within such time as not to unreasonably delay trial, any party may move for judgment on the pleadings.

2. In considering a motion for judgment on the pleadings, the court must confine its consideration to the pleadings filed, accepting as true all well pled statements of fact, admissions and any documents properly attached to the pleadings presented by the nonmoving party. A motion for judgment on the pleadings should be granted only where the pleadings demonstrate that no genuine issue of fact exists and the moving party is entitled to judgment as a matter of law.

3. In light of the fact that the documents attached to Plaintiff’s Complaint are inconclusive as to whether Defendant actually received the renewal notice because there is no indication of the identity of the individual to whom delivery was made or the address or location of the purported delivery, this issue remains a question of fact for trial.

4. An agreement that prohibits verbal modification of the agreement may be modified by subsequent verbal agreement if the parties’ conduct shows the intent to waive such a requirement. The question of whether an oral modification of an agreement occurred is for the trier of fact.

5. Since Defendant alleges in its Answer to the Complaint that the part of the agreement that requires that it may be amended only by written instrument signed by both parties was modified by the parties’ conduct such that it was not required to reject any renewal notice in writing, material issues of fact exist as to whether an oral modification of the agreement occurred.

PENNSYLVANIA

CIVIL DIVISION NO. 2015-00365

AEP ENERGY, INC. f/k/a BLUESTAR ENERGY SERVICES, INC.

v.

HOMETOWN FAMILY RESTAURANT

APPEARANCES:

ADAM VENTURA, ESQUIRE FOR AEP ENERGY, INC. f/k/a

BLUESTAR ENERGY SERVICES, INC.

JENNIFER MERX, ESQUIRE FOR HOMETOWN FAMILY RESTAURANT

ORDER OF COURT

AND NOW, this 20^th day of April, 2016, upon consideration of Plaintiff’s Motion for Judgment on the Pleadings, the Briefs submitted by the parties, and Oral Argument, it is hereby Ordered that said Motion is DENIED.

BY THE COURT:

JOHN C. TYLWALK, P.J.

OPINION, TYLWALK, P.J., APRIL 20, 2016.

Before us is Plaintiff’s Motion for Judgment on the Pleadings. The Complaint alleges that the parties entered an Electric Service Agreement (“ES Agreement”) which was signed by Defendant’s representative on January 5, 2012. Paragraph IV of the ES Agreement provided, in part, that “[n]ot less than thirty (30) calendar days prior to the anticipated expiration date of the then current relevant term, AEP may provide a Renewal Notice electronically or otherwise in writing containing proposed terms and conditions. Customer’s failure to reject any Renewal Notice in writing within five (5) business days shall result in such Renewal Notice being deemed to have been irrevocably and unconditionally agreed to by Customer.” (Exhibit “A” to Complaint)

Plaintiff alleges that on May 7, 2013, it sent Defendant a written Renewal Notice with an anticipated start date of July 16, 2013 and a renewal term of 24 months, via certified mail – return receipt requested. Plaintiff alleges that Defendant failed to reject the renewal and continued to use Plaintiff’s services, making monthly payments through January 6, 2014. It is alleged that Defendant thereafter terminated the renewed ES Agreement prior to the expiration of its term, thereby incurring early termination fees. On February 25, 2015, Plaintiff filed a Complaint for Arbitration asserting breach of contract, evidence of indebtedness, unjust enrichment, and account stated, seeking $8,462.28 exclusive of costs of collection, attorney’s fees and costs.

Defendant failed to respond to the Complaint and Plaintiff filed a ten-day notice of intent to take default judgment on April 1, 2015. Defendant then filed an Answer and New Matter on April 13, 2015. In its Answer and New Matter, Defendant admits that the initial ES Agreement was signed on January 5, 2012 by its principal, Douglas K. Horst. However, it denies that it ever received the Renewal Notice and contends that the proposed renewal was rejected verbally during a telephone conversation with Kevin McNeil, Plaintiff’s authorized representative. It further claims that it has made full payment for all energy services it received and that the only items for which payment was not made are the early termination and late fees which it does not owe. After the pleadings were closed, Plaintiff filed this Motion.

In New Matter, Defendant raises the affirmative defense of lack of consideration. In its Motion, Plaintiff argues that because Defendant admitted that Defendant’s principal signed the contract and that the contract speaks for itself, it has admitted the validity and enforceability of the ES Agreement and negated its assertion of its affirmative defense. Plaintiff claims that its Excel Spreadsheet states the amount owed by Defendant and shows that Defendant breached the contract by its failure to pay that amount. Defendant counters that the requirements of the ES Agreement were modified verbally by the parties, that it verbally rejected the proposed renewal, and that it has no further obligation to Plaintiff.

Pa.R.C.P. No. 1034 provides, in part, that “after relevant pleadings are closed, but within such time as not to unreasonably delay the trial, any party may move for judgment on the pleadings.” Pa.R.C.P. No. 1034. Upon consideration of a motion for judgment on the pleadings, a court must confine its consideration to the pleadings as filed, accepting as true all well plead statements of fact, admissions and any documents properly attached to the pleadings presented by the non-moving party. North Sewickley Township v. LaValle, 786 A.2d 325 (Pa. Commw. 2001). A motion for judgment on the pleadings should be granted when the moving party’s right to succeed is certain and the case is so free from doubt that trial would be a fruitless exercise. Id. A motion for judgment on the pleadings should be granted only where the pleadings demonstrate that no genuine issue of fact exists, and the moving party is entitled to judgment as a matter of law.  Swartz v. Swartz, 689 A.2d 302 (Pa. Super. 1997).

Because we find the existence of material facts which are germane to the resolution of this matter, we will deny Plaintiff’s Motion.

Defendant denies that it ever received the written Renewal Notice allegedly mailed by Plaintiff. Attached to the Complaint is a copy of return receipt card, signed by “Douglas Horst” and dated “June 9, 2014.” (Exhibit “F” to Complaint.) At Oral Argument, Plaintiff’s counsel appeared to indicate that this receipt was for the mailing of the renewal notice. However, based on the relevant dates, this could not be the case. Also attached as Exhibit “B” is a postal receipt for an item allegedly mailed by Plaintiff on May 10, 2013 and a United States Postal Service tracking document which indicates that the item was delivered on May 13, 2013 “in Palmyra, PA 17078.” (Exhibit “B” to Complaint) We believe that these two items are related to the Renewal Notice which was allegedly mailed on May 7, 2013. The documents in Exhibit “B” are inconclusive as to whether Defendant ever actually received the Renewal Notice as there is no indication of the identity of the individual to whom delivery was made or the address or location in Palmyra of the purported delivery. Thus, this issue remains a question of fact for resolution at trial.

Paragraph XVII of the contract does provide that it “may only be amended by a written instrument executed by both parties.” (Exhibit “A” to Complaint) However, an agreement that prohibits verbal modifications may be modified by subsequent verbal agreement if the parties’ conduct shows the intent to waive the requirement. Accu-Weather, Inc. v. Prospect Communications, Inc., 644 A.2d 1251, 1255 (Pa. Super. 1994). The question of whether there was an oral modification to an agreement is for the trier of fact. ADP, Inc. v. Morrow Motors, Inc., 969 A.2d 1244, 1251 (Pa. Super. 2009).

Defendant argues that the requirements of the ES Agreement were modified by the parties’ conduct and that it was not obligated to reject the Renewal Notice in writing. It claims that it did not receive the written Renewal Notice and that it did reject the proposed renewal orally during the telephone conversation with Plaintiff’s representative. Defendant contends that Plaintiff acknowledged Defendant’s rejection when it ceased billing Defendant for electric services as of November 15, 2013.

Defendant further claims that Plaintiff waived the requirement of a written rejection. It argues that Plaintiff is barred from recovery by the doctrine of equitable estoppel because Plaintiff did not insist on a written rejection during that telephone conversation and Defendant relied on Plaintiff’s representations that the verbal refusal was sufficient refusal and a modification to the agreement.

These matters also present material questions of fact which cannot be resolved on this Motion and must be left for resolution by the trier of fact. For these reasons, we deny Plaintiff’s Motion for Judgment on the Pleadings and will enter an appropriate Order.

1) The Complaint alleges that the initial period was to be 24 months beginning July 16, 2013; however, Exhibit “A” to the Complaint indicates that the start date was to be February 10, 2012.

2) Paragraph 19 of the Complaint indicates that this return receipt card pertains to Plaintiff’s mailing of a demand letter to Defendant on May 28, 2014.

3) Exhibit “F” indicates that this postal receipt was related to a demand letter dated May 28, 2014 which had been mailed to Horst.

4) Plaintiff does not attach any return receipt card related to this mailing.