text:
    617 A.2d 1330
    Peter B. SUNDLUN v. Bruce G. SHOEMAKER, Appellant.
    Superior Court of Pennsylvania.
    Argued Aug. 25, 1992.
    Filed Dec. 29, 1992.

      Sharon T. Pine, Lancaster, for appellant.
    Mark E. Lovett, Lancaster, for appellee.
    Before BECK, JOHNSON and HOFFMAN, JJ.
   BECK, Judge:

The issue is whether in interpreting a contract under the Uniform Commercial Code the trial judge properly admitted parol evidence to explain the terms of the contract. We find the judge properly admitted the parol evidence and affirm the order of the trial court.

This is an appeal from an order of the trial court denying a motion for judgment n.o.v. or a new trial. Appellant Bruce G. Shoemaker contends that the trial court erred in admitting parol evidence of additional terms to supplement or explain terms of a written contract, and that the jury’s verdict in favor of appellee Peter B. Sundlun was against the weight of the evidence.

Shoemaker is an antiques dealer and Sundlun was an antiques broker. Sundlun became interested in purchasing a rare “Thomas Mendenhall Cherry Tall Case Clock, Circa 1774” which was owned by Shoemaker. The parties discussed the clock on several occasions, disassembling it and examining its condition, and Shoemaker represented to Sundlun that, inter alia, the feet on the clock case were original. Sundlun agreed to purchase the clock for $97,500.

On March 9, 1988, the parties entered into a written agreement for the sale of the clock, which provided, in pertinent part:

ij: # #
2. Seller [Shoemaker] represents and warrants the authenticity of the Clock through the description/authority of Lancaster Clocks prepared by Stacy B.C. Wood, Jr., attached hereto as Exhibit B and made a part hereof.
3. Seller herein personally guarantees the authenticity of the Clock and if it is determined that the Clock is not as described, Seller shall purchase back from Buyer [Sundlun] the Clock for the purchase price plus interest of Six Percent (6%) computed from the date of purchase until March 1, 1991. The obligation of Seller to repurchase Clock shall automatically terminate the earlier of (1) March 1, 1991; or (2) the sale of the Clock by Buyer by [sic] a third party.

(Emphasis added). Attached to the written contract was a six page report by a research horologist, which described the clock and certified that it was “made in the period 1773-1774.” The only statement about the clock’s feet included in this report was that “Ogee feet carry the case.”

Shortly after the sale of the clock it was discovered that the clock’s feet were not original. Both parties acknowledged that this fact substantially impaired the value of the clock. After attempting to resell the clock at various prices, Sundlun requested that Shoemaker buy back the clock in accordance with paragraph 3 of the written agreement. Sundlun’s position was that the clock was “not as described” by the Wood report and the oral representations made by Shoemaker.

Shoemaker refused to repurchase the clock. He contends that the written agreement warranted only that the clock was “as described” in the Wood report, and that the replacement of the clock’s feet did not affect the clock’s “authenticity” as described in that report. Shoemaker argued that his own representation that the feet were original was not part of the “description” warranted by paragraphs 2 and 3 of the written agreement.

Sundlun then sold the clock at Christie’s Auction in New York for $22,000, in order to mitigate his damages. Sundlun commenced this action against Shoemaker alleging breach of contract and breach of warranty. After trial, a jury returned a verdict in favor of Sundlun in the amount of $75,500, the difference between the clock’s purchase price and its sale price at auction. Shoemaker filed a motion for judgment n.o.v. or, in the alternative, a new trial, which motion was denied. This timely appeal followed.

Shoemaker raises the following issues:
1. Did the lower court err in admitting parol evidence consisting of oral statements of the parties to the contract which contradicted, rather than explained, the contract phrases “authenticity” and “as described”?
2. Was the jury’s verdict against the weight of the evidence with regard to the commercially unreasonable manner in which Buyer resold the subject of the contract, an antique clock?
3. Was the jury’s verdict against the weight of the evidence with regard to Buyer’s untimely revocation of the contract?
4. Was the jury’s verdict against the weight of the evidence with regard to the expiration of any contractual warranties upon the resale of the subject of the contract, an antique clock, to a partnership consisting of Buyer and his father?
5. Was the jury’s verdict against the weight of the evidence with regard to the absence of a breach of contract?
6. Was the jury’s verdict against the weight of the evidence with regard to the absence of a breach of express warranty?

Brief of Appellant at 2.

We may not reverse an order denying a motion for a new trial unless the trial court clearly and palpably abused its discretion or committed an error of law that controlled the outcome of the case. See Thompson v. City of Philadelphia, 507 Pa. 592, 493 A.2d 669 (1985); Gray v. H.C. Duke and Sons, Inc., 387 Pa.Super. 95, 563 A.2d 1201 (1989). Judgment n.o.v. is proper only in a clear case where, viewing the evidence in the light most favorable to the verdict winner, and granting the verdict winner every reasonable favorable inference, there is insufficient evidence to sustain the verdict. See Stewart v. Chernicky, 439 Pa. 43, 266 A.2d 259 (1970); Ingrassia Construction Co. v. Walsh, 337 Pa.Super. 58, 486 A.2d 478 (1984). Because we find that the trial court did not err in denying Shoemaker’s motion for post-trial relief, we affirm.

We first address Shoemaker’s argument that the trial court erred in admitting parol evidence of oral representations Shoemaker made about the condition of the clock’s feet. The admission or exclusion of evidence is within the sound discretion of the trial court and will not be reversed on appeal absent a clear abuse of discretion. McCrery v. Scioli, 336 Pa.Super. 455, 485 A.2d 1170 (1984). We find no such abuse of discretion in the trial court’s admission of Shoemaker’s statements about the clock’s condition.

Shoemaker concedes that he told Sundlun that the feet were original and not replacements. N.T. 6/5/91 at 361-62. However, he claims that the admission of these statements improperly modified the “unambiguous language of the complete and integrated written contract,” in violation of the parol evidence rule. We agree with the trial court that these oral representations simply were consistent additional terms which did not contradict but rather explained the meaning of terms in paragraphs 2 and 3 of the written agreement, and thus supplemented it, in accordance with the applicable law.

This sales transaction occurred in a commercial context, and is governed in Pennsylvania by the Uniform Commercial Code (“UCC”). 13 Pa.C.S.A. § 1101 et seg. Specifically, the Pennsylvania UCC includes a parol evidence rule which provides as follows:

§ 2202. Final written expression: parol or extrinsic evidence
Terms with respect to which the confirmatory memoranda of the parties agree or which are otherwise set forth in a writing intended by the parties as a final expression of their agreement with respect to such terms as are included therein may not be contradicted by evidence of any prior agreement or of a contemporaneous oral agreement but may be explained or supplemented:
(1) by course of dealing or usage of trade (section 1205) or by course of performance (section 2208); and
(2) by evidence of consistent additional terms unless the court finds the writing to have been intended also as a complete and exclusive statement of the terms of the agreement.

13 Pa.C.S.A. § 2202 (Purdons 1984) (Emphasis added).

In this case, the parties have put forth different interpretations of the term “as described” in paragraph 3 of the written contract. Shoemaker argues that the phrase refers only to the description included in the Wood report appended to the contract. He asserts that his own statements about the original condition of the clock feet were not intended to be part of the description guaranteed by the written agreement, and that their substance contradicts the plain language of the contract in violation of the common law and UCC parol evidence rules. We disagree.

Under the UCC parol evidence rule, which governs this transaction, the oral statements about the clock feet were properly admitted as “consistent additional terms” which explained and supplemented the term “as described.” 13 Pa. C.S.A. § 2202(2). Moreover, nothing in.the parties’ written agreement supports the contention that it was intended as a “complete and exclusive statement of the terms of the agreement.” It did not contain an integration clause that would have made such an intention manifest.

As discussed in the Official Comment to Section 2202, the UCC’s parol evidence rule allows the fact finder to consider: 1) that a writing which is final on some matters may not include all the matters agreed upon; 2) that the language used in a written agreement has the meaning which arises out of the commercial context in which it was used; and 3) that parol evidence may be admitted even if there has been no determination by the court that the written contract language is ambiguous. See 13 Pa.C.S.A. § 2202, Comment l(a)-(c). See also Campbell v. Hostetter Farms, Inc., 251 Pa.Super. 232, 380 A.2d 463 (1977) (finding that contract language is ambiguous is not prerequisite to admission of parol evidence, nor is it required that the court, rather than the jury, determine the effect of parol evidence on meaning of the contract).

In other words, the UCC rule allows the jury to take into account consistent parol evidence when it attempts to discern the meaning of a written contract. In this instance, the oral statements were made by Shoemaker in the course of dealing. Unless carefully negated by the written terms of the contract, the parties’ course of dealing, including any consistent oral representations, become an element of the meaning of the words used. 13 Pa.C.S.A. § 2202, Comment 2. If Shoemaker meant to limit his personal guarantee in paragraph 3 of the written agreement to the contents of the Wood report, he could have made this intention clear by simply changing the language to read “as described in the Wood report attached hereto.” Because Shoemaker’s representations about the clock feet did not contradict the express written terms of the agreement, they were properly admitted to explain or supplement that agreement.

Shoemaker’s claims that the jury’s verdict was against the weight of the evidence are also meritless. Essentially, he asks us to review various factual findings made at trial, and reevaluate the evidence presented. However, a jury verdict will not be set aside in the absence of a clear error of law or palpable abuse of discretion. Deitrick v. Karnes, 329 Pa.Super. 372, 478 A.2d 835 (1984). A reviewing court “may not reweigh evidence, and a new trial may not be granted merely because the jury could have drawn different conclusions or inferences.... ” In re Condemnation by Com., Dept. of Transportation, 90 Pa.Cmmwlth 39, 42, 493 A.2d 797, 799 (1985), quoting Hilliard v. Anderson, 440 Pa. 625, 271 A.2d 227 (1970). Shoemaker’s complaint is that the jury did not believe his evidence, and instead credited the evidence presented by Sundlun. Credibility is for the jury. After a thorough review of the record, we agree with the trial court’s conclusion that the evidence presented in this case was sufficient to support the jury’s verdict.

Order affirmed.

      . Shoemaker's expert witness Stacy Wood testified that "Ogee is from a French word.... which is an S-shaped curve.” N.T. 6/4/91 at 227.

      . The trial court denied Shoemaker's pre-trial motion in limine to exclude the parol evidence.

      . The expressed purposes of the Pennsylvania UCC are to: 1) simplify, clarify and modernize the law governing commercial transactions; 2) permit the continued expansion of commercial practices through custom, usage and agreement of the parties; and 3) make uniform the law among the various jurisdictions. 13 Pa.C.S.A. § 1102(b).

      . It is undisputed that Shoemaker had the opportunity to and in fact did make changes to the contract as originally drafted by Sundlun's attorney, including changes in the terms of the “buy back” provision relating to the applicable interest rate and the duration of the guarantee.


source: Caselaw Access Project

author: POPOVICH, Judge:

license: Public Domain

text:
    617 A.2d 1335
    Steven L. BURKE, Appellant, v. VALLEY LINES, INC. and Carolyn R. Bowser, Appellees.
    Superior Court of Pennsylvania.
    Argued Sept. 29, 1992.
    Filed Dec. 29, 1992.

      Patrick J. Demay, Bethel Park, for appellant.
    John W. Jordan, IV, Pittsburgh, for appellees.
    Before ROWLEY, President Judge, and POPOVICH and CERCONE, JJ.
   POPOVICH, Judge:

This is an appeal from the order of the Court of Common Pleas of Armstrong County which granted appellees’ motion for post-trial relief. Herein, we are presented with a question of first impression: Whether an injured motorist is required to obtain the full policy limit under his own uninsured motorist coverage before he may collect a judgment from a tortfeasor who is covered by the Pennsylvania Insurance Guaranty Association Act?

Our answer is that, as a general rule, an injured person may not settle with his uninsured motorist carrier for less than the policy limits and then expect to recover any monies from Pennsylvania Insurance Guaranty Association (“PIGA”) or its insured. Since that is precisely the holding below, we affirm.

The record reveals the following: Appellant’s personal injury suit stemmed from an automobile accident which he had with Carolyn Bowser while she was driving a school bus for her employer, Valley Lines, Inc. At the time of the accident, appellees, Ms. Bowser and Valley Lines, were insured by Transit Casualty Insurance Company. Since Transit Casualty was declared insolvent, defense of this claim was assumed by PIGA.

Due to the fact that appellees’ insurance carrier was insolvent, appellant filed an uninsured motorist claim with his insurance company. At the time of the accident, appellant was an insured under three separate policies of automobile insurance, covering four vehicles, issued by Nationwide Mutual Insurance Company. The “stacked” uninsured motorist coverage was $200,000. On November 6, 1987, appellant settled his uninsured motorist claim with Nationwide for the sum of $85,000.00.

Prior to trial, appellees filed a motion for summary judgment, contending that appellant could not recover any damages due to his failure to “exhaust” his rights under his uninsured motorist policies. Citing- the Pennsylvania Insurance Guaranty Association Act, 40 P.S. § 1701.503, appellees argued that by settling his uninsured motorist claim for less than the policy limits, appellant failed to exhaust his rights under that policy and therefore was not entitled to recover further. The lower court disagreed on the basis of Bethea v. Forbes, 519 Pa. 422, 548 A.2d 1215 (1988), and held that appellant’s suit was not barred by his settlement with Nationwide.

On September 12, 1990, the jury determined that appellant was entitled to damages in the amount of $400,-000.00, but also found that appellant was 50% negligent. Thus, appellant was entitled to a molded verdict in the amount of $200,000.00. Appellees filed post-verdict motions wherein they raised an argument which was similar to that raised in their motion for summary judgment, i.e., appellant was not entitled to recover from them since he settled his uninsured claim for less than the policy limits and the molded damages were less than PIGA’s liability limit. Armed with the knowledge that the molded verdict was less that the statutory liability cap of $300,000.00, 40 Pa.S.A. § 1701.201, and that appellant had settled his uninsured claim for less than his policy limits, the lower court agreed with appellees and entered judgment in favor of appellees. This appeal followed.

Our Supreme Court, in Bethea v. Forbes, 519 Pa. 422, 548 A.2d 1215 (1988), faced an identical situation to that presented to the court below at the point when appellees filed their motion for summary judgment. In Bethea, supra, the tortfeasor’s insurer was insolvent, and the plaintiffs settled their uninsured motorist claims for less than the available policy limits. PIGA had assumed the defense and filed a motion for summary judgment, wherein PIGA, citing 40 Pa.S.A. § 1701.-503(a), argued that the plaintiffs’ failure to exhaust their rights under their uninsured motorist policy precluded recovery against the tortfeasor. The trial court agreed and entered summary judgment in the tortfeasor’s favor. This court affirmed that decision.

However, the Supreme Court reversed, stating:

It is axiomatic that, in a common law tort action, the tortfeasor is liable for all injury caused by his negligence or other lawful conduct. E.g., Pavorsky v. Engels, 410 Pa. 100, 188 A.2d 731 (1963); Menarde v. Philadelphia Transportation Co., 376 Pa. 497, 103 A.2d 681 (1954); Offensend v. Atlantic Refining Co., 322 Pa. 399, 185 A. 745 (1936). It is also a fundamental and general principle that a plaintiff in such action is entitled to compensation from the tortfeasor to the full extent of the injury sustained. E.g., Incollingo v. Ewing, 444 Pa. 299, 307, 282 A.2d 206, 228 (1971); Corcoran v. McNeal, 400 Pa. 14, 161 A.2d 367 (1960). It is clearly within the realm of possibility that Mr. Forbes, the alleged tortfeasor in the instant matter, injured the plaintiffs to an extent that exceeded the uninsured motorist coverage in the GEICO policy. Therefore, plaintiffs’ settlement under that policy cannot deprive them from the legal right to seek full compensation from the tortfeasor, even if the effort presents little or no prospect for satisfaction.
* # ífí ijs * *
In view of what we have said, the trial court’s order dismissing the plaintiffs’ tort action was palpably erroneous. [PIGA]’s role in the case was strictly in terms of defending the alleged tortfeasor with respect to the claims against him; it was not defendant against a claim under the Insurance Guaranty Act.

Bethea, 548 A.2d at 1217. (Footnote omitted. Emphasis added.)

Thus, it is clear that the lower court properly permitted the appellant to proceed with his tort action against appellees, despite the fact appellant settled with his uninsured carrier for $85,000.00, far less than his aggregate policy limit of $200,-000.00.

However, the fact that appellant was properly permitted to proceed to trial against appellees does not also mean that appellant can recover the entire jury award from PIGA or appellees. The Pennsylvania Insurance Guarantee Act, 40 Pa.S.A. § 1701.503(a), provides:

(a) Any person having a claim against an insurer under any provision in an insurance policy other than a policy of an insolvent insurer which is also a covered claim, shall first be required to exhaust his right under such policy. Any amount payable on a covered claim under this act shall be reduced by the amount of any recovery under such insurance policy. (Emphasis added).

Although no Pennsylvania Court has directly defined what it means to “exhaust” one’s rights under an uninsured motorist policy when the primary insurer is insolvent and PIGA takes over the tortfeasor’s defense, we do have some guidance from Justice Zappala of the Pennsylvania Supreme Court. In his Concurring Opinion in Bethea, 548 A.2d at 1218, Justice Zappala stated: “I would hold that the settlement of the uninsured motorist claim for less than the limits of coverage is a failure to exhaust the claimants’ rights under the policy which precludes recovery under the [Pennsylvania Insurance Guaranty Association] Act.” In so opining, Justice Zappala relied, in part, upon the decision of the Washington Court in Prutzman v. Armstrong, 90 Wash.2d. 118, 579 P.2d 359 (1978). In Prutzman, supra, the Washington Court was presented with facts very similar to those sub judice and was asked to interpret an analogous provision of the Washington Insurance Guaranty Association Act. Therein, the Washington Court stated:

This exhaustion provision is apparently designed to limit WIGA liability to situations in which no other source of recovery for damages exists.... Her settlement for less than the $15,000 policy limit is inadequate to constitute exhaustion under the statute. Any other interpretation would furnish no incentive for plaintiffs to seek an adequate settlement from their own insurer because they could always force the WIGA to pay the difference between the settlement and the actual value of their claim.

Prutzman, 579 P.2d at 362. See also, Spearman v. State Sec. Ins. Co., 57 Ill.App.3d 393, 14 Ill.Dec. 729, 372 N.E.2d 1008 (1978) (mere filing of uninsured motorist claim followed by carrier’s disclaimer of coverage does not amount to “exhaustion”; the claim must proceed to arbitration); Henninger v. Riley, 317 Pa.Super. 570, 464 A.2d 469 (1983) (claimant may not proceed against PIGA until the claimant has complied with § 1701.503(a) by exhausting his claims against other solvent insurers).

Today, we explicitly rule that settlement of an uninsured motorist claim for less than the limits of coverage is a failure to exhaust the claimant’s rights under the policy which precludes recovery pursuant to the Pennsylvania Insurance Guaranty Association Act. 40 Pa.S.A. § 1701.101 et seq. The purpose of PIGA is to provide a measure of protection to policyholders and claimants who are faced with financial loss because of the insolvency of an insurance carrier. 40 Pa.S.A. § 1701.102; Bethea, 548 A.2d at 1216. PIGA exists for those claimants of insolvent insurers who have no other source of insurance from which to recover their losses. PIGA was not designed to provide claimants with an alternative source of recovery equal to the insolvent insurer’s coverage limits (or PIGA’s liability cap) less whatever amount the claimant may have unilaterally agreed to accept in settlement of his claims under other insurance policies. See, Concurring Opinion by Zappala, J., Bethea, 548 A.2d at 1218; Prutzman, 579 P.2d at 362. Rather, PIGA was designed to provide claimants with a recovery equal to the insolvent insurer’s policy limits (or PIGA’s liability cap) less whatever amount the claimant may have recovered by exhausting his rights under any other policy of insurance. E.g., Blackwell, supra (uninsured motorists benefits collected are subtracted from the statutory maximum recoverable from PIGA); McMahon v. Caravan Refrigerated Cargo, 406 Pa.Super. 303, 594 A.2d 349 (1991) (trial court properly subtracted claimant’s uninsured motorist recovery from PIGA’s statutory cap).

To rule otherwise would invite collusion between a claimant and his uninsured motorist carrier. They could agree to settle for less than the claimant’s actual damages, knowing that PIGA was responsible for the remainder. We must remember that PIGA was enacted to assume the responsibilities of insolvent insurers, not solvent insurance carriers. See, Concurring Opinion by Zappala, J., Bethea, 548 A.2d at 1218-1219.

Since appellant settled his uninsured motorist claim for less that his policy limits of $200,000.00, appellant has not exhausted his rights under that policy and, therefore, may not recover from PIGA. 40 Pa.S.A. § 1701.503(a). Having determined that appellant may not recover against PIGA, we must next face the question of whether appellant is also barred from recovering his $200,000.00 damage award from appellees. Given PIGA’s release from all financial responsibility as a direct result of appellant’s failure to exhaust his uninsured policy rights, we hold that appellant is likewise barred from recovering from appellees. Any other holding would render the “exhaustion” provision of the Insurance Guaranty Act meaningless. See, White v. Accardo, 15 D. & C.3d 609, 617 (1980).

If appellees were now personally responsible for appellant’s damages award, they would be without any source of insurance protection to bridge the gap between appellant’s uninsured motorist settlement of $85,000.00 and the $200,000.00 award. 40 Pa.S.A. § 2000(d) (uninsured carrier has no right of reimbursement directly from the insured of an insolvent carrier). To expose appellees to such a financial loss (which is a direct result of appellant’s failure to exhaust his rights under his uninsured motorist policy) would violate the very purpose of PIGA—“to avoid financial loss to ... policyholders as a result of the insolvency of an insurer ...”. 40 Pa.S.A. § 1701.-102(1). Protection of appellees from financial loss can only be accomplished by barring appellant’s right of recovery against them. In so ruling, we emphasize that it was appellant’s own decision to settle his uninsured claim for less than the policy limits which coincidentally would have fully covered his damages.

In sum, we explicitly hold that a claimant’s settlement of his uninsured motorist claim for less than the policy limits is a failure to exhaust his rights under that policy, thus, barring recovery of a claim from the Pennsylvania Insurance Guaranty Association or the tortfeasor to the extent that the claim is less that PIGA’s statutory liability cap. Since appellant failed to exhaust his rights under his uninsured policy, he is barred from collecting any of his $200,000.00 jury award from either PIGA or appellees. Accordingly, we affirm the decision of the court below.

Judgment affirmed.

      . In so far as the Insurance Guarantee Association Act is a uniform law promulgated by the National Association of Insurance Commissioners and is adopted by most states, the judicial construction given to such legislation by the courts of our sister states may be considered when interpreting the act. 1 Pa.C.S.A. § 1927.

      . Although Henninger, supra, addresses a similar issue to that raised herein, it does not directly address the question of whether settlement of an uninsured motorist claim for less than the policy limits constitutes “exhaustion” of one’s rights under that policy. Rather, Henninger, supra, involves a situation where the plaintiff failed to make any claim against his uninsured carrier prior to filing suit against the tortfeasor who was defended by PIGA. This Court held that the plaintiff therein was subject to the exhaustion requirement of 40 Pa.S.A. § 1701.503, but failed to enforce their uninsured claim, thus, barring recovery from PIGA. Henninger, 464 A.2d at 473.

      . Even with the existence of PIGA, the Legislature anticipated that some claimants and insureds would suffer some amount of financial loss due to the insolvency of an insurer, because PIGA’s obligation is limited to $300,000.00 less the $100.00 deductible. 40 Pa.S.A. § 1701.-201(b)(1)®. Blackwell v. PIGA, 390 Pa.Super. 31, 36, 567 A.2d 1103, 1106 (1989).

      . In neither Blackwell, supra, nor McMahon, supra, was the question of "exhaustion” addressed, since in both those cases the claimant had already recovered the policy limits of their uninsured motorist coverage before making a claim against PIGA.

      . Although instantly appellant's damages were less than PIGA’s statutory limit of liability, we note that if his damage award had been in excess of the $300,000.00 cap, then he could have collected directly from appellees the amount which exceeded the statutory cap. Such a ruling would promote the common law rule that the tortfeasor is liable for the full extent of damage caused by his negligence, while at the same time insuring that the public policy underlying PIGA is enforced.