Semian, G. v. Kneph, LLC d/b/a Realty Network

Citation: Not availableDocket: 1692 MDA 2021

Court: Superior Court of Pennsylvania; September 14, 2022; Pennsylvania; State Appellate Court

Original Court Document: View Document

SummaryOriginalCytator Case TreatmentBackward CitatorAnalysis

EnglishEspañolSimplified EnglishEspañol Fácil

George Semian appeals a February 25, 2021 order from the Court of Common Pleas of Lackawanna County, which awarded damages of $130,306.51 to KNEPH, LLC, doing business as Realty Network Group. Semian argues that the trial court erred in granting partial summary judgment to KNEPH on July 15, 2020, and claims evidentiary errors and a decision inconsistent with the weight of the evidence during the damages award. 

The case originated from an asset purchase agreement made in March 2011, wherein KNEPH purchased business assets from Semian and Gress Real Estate, Inc., which included a noncompete clause prohibiting Semian from engaging in similar business for four years. Following the termination of Semian's employment on May 31, 2011, he filed a complaint on January 20, 2012, seeking a declaratory judgment to engage in real estate transactions due to financial hardship. KNEPH responded by threatening litigation and seeking injunctive relief to enforce the noncompete agreement.

KNEPH filed a counterclaim on January 21, 2015, alleging breaches of the agreement and other related contracts. Semian denied the allegations. KNEPH subsequently issued discovery requests on November 2, 2018, which Semian failed to respond to within the mandated timeframe. KNEPH then filed a motion to compel responses, which the court granted, deeming certain requests for admission as admitted due to Semian's noncompliance.

The requests for admission included claims regarding the accuracy of Semian's company's financial records, misappropriation of funds, and violations of obligations as a licensed real estate broker.

On March 14, 2019, KNEPH filed a motion for partial summary judgment due to Semian's failure to respond to discovery requests, claiming this resulted in the matters being deemed admitted, thus entitling KNEPH to judgment on liability for Counts I-IV and VI of its counterclaims. A hearing was held on October 29, 2019, and on July 15, 2020, the court granted KNEPH's motion, entering summary judgment on liability for the specified counts and scheduling a damages hearing for November 9, 2020. After this hearing, the court awarded KNEPH $130,306.51 in damages on February 25, 2021. Semian filed an appeal, which was initially quashed for not being from a final order. After resolving remaining matters, Semian filed a new appeal, raising four issues regarding the trial court's decisions: 

1. The alleged error in granting summary judgment based on admissions deemed admitted under Pa.R.Civ. P. 4014, arguing the admissions were legal conclusions not factual.
2. The court's discretion in allowing spreadsheets to support damages despite lack of underlying documentation due to discovery violations, which Semian contends made damages speculative.
3. The claim that the decision was against the weight of evidence as there was no connection of $100,000 to KNEPH since Mark DeStefano was not a party.
4. The trial court's error in allowing testimony from Helen Lavelle or her representative, who were not disclosed in discovery, creating unfair surprise.

In reviewing the summary judgment, the appellate court will assess whether the lower court erred in concluding there were no genuine issues of material fact, using a de novo standard of review while favoring the nonmoving party.

Rule 4014(b) mandates that a request for admission is deemed admitted if the responding party does not provide a verified answer or objection within thirty days. KNEPH served requests for admissions to Semian on November 2, 2018, but Semian failed to respond by the December 2, 2018 deadline, resulting in the admissions being conclusively established under Rule 4014(d). Despite KNEPH's later motion to compel responses to outstanding requests and the court's order for Semian to comply, Semian did not address the admissions. When KNEPH filed a motion for partial summary judgment on March 14, 2019, Semian denied that the admissions were valid, claiming he responded on April 26, 2019, but he did not substantiate how this negated the earlier admissions or specify which requests were improper. The trial court affirmed that failure to respond within the designated timeframe results in admissions of the facts in the requests. Semian's rationale for not responding, citing a lapse in litigation activity, did not excuse his non-compliance with Rule 4014. The court upheld the grant of partial summary judgment on liability, rejecting Semian's appeal. Additionally, Semian contested the trial court's evidentiary rulings, arguing against the use of spreadsheets instead of tax returns for KNEPH’s damages claims. The court reviewed these evidentiary decisions under an abuse of discretion standard.

Semian argues that KNEPH failed to provide supporting documentation during discovery, making their evidence of damages speculative. KNEPH counters that the evidence presented was relevant, properly authenticated, and prepared in the ordinary course of business. The trial court sided with KNEPH, finding that they met their burden of proof regarding damages. Testimony from Mark DeStefano, a managing member of KNEPH, included details of loans paid on Semian's behalf, supported by a Transaction Report and an email confirming an $11,500 loan advancement to Semian. KNEPH demonstrated total loan advancements of $17,000, and the court found no abuse of discretion in accepting this evidence.

Regarding a separate $100,000 loan DeStefano took out for company rebranding, Semian contested this as being unsupported by evidence linking it to his losses. The trial court noted that DeStefano’s testimony, which included a detailed account of missing escrow funds totaling $12,100—evidence not sufficiently challenged by Semian—supported KNEPH’s claims. DeStefano provided invoices exceeding the $100,000 loan for rebranding, corroborated by a representative from the Lavelle Strategy Group.

The court affirmed KNEPH's damages award of $130,306.51, stating that the evidence and testimony were adequate to support this amount. Semian's claim of trial court error for allowing witness Helen Lavelle to testify, due to her not being disclosed in discovery, was rejected on the grounds that no scheduling order for witness disclosure was issued by the court.

KNEPH argued that a pretrial conference was unnecessary after summary judgment was granted on liability, leading directly to a damages hearing. Semian, in his appeal, failed to provide case law supporting the exclusion of Lavelle's testimony at this hearing. The court exercised its discretion to allow her testimony despite her absence from the witness list, and Semian was not prejudiced as he had the chance to cross-examine her and address her evidence. KNEPH acknowledged Semian's citations of two cases concerning witness preclusion but noted that these cases emphasize the trial court's discretion in allowing testimony, particularly when no prejudice is evident. KNEPH contended that Semian could not reasonably claim surprise at Lavelle's testimony, given that related invoices were disclosed during discovery. Even if admitting her testimony constituted an error, it was deemed harmless due to its cumulative nature alongside other witnesses' testimonies. The court found no abuse of discretion in allowing Lavelle's testimony and upheld the trial court's ruling, affirming the damages awarded to KNEPH. The order was affirmed, and judgment was entered.