DIDONATO v. U.S. LEGAL SUPPORT, INC.
MEMORANDUM AND/OR OPINION. SIGNED BY HONORABLE JOHN R. PADOVA ON 8/17/17. 8/17/17 ENTERED AND COPIES E-MAILED AND MAILED TO PRO SE PARTY.(kw, )
IN THE UNITED STATES DISTRICT COURT
FOR THE EASTERN DISTRICT OF PENNSYLVANIA
GREGORY DIDONATO d/b/a
SYNDICATED REPORTERS, INC.
U.S. LEGAL SUPPORT, INC. and
JOSEPH J. SARACO
August 17, 2017
Plaintiff, Gregory DiDonato, d/b/a Syndicated Reporters, Inc., has brought this action
against U.S. Legal Support, Inc. (“U.S. Legal”) and Joseph Saraco, asserting claims arising out
of a failed business arrangement between DiDonato and U.S. Legal. Before the Court is U.S.
Legal’s Motion for Summary Judgment. For the reasons that follow, we grant the Motion in part
and deny it in part.
In May 2012, DiDonato and U.S. Legal began to discuss entering into a business
arrangement pursuant to which DiDonato, a court reporter, would shutter his small court
reporting agency, Syndicated Reporters, Inc., and transfer his client list to U.S. Legal in
exchange for “commissions, first-call status on certain assignments, and an expense allowance.”
(Concise Statement of Stipulated Material Facts (“SMF”) ¶¶ 1, 3-4.) In June 2013, DiDonato did
not receive the minimum number of weekly depositions from U.S. Legal that DiDonato claims
he was promised according to the parties’ business arrangement. (Id. ¶ 5.) Shortly thereafter, on
July 10, 2013, U.S. Legal terminated its business relationship with DiDonato. (Id. ¶ 6.)
In July 2013, DiDonato retained Joseph Saraco as his counsel to resolve a fee dispute that
DiDonato had with U.S. Legal. (DiDonato Aff. ¶ 3.) On July 18, 2013, Saraco sent an e-mail to
U.S. Legal that included the following:
I have been retained by Greg DiDonato to represent him in an issue with fees due
him for services provided to your company . . . in particular with regard to World
Trade Center Litigation. . . . [T]here seems to be a valid claim that my client is
owed for fees he first credited to your company under the belief and promise that
he would be assigned more work in the litigation. . . . Greg has authorized me to
undertake appropriate legal action to protect his interests . . . .
(Pl.’s Concise Statement of Additional Facts Ex. B at 2-3; see also SMF ¶¶ 7-8; Hankey Decl. ¶¶
5-6, Ex. A.)
That e-mail was forwarded to David Hankey, counsel for U.S. Legal, who
subsequently spoke with Saraco on several occasions in August and September 2013, regarding
resolution of DiDonato’s claims. (Hankey Decl. ¶¶ 4, 7; SMF ¶ 9.)
DiDonato did not give Saraco the authority to “negotiate, settle or act on [DiDonato’s]
behalf regarding” any issue other than the limited fee dispute between DiDonato and U.S. Legal
at any time prior to November 13, 2014. (DiDonato Aff. ¶ 9.) Nonetheless, on September 25,
2013, Saraco represented to Hankey “that he had authority from DiDonato to agree to a
settlement whereby DiDonato would accept, in full satisfaction of all of his claims against U.S.
Legal, the amount of $4,000.00; in exchange for this payment, DiDonato would grant U.S. Legal
Support a general release.” (Hankey Decl. ¶ 8.) Hankey drafted an agreement reflecting these
settlement terms (the “Settlement Agreement”), and e-mailed it to Saraco on September 26,
2013. (Id. ¶ 9, Ex. B; SMF ¶ 10, Ex. A.) On September 30, 2013, Saraco responded to U.S.
Legal via e-mail, stating, “[t]his looks fine. . . . I will have it executed and sent to you asap.”
(SMF ¶ 11 (quotation marks omitted).) However, when Saraco sent this e-mail to U.S. Legal, he
knew that DiDonato had not authorized him to execute a general release in favor of U.S. Legal in
exchange for a $4,000.00 payment. (Id. ¶ 12.)
On October 18, 2013, Saraco sent a “Hold Harmless Agreement” to DiDonato, advising
him that it contained all of the material terms of the Settlement Agreement that he had negotiated
between DiDonato and U.S. Legal. (Id. ¶ 13, Ex. B.) That same day, intending to be bound by
the terms set forth in the Hold Harmless Agreement, DiDonato executed the Hold Harmless
Agreement and returned it to Saraco. (Id. ¶ 14; DiDonato Aff. ¶ 5.) The Hold Harmless
Agreement states that U.S. Legal will make a $4,000.00 payment to DiDonato to “settle the
dispute between the parties concerning monies due from U.S. Legal Support to DiDonato for
services rendered by DiDonato on behalf of U.S. Legal Support.” (SMF Ex. B ¶ 111 a.-b.) It
then states that in exchange for this payment, DiDonato “agree[d] to cease and withdraw any
legal action filed against U.S. Legal Support on these issues and not  partake in any further
legal action or claims against U.S. Legal Support concerning these and only these issues.” (Id.
Ex. B. ¶ III.c.) However, the Settlement Agreement does not contain these terms. (Compare id.
Ex. A with id. Ex. B.)
On October 21, 2013, Saraco faxed to U.S. Legal a copy of the Settlement Agreement
that appeared to bear DiDonato’s signature. (Id. ¶ 15; see also id. ¶ 16; Hankey Decl. ¶ 11.)
DiDonato’s signature on the Settlement Agreement was “forged by Saraco without DiDonato’s
knowledge or approval.” (SMF ¶ 25.) In fact, DiDonato neither saw nor received a copy of the
Settlement Agreement before Saraco submitted it to U.S. Legal and he had not signed it. (Id. ¶
16.) On October 23, 2013, Hankey informed Saraco that he had forwarded the Settlement
Agreement to U.S. Legal’s headquarters. (Id. ¶ 17; Hankey Decl. ¶ 12.) He also told Saraco that
because U.S. Legal had a W-9 for Syndicated Reporters, Inc., but did not have a W-9 for
DiDonato, U.S. Legal “would either have to issue the check to Syndicated Reporters or obtain a
new W-9 for DiDonato.” (SMF ¶ 17; Hankey Decl. ¶ 12.) When Saraco responded, he asked
Hankey if U.S. Legal could issue the payment to both himself and DiDonato. (SMF ¶ 18.)
Hankey “then informed Saraco that, in order to process such a payment, U.S. Legal Support
would require a W-9 for [Saraco] as well.” (Hankey Decl. ¶ 13, Ex. E.) On October 24, 2013,
Saraco provided a completed W-9 to U.S. Legal and again requested that U.S. Legal issue
payment to DiDonato and himself. (SMF ¶ 19.) Later that day, Hankey informed Saraco that
U.S. Legal would also need a signed authorization from DiDonato in order to issue the
settlement payment jointly, to which Saraco responded “I will secure the note you requested and
send [it] to you.” (Id. ¶¶ 20-21; Hankey Decl. ¶¶ 15-16, Ex. H.)
On October 28, 2013, Saraco faxed a note to Hankey that Saraco represented had been
signed by DiDonato. (SMF ¶ 22.) The note stated, “[p]lease allow this to confirm that I
authorize the $4000.00 settlement in this matter, Gregory DiDonato and Syndicated Reports vs.
US Legal Support, may be issued to myself and my attorney Joseph J. Saraco, Esquire.” (Id. ¶
22; Hankey Decl. ¶ 17, Ex. I.) On October 29, 2013, U.S. Legal mailed a letter directly to
DiDonato, which stated:
Enclosed is a fully executed Settlement Agreement by and between U.S. Legal . .
. and Gregory DiDonato . . . . In addition, [enclosed] is a check made payable to
both Syndicated Reporters, Inc. and Joseph J. Saraco (as per your request) in the
amount of $4,000 in accordance with said Settlement Agreement.
(SMF ¶ 24, Ex. C (third alteration in original) (quotation marks omitted).) DiDonato received
this letter on November 4, 2013, along with a copy of the Settlement Agreement purporting to
incorporate DiDonato’s signature, and a check in the amount of $4,000.00. (Id. ¶¶ 25-26.)
Immediately thereafter, DiDonato emailed the letter and its enclosures to Saraco, stating, “Joe,
got this today. The agreement is not what I signed that you sent. Advise.” (Id. ¶ 27, Ex. D.)
The next day, Saraco responded as follows:
This is not our agreement. Not sure what they are trying to pull except that they
are worried about you with the next battle. I have a good relationship with the
attorney, and this was clearly not sent by him, so I will reach out to him today and
give you a call. Meanwhile, you have the check so let’s get that deposited. That
should have been payable to you only.
(Id. ¶ 28, Ex. D.)
DiDonato then asked Saraco if depositing the $4,000.00 check would
constitute consent to the Settlement Agreement. (Id. ¶ 29, Ex. D.) Saraco responded that it
“‘will not be seen as consent to anything other than this particular case.’” (Id. ¶ 30 (quoting Ex.
D).) After receiving Saraco’s response to his query, DiDonato signed and deposited the check.
(Id. ¶ 31.)
The Amended Complaint asserts three claims against U.S. Legal: Tortious Interference
with Prospective Business Contracts (Count I); Breach of Contract (Count II); and violation of
the Lanham Act (15 U.S.C. § 1125) (Count III). It also asserts four claims against Saraco: Fraud
(Count IV); Professional Legal Malpractice (Count V); violation of Pennsylvania’s Unfair Trade
Practices and Consumer Protection Law (Count VI); and Breach of Contract (Count VII). U.S.
Legal has asserted a Counterclaim against DiDonato for Breach of Contract and a Crossclaim
against Saraco for Fraud.
Summary judgment is proper “if the movant shows that there is no genuine dispute as to
any material fact and the movant is entitled to judgment as a matter of law.” Fed. R. Civ. P.
56(a). An issue is ‘“genuine”’ if ‘“the evidence is such that a reasonable jury could return a
verdict for the nonmoving party. . . .”’ Lujan v. Defs. of Wildlife, 504 U.S. 555, 590 (1992)
(quoting Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986)). A factual dispute is
“material” if it “might affect the outcome of the suit under the governing law . . . .” Anderson,
477 U.S. at 248.
“[A] party seeking summary judgment always bears the initial responsibility of informing
the district court of the basis for its motion, and identifying those portions of [the record] which
it believes demonstrate the absence of a genuine issue of material fact.” Celotex Corp. v. Catrett,
477 U.S. 317, 323 (1986). Where the nonmoving party bears the burden of proof on a particular
issue at trial, the movant’s initial Celotex burden can be met simply by “pointing out to the
district court” that “there is an absence of evidence to support the nonmoving party’s case.” Id.
at 325. After the moving party has met its initial burden, the adverse party’s response “must
support the assertion [that a fact is genuinely disputed] by: (A) citing to particular parts of
materials in the record . . . ; or (B) showing that the materials [that the moving party has] cited do
not establish the absence . . . of a genuine dispute.” Fed. R. Civ. P. 56(c)(1). Summary
judgment is appropriate if the nonmoving party fails to respond with a factual showing
“sufficient to establish the existence of an element essential to that party’s case, and on which
that party will bear the burden of proof at trial.” Celotex, 477 U.S. at 322. In ruling on a
summary judgment motion, we consider “the facts and draw all reasonable inferences in the light
most favorable to . . . the party who oppose[s] summary judgment.” Lamont v. New Jersey, 637
F.3d 177, 179 n.1 (3d Cir. 2011) (citing Scott v. Harris, 550 U.S. 372, 378 (2007)).
U.S. Legal has moved for summary judgment as to Counts I-III of the Amended
Complaint and as to its Counterclaim. U.S. Legal contends that it is entitled to summary
judgment because DiDonato is bound by the terms of the Settlement Agreement, which, it
asserts, releases all of the claims DiDonato has brought against U.S. Legal.
Enforceability of the Settlement Agreement
U.S. Legal contends that it is entitled to summary judgment because the claims against it
are barred by the release contained in the Settlement Agreement, which states that DiDonato
“irrevocably and unconditionally release[d], acquit[ted], and forever discharge[d] U.S. Legal
Support . . . of and from any and all claims . . . which DiDonato . . . had, has, or may have
against . . . U.S. Legal Support . . . which occurred on or before the Date of Execution of this
Agreement.” (Settlement Agreement ¶ 3.a.) DiDonato, however, maintains that the Settlement
Agreement is not enforceable because he did not sign it or authorize Saraco to enter into it on his
behalf. “The validity and enforceability of settlement agreements is governed by state contract
law.” Shell’s Disposal & Recycling, Inc. v. City of Lancaster, 504 F. App’x 194, 200 (3d Cir.
2012) (citing Am. Eagle Outfitters v. Lyle & Scott Ltd., 584 F.3d 575, 582 (3d Cir. 2009);
Mazzella v. Koken, 739 A.2d 531, 536 (Pa. 1999)). Under Pennsylvania law we consider three
factors in deciding whether a contract is enforceable: “‘(1) whether both parties manifested an
intention to be bound by the agreement; (2) whether the terms of the agreement are sufficiently
definite to be enforced; and (3) whether there was consideration.’” Reynolds v. Univ. of Pa., 483
F. App’x 726, 734 (3d Cir. 2012) (quoting ATACS Corp. v. Trans World Commc’ns, Inc., 155
F.3d 659, 666 (3d Cir. 1998)). When we determine whether parties have manifested an intent to
be bound, we “consider ‘not the inner, subjective intent of the parties, but rather the intent a
reasonable person would apprehend in considering the parties’ behavior.’” Baldwin v. Univ. of
Pitt. Med. Ctr., 636 F.3d 69, 75 (3d Cir. 2011) (quoting Am. Eagle Outfitters, 584 F.3d at 582;
and citing Mellon Bank, N.A. v. Aetna Bus. Credit, Inc., 619 F.3d 1001, 1009 (3d Cir. 1980)).
Thus, “[u]nder contract law, the objective manifestation of the parties is the governing factor
regardless of subjective beliefs and reservations. An ‘actual’ meeting of the minds is not
necessary to form a contract.” Rambo v. Greene, 906 A.2d 1232, 1236 (Pa. Super. Ct. 2006)
(quoting Long v. Brown, 582 A.2d 359, 363 (Pa. Super. Ct. 1990)).
DiDonato argues that he could not have manifested his intent to be bound by the
Settlement Agreement because he did not sign it. However, we also look at his other conduct.
“‘[A]n offer may be accepted by conduct and what the parties [do] pursuant to [the] offer is
germane to show whether the offer is accepted.’” Ins. Co. of Greater N.Y. v. Fire Fighter Sales
& Serv. Co., 120 F. Supp. 3d 449, 457 (W.D. Pa. 2015) (alterations in original) (quoting
Hartman v. Baker, 766 A.2d 347, 351 (Pa. Super. Ct. 2000)), appeal dismissed No. 15-3291 (3d
Cir. Feb. 23, 2016)). “Further ‘[w]hether particular conduct expresses an offer and acceptance
must be determined on the basis of what a reasonable person in the position of the parties would
be led to understand by such conduct under all of the surrounding circumstances.’” Lambrecht
v. Liebl, No. 80 EDA 2015, 2015 WL 6737631, at *2 (Pa. Super. Ct. Aug. 7, 2015) (quoting
Mountain Props. v. Tyler Hill Realty Corp., 767 A.2d 1096, 1101 (Pa. Super. Ct. 2001)).
“‘[W]hen the record contains conflicting evidence regarding intent, the question of
whether the parties formed a completed contract is one for the trier of fact.’” EBC, Inc. v. Clark
Bldg. Sys., Inc., 618 F.3d 253, 263 (3d Cir. 2010) (quoting Channel Home Ctrs., Div. of Grace
Retail Corp. v. Grossman, 795 F.2d 291, 300 n.9 (3d Cir. 1986)). However, ‘“[t]he question of
whether an undisputed set of facts establishes a contract is a matter of law.”’ Enslin v. CocaCola Co., Civ. A. No. 14-6476, 2017 WL 1190979, at *7 (E.D. Pa. Mar. 31, 2017) (quoting
Mountain Props., 767 A.2d at 1101; and citing Reitmyer v. Coxe Bros. & Co., 107 A. 739, 741
Here, the facts that we consider with respect to whether the parties entered into an
enforceable Settlement Agreement are undisputed.
When we review the undisputed facts
regarding the parties’ conduct, we observe that U.S. Legal sent a copy of the Settlement
Agreement to DiDonato that purported to contain DiDonato’s signature, along with a check for
$4,000.00. (SMF ¶¶ 23-26.) Those documents were accompanied by a letter from U.S. Legal,
which stated that the check was sent “in accordance with [the] Settlement Agreement.” (Id. ¶
24.) DiDonato told Saraco that he did not agree to the terms of the Settlement Agreement and
that he was concerned that depositing the $4,000.00 check would be viewed as acceptance of
those terms. (Id. ¶¶ 27, 29.) Nonetheless, DiDonato deposited the $4,000.00 check, even though
the Settlement Agreement contained his forged signature. (Id. ¶¶ 25, 31.) The record does not
show that DiDonato expressed his concerns about the Settlement Agreement to anyone other
than Saraco prior to cashing the check.1 (Id. ¶¶ 27, 29, 31.)
We conclude, based on these undisputed facts, that DiDonato’s objectively manifested
conduct expressed acceptance of the Settlement Agreement from the perspective of a reasonable
person in U.S. Legal’s position. See Lambrecht, 2015 WL 6737631, at *2 (quoting Mountain
Props., 767 A.2d at 1101). DiDonato’s endorsement and deposit of the $4,000.00 check in
conformity with the terms of the enclosed Settlement Agreement constitutes evidence of an
intent to be bound by the Agreement. See, e.g., Blaisdell Filtration Co. v. Bayard & Co., 166 A.
234, 236 (Pa. 1933) (stating that “when defendant retained and used the check sent by plaintiff,
the latter was entitled to treat such retention and use as an acceptance of the terms on which the
check was sent” (citations omitted)); Tangney v. Cronin, No. 468 EDA 2013, 2014 WL
10987421, at *4 (Pa. Super. Ct. Jan. 13, 2014) (holding that “[b]y accepting and depositing the
check,” the offeree “accepted the offer by conduct” (citing Penn-Allen Broad. Co. v. Traylor,
We further note that that the record is devoid of any evidence that would indicate that
U.S. Legal was aware that Saraco was acting beyond the scope of his authority. In fact, the
record demonstrates that Saraco repeatedly misled U.S. Legal regarding his settlement authority.
(See Hankey Decl. ¶ 8, 10-11, 17.)
133 A.2d 528, 531 (Pa. 1957); and Accu-Weather Inc. v. Thomas Broad. Co., 625 A.2d 75, 78
(Pa. Super. Ct. 1993))).
Moreover, DiDonato’s failure to object to the executed Settlement Agreement by
notifying U.S. Legal that the signature in the Settlement Agreement was not his, serves as an
additional indicator of his intent to be bound by the terms of the Settlement Agreement. In a
case involving a factually similar scenario, the offeree received a copy of a written agreement
and, although he did not sign the agreement, he accepted the benefits offered to him pursuant to
that agreement. Accu-Weather, 625 A.2d at 78. The Pennsylvania Superior Court concluded
that the agreement should be enforced because the offeree “had a duty to speak when confronted
with a document providing, unequivocally, that receipt of [the offeror’s] services would be
tantamount to assenting to the binding nature of the . . . Agreement.” Id. at 79 (citations
omitted). We find, in the instant case, that DiDonato’s failure to object to the terms of the
Settlement Agreement, coupled with his acceptance of the $4,000.00 check, would cause a
reasonable person in the position of the parties to believe that DiDonato manifested his assent to
the Settlement Agreement.
DiDonato contends that he demonstrated an objective lack of intent to be bound by the
Settlement Agreement because, upon receiving a copy of the Agreement, he immediately
contacted Saraco to tell him that he did not agree to the terms of the Agreement and was
concerned that depositing the check would be construed as acceptance of those terms. (See SMF
¶¶ 27, 29.) However, Pennsylvania law is clear that only the actions that would have been
apparent to U.S. Legal are relevant to our analysis. See Baldwin, 636 F.3d at 75 (citations
omitted). DiDonato’s concerns – voiced solely to his counsel – would not have been apparent to
a “reasonable person in the position of the parties.” Mountain Props., 767 F.2d at 1101. See,
e.g., Ingrassia Constr. Co. v. Walsh, 486 A.2d 478, 483 (Pa. Super. Ct. 1984) (stating that “it
matters not whether [a party] truly believed a contract did not exist if his manifested intent
reasonably suggested the contrary to [the opposing party]”); Mountain Props., 767 A.2d at 1101
(concluding that “[a] reasonable person would be led to understand that an agreement existed”
where the party acknowledged its receipt of the offer to the opposing party and proceeded to
make use of the benefit under the agreement).
DiDonato also argues that he cannot be bound by the Settlement Agreement because
Saraco lacked express authority to settle DiDonato’s claims. While “an attorney can only bind
his client to a settlement based on express authority,” Reutzel v. Douglas, 570 A.2d 787, 792 (Pa.
2005), we are concerned here with DiDonato’s own actions. The issue is not whether Saraco
bound DiDonato, but, rather, whether DiDonato bound himself by objectively manifesting his
intention to be bound by the Settlement Agreement. As we discussed above, we find that
DiDonato did objectively manifest such an intent.
In sum, although DiDonato subjectively believed that he had not entered into an
enforceable contract, because his objective outward manifestations from the perspective of a
reasonable person in the position of U.S. Legal suggested otherwise, only those outward
manifestations are of consequence.
6737631, at *2.
See Rambo, 906 A.2d at 1236; Lambrecht, 2015 WL
In light of the undisputed evidence of record establishing that DiDonato
endorsed and deposited the $4,000.00 check from U.S. Legal and failed to raise any objections to
U.S. Legal regarding the terms of the Settlement Agreement or the signature on the document,
we conclude, accordingly, that DiDonato manifested an intent to be bound by the Settlement
DiDonato does not dispute that the terms of the Settlement Agreement are
sufficiently definite to be enforced and that there was consideration. Thus, we conclude as a
matter of law that the Settlement Agreement is an enforceable contract. Consequently, we next
examine whether the claims asserted by DiDonato in the Amended Complaint are released by the
release provision contained in the Settlement Agreement.
The Scope of the Release
U.S. Legal argues that all of the claims asserted against it fall within the scope of the
release, thus entitling it to summary judgment as to all of DiDonato’s claims. Releases are
construed “according to principles of state contract law.” Gunser v. City of Phila., 241 F. App’x
40, 42 (3d Cir. 2007) (citing Three Rivers Motors Co. v. Ford Motor Co., 522 F.2d 885, 892 (3d
Cir. 1975)). When a court construes the scope of a release, it must endeavor to honor the
intentions of the parties. Ford Motor Co. v. Buseman, 954 A.2d 580, 583 (Pa. Super. Ct. 2008)
(quoting Brown v. Cooke, 707 A.2d 231, 233 (Pa. Super. Ct. 1983)). “[R]eleases are strictly
construed so as not to bar the enforcement of a claim that had not accrued at the date of the
execution of the release.” Fortney v. Callenberger, 801 A.2d 594, 597 (Pa. Super. Ct. 2002)
(citing Vaughn v. Didizian, 648 A.2d 38, 40 (Pa. Super. Ct. 1994)). “‘In cases of a written
contract, the intent of the parties is the writing itself,’” Lesko v. Frankford Hosp.-Bucks Cty., 15
A.3d 337, 342 (Pa. 2011) (quoting Ins. Adjustment Bureau, Inc. v. Allstate Ins. Co., 905 A.2d
462, 468 (Pa. 2006)), and “‘it is well settled that the effect of a release is to be determined by the
ordinary meaning of its language.’” Pennsbury Vill. Assocs., LLC v. Aaron McIntyre, 11 A.3d
906, 914 (Pa. 2011) (quoting Taylor, 778 A.2d at 667).
The release provision of the Settlement Agreement states, in pertinent part, as follows:
1. Payments by U.S. Legal Support. In consideration for the undertakings of the
other parties to this Agreement, U.S. Legal Support shall pay to DiDonato the
sum of four thousand dollars ($4,000.00). . . .
3. Mutual General Releases.
a. Upon completion of the payments set forth in section 1, Gregory
DiDonato . . . agrees to irrevocably and unconditionally release, acquit, and
forever discharge U.S. Legal Support of and from any and all claims . . . which
DiDonato . . . had, has, or may have against . . . U.S. Legal Support . . . arising out
of or in any way resulting from or otherwise related to any circumstances, event,
act, occurrence, or omission of or by . . . U.S. Legal Support . . . which occurred
on or before the Date of Execution of this Agreement.
(Settlement Agreement ¶¶ 1, 3 (emphasis added).) DiDonato concedes that, if the Settlement
Agreement is enforceable, the claims contained in Counts II and III of the Amended Complaint
would fall within the scope of the release, but argues that “[b]ecause discovery in the instant
matter was limited to the circumstances and negotiations of the [Settlement] Agreement, a
genuine issue of material fact exists as to the applicability of the [Settlement] Agreement” to the
claim of Tortious Interference with Prospective Business Contracts asserted in Count I.2 (Pl.’s
Mem. at 8.) The Amended Complaint alleges that after U.S. Legal ended the parties’ business
relationship on July 10, 2013, U.S. Legal “informed potential business clients” of DiDonato that
he “was subject to a restrictive covenant not to compete with U.S. Legal Support, Inc. if he left
their employment, and therefore, potential clients should not do business with him.” (Am.
Compl. ¶ 31.) If the alleged tortious interference took place before the Settlement Agreement
became effective, that claim would be barred by the release, but, if it took place after the
Under Pennsylvania law, to prevail on a claim for tortious interference with
existing or prospective contractual relationships, a party must prove: (1) the
existence of a contractual or prospective contractual or economic relationship
between the plaintiff and a third party; (2) purposeful action by the defendant,
specifically intended to harm an existing relationship or intended to prevent a
prospective relation from occurring; (3) the absence of privilege or justification
on the part of the defendant; (4) legal damage to the plaintiff as a result of the
defendant’s conduct; and (5) for prospective contracts, a reasonable likelihood
that the relationship would have occurred but for the defendant’s interference.
Acumed LLC v. Advanced Surgical Servs., Inc., 561 F.3d 199, 212 (3d Cir. 2009) (citing
Brokerage Concepts, Inc. v. U.S. Healthcare, Inc., 140 F.3d 494, 530 (3d Cir. 1998)).
Settlement Agreement became effective, a claim arising from that conduct would not be barred
by the release. See Fortney, 801 A.2d at 598 (citing Vaughn, 648 A.2d at 40). The record before
us on this Motion, however, does not contain any evidence regarding U.S. Legal’s alleged
tortious interference with DiDonato’s prospective clients. As a result, there is no evidence that
would establish whether DiDonato’s claim for tortious interference accrued after the effective
date of the Settlement Agreement. Consequently, there is a genuine issue of material fact as to
whether the tortious interference claim falls within the ambit of the release. See Celotex Corp.,
477 U.S. at 323.
U.S. Legal argues that it is nonetheless entitled to summary judgment as to Count I
because DiDonato has the burden of establishing that his claim is not barred by the release and
he has presented no evidence in that regard. See Fed. R. Civ. P. 56(c)(1); Celotex, 477 U.S. at
322. DiDonato asserts, in response, that U.S. Legal’s Motion should be denied as to Count I
because he lacked the requisite evidence as a result of the phased discovery plan entered in this
The parties have been permitted to conduct discovery only with regard to the
circumstances and objectives of the release. (See June 28, 2016 Order.) DiDonato asks that we
deny the Motion with regard to Count I of the Amended Complaint on that basis and has
submitted the Affidavit of his attorney, Donald Benedetto, pursuant to Rule 56(d) in support of
this request. Federal Rule of Civil Procedure 56(d) provides that, “[i]f a nonmovant shows by
affidavit or declaration that, for specified reasons, it cannot present facts essential to justify its
opposition, the court may: (1) defer considering the motion or deny it; (2) allow time to obtain
affidavits or declarations or to take discovery; or (3) issue any other appropriate order.” Fed. R.
Civ. P. 56(d). An affidavit filed pursuant to Rule 56(d) must identify with specificity “‘what
particular information is sought; how, if uncovered, it would preclude summary judgment; and
why it has not previously been obtained.’” Pennsylvania Dep’t of Pub. Welfare v. Sebelius, 674
F.3d 139, 157 (3d Cir. 2012) (quoting Dowling v. City of Phila., 855 F.2d 136, 139 (3d Cir.
Donald Benedetto states in his Affidavit that if additional discovery is permitted,
DiDonato would seek evidence of actual and potential clients of DiDonato and U.S. Legal, take
the deposition of an attorney who was informed by U.S. Legal that DiDonato was subject to a
non-compete agreement, and take depositions of some of U.S. Legal’s clients to determine
whether U.S. Legal interfered with DiDonato’s prospective contracts and the timeframe of such
interference. (Benedetto Aff. ¶¶ 4-6.) Benedetto further states that such discovery, which “has
not been conducted because of Plaintiff’s adherence with the Court’s Order of June 28, 2016,”
would allow DiDonato to determine if the tortious interference claim contained in Count I falls
within the scope of the release. (Id. ¶¶ 7-8.) Because the Affidavit details the information
sought, its significance with respect to the Summary Judgment Motion, and the reason the
information is currently unavailable, we conclude that DiDonato’s submissions comply with
Rule 56(d) and we deny the Motion for Summary Judgment as to Count I pursuant to Rule
U.S. Legal also argues that we should not allow DiDonato to conduct additional
discovery with respect to Count I because his attorney represented during the Court’s June 28,
2016 pretrial conference “that the release, if valid, was case dispositive.” (U.S. Legal’s Reply at
8.) However, we have no record of DiDonato’s counsel making any such representation, and,
moreover, the June 28, 2016 Order is inconsistent with U.S. Legal’s assertion. (See June 28,
2016 Order (stating that limited discovery is to be conducted “with respect to the circumstances
of and negotiations regarding the Mutual General Release” and that “the overall discovery
deadline will be Stayed until the Motion or Motions [for partial summary judgment] are
resolved”).) Consequently, we reject U.S. Legal’s argument that we should deny DiDonato’s
request for additional discovery with respect to Count I on this basis.
Accordingly, we deny the Motion for Summary Judgment as to Count I pursuant to Rule
56(d)(1). Because DiDonato concedes that the claims contained in Counts II and III are within
the scope of the release contained in the Settlement Agreement (see Pl.’s Mem. at 8), we grant
U.S. Legal’s Motion for Summary Judgment as to those claims.
U.S. Legal’s Counterclaim
Finally, U.S. Legal maintains that it is also entitled to summary judgment as to the breach
of contract Counterclaim that it has asserted against DiDonato. Specifically, it argues that
DiDonato is bound by the release contained in the Settlement Agreement, and that by filing the
instant suit, DiDonato breached that Agreement. The elements of a breach of contract claim are:
“(1) the existence of a contract, including its essential terms, (2) a breach of the contract; and, (3)
resultant damages.” Meyer, Darragh, Buckler, Bebenek & Eck, P.L.L.C. v. Law Firm of Malone
Middleman, P.C., 137 A.3d 1247, 1258 (Pa. 2016) (citing J.F. Walker Co., Inc. v. Excalibur Oil
Grp., Inc., 792 A.2d 1269, 1272 (Pa. Super. 2002)). “‘Resultant damages’ are those damages
suffered from the breach.” 412 N. Front St. Assocs., LP v. Spector Gadon & Rosen, P.C., 151
A.3d 646, 657 (Pa. Super. Ct. 2016) (quoting McShea v. City of Phila., 995 A.2d 334, 340 (Pa.
2010) and citing Logan v. Mirror Printing Co. of Altoona, 600 A.2d 225, 226 (Pa. Super. Ct.
1991)). “In order to prove damages, ‘a plaintiff must give a factfinder evidence from which
damages may be calculated to a reasonable certainty.’” Ins. Co. of Greater New York v. Fire
Fighter Sales & Serv. Co., 120 F. Supp. 3d 449, 461 (W.D. Pa. 2015), appeal dismissed (Feb. 23,
2016) (quoting Ware v. Rodale Press, Inc., 322 F.3d 218, 226 (3d Cir. 2003)).
We have already concluded that the Settlement Agreement is an enforceable contract.
Thus, the first element – the existence of a contract – is satisfied. See Meyer, Darragh, Buckler,
Bebenek & Eck, P.L.L.C., 137 A.3d at 1258 (citation omitted). The second element – breach of
the contract - is also satisfied because, as previously noted, DiDonato “concedes that if the
Agreement is found to be effective, Counts II and III of [the Amended Complaint] . . . would fall
within its scope.” (Pl.’s Mem. at 8.) See also Meyer, Darragh, Buckler, Bebenek & Eck,
P.L.L.C., 137 A.3d at 1258 (citation omitted). However, although the record demonstrates that
U.S. Legal has incurred damages in the form of attorneys’ fees and costs, no attempt has been
made to apportion the amount of attorneys’ fees expended as to each Count of the Amended
Complaint and the Counterclaim. Thus, we do not have evidence on the record from which the
third element, the damages that resulted from DiDonato’s breach of the Settlement Agreement by
bringing claims II and III of the Amended Complaint, could be “calculated to a reasonable
certainty.” See Meyer, Darragh, Buckler, Bebenek & Eck, P.L.L.C., 137 A.3d at 1258 (citation
omitted); Ins. Co. of Greater New York, 120 F. Supp. 3d at 461 (citation omitted). Accordingly,
we deny the Motion for Summary Judgment as to U.S. Legal’s Counterclaim.
For the foregoing reasons, we grant U.S. Legal’s Motion for Summary Judgment as to
Counts II and III of the Amended Complaint and we deny the Motion as to Count I of the
Amended Complaint and the Counterclaim. An appropriate Order follows.
BY THE COURT:
/s/ John R. Padova, J.
John R. Padova, J.
Disclaimer: Justia Dockets & Filings provides public litigation records from the federal appellate and district courts. These filings and docket sheets should not be considered findings of fact or liability, nor do they necessarily reflect the view of Justia.
Why Is My Information Online?