Rufe, District Judge.
Edward Jordan appeals from the Bankruptcy Court's order denying his proof of claim arising from the botched sale of a 1953 Cadillac Eldorado automobile 18 years ago.
The following facts are taken from the Bankruptcy Court's opinion sustaining Debtor-Appellee Alan Wolf's objection to Appellant Edward Jordan's claim.
In early 1999, Jordan contacted Wolf after seeing an advertisement for the 1953 Cadillac Eldorado. Wolf was a 90% owner of Modern Classics, Inc., a licensed collector car dealership that had been in business for approximately 22 years. In response to the inquiry, on Modern Classics stationery, Wolf provided Jordan with additional information including that payment was to be made by a check payable to Alan Wolf. In February 1999, Jordan signed a contract to buy the Eldorado for $59,000. The contract stated that it was an invoice from Modern Classics and that Alan Wolf was the seller, and was signed by Jordan and Wolf. Wolf deposited Jordan's check into his personal bank account. Rather than deliver the Eldorado to Jordan, Wolf ultimately sold the Eldorado to another buyer in August 2000 for $48,000.
Wolf initially offered to refund Jordan, but then offered to replace the Eldorado with a 1953 Cadillac Speedster (the "Speedster"), which would need additional repairs to match the Eldorado's condition. Jordan accepted the offer for the replacement car. The repairs on the Speedster took at least ten years to complete.
In 2010, when it became clear that the Speedster transaction would not pan out, the parties entered into an agreement for repayment of the amount originally paid by Jordan over five months. Wolf signed the repayment agreement above the words "Modern Classics." Wolf missed his first scheduled payment, and instead sent Jordan a $3,000 check from his personal account several weeks later, which Jordan cashed. Wolf discussed the possibility of selling personal assets to repay the debt to Jordan. However, he made no additional payments to Jordan, nor did he deliver any automobile to him.
On April 25, 2012, Jordan sued Modern Classics in the Court of Common Pleas of Philadelphia, and on February 19, 2013, he obtained a default judgment in that court against Modern Classics in the amount of
On July 22, 2014, Jordan sued Wolf in the Philadelphia Court of Common Pleas, seeking judgment in the amount of $70,800 for breach of contract, fraud, and unjust enrichment. The court sustained Wolf's preliminary objections in part, dismissing the breach of contract claim but allowing the claims of fraud and unjust enrichment to proceed. The court placed the case in deferred status after Wolf filed for bankruptcy in February 2015. On July 5, 2017, the state court matter was "administratively closed due to docket inactivity of more than 24 months."
On February 2, 2015, Wolf filed a voluntary petition for relief under Chapter 13 of the United States Bankruptcy Code
A district court in reviewing the decision of a bankruptcy court "may affirm, modify, or reverse a bankruptcy judge's judgment, order or decree or remand with instructions for further proceedings."
The outcome of this case turns on whether Jordan contracted with Wolf personally, or with Modern Classics. Jordan contends that the Bankruptcy Court erred as a matter of law in holding that Wolf was not personally liable. Given Wolf's 90% ownership of Modern Classics and his personal involvement in the transactions at issue here (e.g., depositing a check from Jordan into his personal account), Jordan argues that the Bankruptcy Court should have found that the contract was between Jordan and Wolf.
The Bankruptcy Court's finding was not clear error, as the evidence showed that Jordan was doing business with Modern Classics, not Wolf. Jordan received information about the Eldorado on Modern Classics stationery, the invoice for the Eldorado was issued by Modern Classics, and Wolf signed the repayment agreement above the words "Modern Classics." Jordan's claim that he "always believed" he was dealing with Wolf personally, and not Modern Classics,
The Debtor's acceptance of a personal check must be considered in context. Modern Classics was in business for over twenty (20) years. Undoubtedly, it participated in numerous purchase transactions with suppliers and sales transactions with customers. The extent of this business activity and, more importantly, the frequency with which the Debtor used his personal account for Modern Classics' transactions was not developed at trial ... Nor was the record developed on other relevant issues in either the 1999-2001 time frame (or a more extended time period) such as: how much, if any, of the $60,000.00 the Debtor invested back in Modern Classics; and whether the Debtor regularly treated Modern Classics revenues as personal income without paying corporate debts.
Jordan next argues that the Bankruptcy Court abused its discretion in sua sponte withdrawing the requests for admission ("RFAs") that Wolf failed to answer. Under Federal Rule of Civil Procedure 36(a)(3),
Jordan served the RFAs on Wolf on October 19, 2015. The relevant RFAs for the purposes of this appeal were:
Wolf never responded to the RFAs. In his response to Jordan's motion for summary judgment, he explained that he did not respond to the RFAs because they were "redundant and a rehash of the same material already provided to [Jordan]" in the prior state action Jordan filed against Wolf.
Wolf, who was represented by counsel, made no explicit request to withdraw the admissions in the nearly six months between receiving the RFAs and the trial. Although it appears that Rule 36 does not
Jordan contends that the Bankruptcy Court made erroneous evidentiary decisions. First, Jordan argues that the Bankruptcy Court erred in denying his motion to reopen discovery after summary judgment. This argument is essentially the same as his previous argument, as the motion to reopen discovery sought to compel Wolf to respond to the RFAs. Reopening discovery to compel responses to the RFAs would not have affected the out-come, and the Bankruptcy Court's decision to deny the motion was not an abuse of discretion.
Jordan next argues that the Bankruptcy Court abused its discretion by improperly weighing evidence and allowing conflicting testimony over his objections. The Bankruptcy Court is entitled to deference in its credibility findings based on conflicting evidence,
Jordan next urges the Court to reverse the Bankruptcy Court and allow his claim under a breach of contract theory. He avers that the unanswered RFAs, along with the evidence presented at trial, establish that Wolf breached the February 1999 contract.
This argument fails because Jordan contracted with Modern Classics, not Wolf. "It is a basic tenet of agency law that an individual acting as an agent for a disclosed [principal] is not personally liable on a contract between the [principal] and a third party unless the agent specifically agrees to assume liability."
Finally, Jordan contends that, if he is found to have contracted with Modern Classics, his claim is valid under an unjust enrichment theory, and the Bankruptcy Court erred by rejecting this claim. A plaintiff asserting an unjust enrichment claim must establish: "(1) benefits conferred on defendant by plaintiff; (2) appreciation of such benefits by defendant; and (3) acceptance and retention of such benefits under such circumstances that it would be inequitable for defendant to retain the benefit without payment of value."
Determining whether there was unjust enrichment requires asking: who was enriched, and was the enrichment unjust? Jordan bore the burden of showing "a benefit conferred on [Wolf] by [Jordan]"
For the foregoing reasons, the Court will affirm the order of the Bankruptcy Court sustaining Wolf's objection to Jordan's proof of claim. An order will be entered.