text:
    622 A.2d 367
    IRON WORKER’S SAVINGS AND LOAN ASSOCIATION v. IWS, INC. and Eagleview Construction, Inc. and Royalwood Estates. (Three Cases) Appeal of EAGLEVIEW CONSTRUCTION, INC. and Royalwood Estates. (Three Cases)
    Superior Court of Pennsylvania.
    Argued Nov. 20, 1991.
    Filed March 24, 1993.

      Denis J. Lawler, Philadelphia, for appellants.
    Bruce E. Rodger, Kennett Square, for appellee Iron Worker’s Sav.
    Mary D. France, Harrisburg, for participating party Com. Dept. of Banking.
    Before CAVANAUGH, POPOVICH and HOFFMAN, JJ.
   POPOVICH, Judge.

Herein, we address three appeals from related orders of the Court of Common Pleas of Chester County. The first order in question was entered on January 3, 1991, and denied appellants’ petition to open a confessed judgment. The second order was entered on January 4, 1991, and denied appellants’ motion to compel production of the joint report of examination performed on Iron Worker’s Savings and Loan Association by the Pennsylvania Department of Banking and the Federal Home Loan Bank, Office of Regulatory Functions. Finally, the third order in question was entered on January 4, 1991, and denied appellants’ motion to compel production of documents and reconvene the deposition of John R. Larkin. Finding no error below, we affirm all three orders.

We will first address that appeal docketed at 283 Philadelphia 1991, wherein appellants Eagleview Construction, Inc. and the joint venture trading as Royalwood Estates (hereafter “Eagleview”) contend: 1) The lower court erroneously employed an incorrect standard in analyzing the evidence presented in support of the amended petition to open the confessed judgment; 2) The lower court erred in applying the parol evidence rule to this case; and 3) The evidence was sufficient to raise a jury question on whether appellee (hereafter “Iron Worker’s”) breached its confidential relationship with Eagle-view. We find no merit to Eagleview’s contentions.

When the denial of a petition to open a confessed judgment is appealed, we will not disturb the lower court’s denial unless it is shown that the court committed an error of law or a manifest abuse of discretion. Fountain Hill Millwork Bldg. v. Belzel, 402 Pa.Super. 553, 555-556, 587 A.2d 757, 759 (1991); Suburban Mechanical Contractors, Inc. v. Leo, 348 Pa.Super. 324, 325, 502 A.2d 230, 231 (1985), citing Lambakis v. Exar, 340 Pa.Super. 483, 488, 490 A.2d 882, 884 (1985). Traditionally, a confessed judgment will be opened in only a limited number of circumstances, and only when the person seeking to open acts promptly, alleges a meritorious defense and presents sufficient evidence of that defense to require submission of the issues to the jury. Fountain, 587 A.2d at 759; Suburban, 502 A.2d at 231, citing First Seneca Bank v. Laurel Mt. Development Corp., 506 Pa. 439, 443, 485 A.2d 1086, 1088 (1984). In making such a determination, the court employs the same standard as that of the directed verdict— “viewing all the evidence in the light most favorable to the petitioner and accepting as true all evidence and proper inferences therefrom supporting the defense while rejecting adverse allegations of the party obtaining the judgment.” Suburban, 502 A.2d at 232, quoting Germantown Manufactur ing Co. v. Rawlinson, Jr., 341 Pa.Super. 42, 46-47, 491 A.2d 138, 140-141 (1985).

Rule 2959(e) of the Pennsylvania Rules of Civil Procedure provides that “in a proceeding to open a confessed judgment, if evidence is produced which, in a jury trial, would require the issues to be submitted to the jury, the court shall open the judgment.” Fountain, 587 A.2d at 759. Pa.R.C.P. 2959(e) has been interpreted to require the judgment debtor to offer clear, direct, precise and “believable” evidence of its meritorious defense. Suburban, 502 A.2d at 232; First Pennsylvania Bank, N.A. v. Lehr, 293 Pa.Super. 189, 201-202, 438 A.2d 600, 607 (1981).

Viewing the evidence in a light most favorable to Eagleview, the lower court set forth the facts as follows:

In September or October of 1987, John R. Larkin approached Dennis Meinhart, the principal of Eagleview, regarding a formation of a joint venture between IWS, Inc. (IWS) and Meinhart (Eagleview). IWS is a wholly owned subsidiary of Iron Worker’s [Savings and Loan Association]. Various meetings were held regarding this possible joint venture, and Meinhart found a suitable tract of land, later known as Royalwood Estates.
In December of 1987, Larkin, who had previously represented Meinhart [as legal counsel], told Meinhart he could no longer represent him, as he had a conflict of interest; namely, Larkin was a member of the Iron Worker’s Board. Larkin referred Meinhart to the law firm of Petrikin, Well-man, Damico, Carney & Brown, a firm with which Meinhart had previously dealt. Steven Brown, Esquire, undertook representation of Meinhart (Eagleview) and another member of the firm, Dennis Dunn, later represented Meinhart at the closing on March 31, 1988. On January 4, 1988, Meinhart signed an Agreement of Sale for the tract of land for $1,500,000.00.
Additional meetings were held before the March 31, 1988 closing date and several terms were discussed with regard to the loan agreement. One of the terms discussed was the length of the loan. Various notes indicate a period of eighteen (18) months to two (2) years. On March 29, 1988, two days before settlement, Meinhart was informed that the loan period would be eighteen (18) months. Meinhart objected to this shorter time period and was obstensibly told by John Whitig, Iron Worker’s President, not to worry, that the loan period would be extended.
Notwithstanding the fact that the loan documents clearly stated a loan period of eighteen (18) months, Meinhart signed the documents. It must be mentioned here that Meinhart admitted he was a sophisticated businessman; that he was represented by Mr.Brown and his firm; that he had an opportunity to read the loan documents at closing, but chose not to; that the documents were clearly readable and understandable, and finally, that he knew the repayment period was eighteen (18) months.

Trial Court Opinion, pp. 2-3.

First, Eagleview complains that the lower court applied an incorrect standard of review. Specifically, Eagleview contends that “[b]y holding that Eagleview had to present evidence that was “believable”, the Lower Court not only improperly increased Eagleview’s burden, but it weighed the presented evidence in violation of Pa.R.C.P. 2959(e).” Eagle-view’s Brief, p. 21. Requiring the petitioner to present “believable” evidence of a meritorious defense does not violate Pa.R.C.P. 2959(e). Rather, doing so insures proper application of Pa.R.C.P. 2959(e), by mandating that the decision whether to open a judgment will be based on credible evidence which, in a jury trial, would preclude the entry of a directed verdict and which, if believed by a jury, would not be reversed by the entry of judgment non obstante verdicto. See First Pennsylvania, 438 A.2d at 607; Ritchey v. Mars, 227 Pa.Super. 33, 324 A.2d 513 (1974) (judgment debtor does not have to prove his defense conclusively).

Having determined that the lower court applied the proper standard of review, we turn to Eagleview’s allegation that the lower court should not have applied the parol evidence rule to this case. Eagleview contends the parol evidence rule is inapplicable presently because: 1) Ambiguities exist in the parties’ “Agreement”, i.e., while the mortgage note states the term of the loan is eighteen months, the joint venture agreement provides that financing shall be in the form of a two-year loan; 2) Iron Worker’s induced Eagleview to execute the mortgage note by fraudulently misrepresenting that it would extend the term of the loan; 3) Iron Worker’s promise to extend the term of the loan was a separate contract from the mortgage note; 4) The mortgage note was executed under duress, and 5) The parties agreed subsequent to executing the mortgage note to a new contract which extended the term of the loan.

In Myers v. McHenry, 398 Pa.Super. 100, 580 A.2d 860 (1990), we set forth the following definition of the parol evidence rule:

Where the alleged prior or contemporaneous oral representations or agreements concern a subject which is specifically dealt with in the written contract, and the written contract covers or purports to cover the entire agreement of the parties, the law is now clearly and well settled that in the absence of fraud, accident or mistake the alleged oral representations or agreements are merged in or superseded by the subsequent written contract, and parol evidence to vary, modify or supersede the written contract is inadmissible in evidence.

Myers, 580 A.2d at 863, quoting LeDonne v. Kessler, 256 Pa.Super. 280, 286-287, 389 A.2d 1123, 1126-1127 (1978), quoting Bardwell v. The Willis Co., 375 Pa. 503, 506, 100 A.2d 102, 104 (1953).

In regard to the application of the parole evidence rule, we first address Eagleview’s allegation that “Agreement” between the parties is ambiguous because the mortgage note states the term of the loan is eighteen months, while the joint venture agreement provides that the loan term is two years. Eagle-view and IWS, Inc. executed a joint venture agreement on March 31, 1988, wherein those parties agreed that financing for the joint venture would be obtained through loans from Iron Worker’s Savings and Loan Association. The loans would have a repayment term of two years. However, on that same day, Eagleview and IWS, Inc., as mortgagors, executed, inter alia, a mortgage note, a mortgage and construction loan agreement, with Iron Worker’s, as mortgagee, which specifically provided for the $3,500,000 loan to be repaid in eighteen months.

Eagleview admits that it knew at the time of signing the mortgage note that its terms specifically required the loan to be repaid in eighteen months. Since the mortgage note upon which judgment was confessed is unambiguous in regard to the loan term, we find that the lower court correctly ruled that parol evidence was inadmissible to vary the terms of the written contract. Myers, 580 A.2d at 863.

Second, we must consider whether Iron Worker’s fraudulently induced Eagleview to execute the mortgage note by misrepresenting that it would extend the term of the loan. Eagleview argues that representatives of Iron Worker’s assured him that it would extend the term of the loan to two years and that the eighteen month term was necessary to comply with federal banking regulations. However, this court has held that “where the assertions put forth by one party are specifically contradicted by the written agreement, Bardwell applies and parol evidence is admissible only to prove fraud in the execution, not in the inducement, of the contract. Abel v. Miller, 293 Pa.Super. 6, 10, 437 A.2d 963, 965 (1982); LeDonne v. Kessler, 256 Pa.Super. 280, 294 & n. 10, 389 A.2d 1123, 1130 & n. 10 (1978).” McGuire v. Schneider, Inc, 368 Pa.Super. 344, 352-353, 534 A.2d 115, 119 (1987), aff'd per curiam, 519 Pa. 439, 548 A.2d 1223 (1988). Instantly, Eagle-view alleges fraud in the inducement, not execution.

Simply put, “[a] party cannot justifiably rely upon prior oral representations, yet sign a contract denying the existence of those representations. LeDonne v. Kessler, 256 Pa.Super. at 294 n. 10, 389 A.2d at 1130 n. 10.” McGuire, 534 A.2d at 119. Eagleview executed the mortgage note with the knowledge that the note mandated a eighteen month repayment period. It cannot now allege that Iron Worker’s assured Eagleview that the note did not mean what it said. “This is precisely the type of claim that the parol evidence rule was designed to bar.” McGuire, 534 A.2d at 119. If Eagleview relied on the alleged representation of a two year loan term, then it should have protected itself by incorporating the two year loan term into the mortgage note. Cf. McGuire, 534 A.2d at 119-120; Bardwell, 100 A.2d at 105. Eagleview, having failed to include the two year loan term in the mortgage note between itself and Iron Worker’s, is bound by its precise terms.

Eagleview also contends that the parties entered into a separate contract whereby Iron Worker’s agreed to extend the term of the loan for one year if Eagleview agreed to the eighteen month loan term in the mortgage note. Eagleview submits that the language in its joint venture agreement with IWS, Inc. which provides for a two year loan term and the language in the construction loan agreement which states that Iron Worker’s “may extend the payment of the principal secured by the ... Mortgage Note ...” is evidence that a separate agreement to extend the loan for one year exists. In support of its argument that evidence of this separate contract for a loan “extension” should be admitted, Eagleview cites Cohn v. McGurk, 330 Pa.Super. 333, 479 A.2d 578 (1984).

In Cohn, supra, decedent provided in her will that appellants, her brother and his wife, were to be her children’s guardians and that sufficient funds to care for her five children would be provided by her estate. Appellee, decedent’s personal representative, allegedly agreed to give appellants sufficient funds to purchase a new house large enough to accommodate their family plus decedent’s children. Relying on their understanding that the money was a gift from the estate, appellants placed a down payment on a new home. However, a dispute arose as to whether the money was a gift or a loan from the estate.

At the time of closing, appellee’s attorney advised appellants that they would be required to execute a mortgage and note in favor of the estate, otherwise the purchase money would not be forthcoming. Appellants signed the loan documents, alleging they did so under duress. The mortgage provided that the money was to be repaid one year from the date of settlement. Appellants defaulted, and judgment was confessed. Appellants filed a petition to open and/or strike the judgment. At the hearing on their petition, appellants sought to offer evidence of their separate agreement with appelleemortgagee, entered into prior to settlement, whereby appellee agreed to give them sufficient funds to purchase a new home pursuant to the decedent’s will. In the alternative, appellants sought to offer evidence of another separate agreement with appellee-mortgagee, entered into contemporaneously with settlement, whereby appellee agreed that funds from the decedent’s estate would be provided to appellants within one year, thereby enabling them to repay the mortgage. The lower court refused to permit them to offer such evidence on the basis of the parol evidence rule. However, we ruled that the parol evidence rule did not bar such evidence of the separate agreements. Cohn, 479 A.2d at 582-583.

Upon review, we conclude that Cohn, supra, is distinguishable from the case at bar. Generally, it is true that the parol evidence rule does not bar evidence of separate contracts entered into prior to or contemporaneously with the contract in question. Cohn, 479 A.2d at 582. In Cohn, supra, evidence of the separate contracts was not offered to alter the terms of the mortgage but, rather, to explain that appelleemortgagee’s refusal to comply with decedent’s will precipitated appellants-mortgagors’ breach of the mortgage agreement, i.e., had appellee given them the funds as agreed, they would have complied with the terms of the mortgage and note. Here, however, Eagleview seeks to introduce evidence of a separate agreement for the sole purpose of varying the terms of the mortgage. The evidence is not offered to explain why Eagleview failed to repay the loan within eighteen months as required but, rather, is offered to explain that the eighteen month repayment period was extended. The alleged separate agreement herein is not, as in Cohn, supra, a true separate contract related to a different subject matter.

Fourth, Eagleview alleges that it entered into the agreement under duress and therefore the parol evidence rule does not apply. Eagleview points out that if it did not execute the mortgage note with the eighteen month loan term, it would have lost the $50,000 down payment on the property to be used in the joint venture. The agreement of sale on that property had no mortgage contingency clause.

Once again, we agree with Eagleview’s general statement of the law that parol evidence would be admissible to demonstrate that they executed the agreement under duress. Cohn, 479 A.2d at 582; 15 P.L.E., Evidence, § 305. However, “duress” alleged in the case sub judice is not of the type contemplated by Cohn, supra, wherein the mortgagors and their family would have lost their down payment on their new residence and, simultaneously, would have been left homeless. See Cohn, 479 A.2d at 583. Presently, Dennis Meinhart, Eagleview’s President, entered into the agreement of sale on the property on January 4, 1988, well before the joint venture agreement was even finalized. He is a sophisticated businessman who at all times relevant hereto was represented by legal counsel. Any problems associated with his signing of the agreement of sale without a mortgage contingency clause were caused Mr. Meinhart himself, not by Iron Worker’s Savings and Loan Association. Consequently, we find Eagleview has failed to produce clear, direct, precise and believable evidence of duress.

In its fifth argument related to the parol evidence rule, Eagleview argues that there was an agreement entered into after the mortgage note was executed to extend the term of the loan. Eagleview correctly states that the parol evidence rule does not bar evidence of a subsequent modification of a written contract. Nicolella v. Palmer, 432 Pa. 502, 508, 248 A.2d 20, 23 (1968); Hamilton Bank v. Rulnick, 327 Pa.Super. 133, 136, 475 A.2d 134, 136 (1984). However, Eagle-view must present clear, direct, precise and believable evidence of its meritorious defense to the confessed judgment, Suburban, 502 A.2d at 232, and our review of the record confirms the lower court’s conclusion that Eagleview has not done so with respect to this alleged “subsequent” agreement to extend the loan.

Eagleview’s President, Dennis Meinhart, in his deposition, testified that when he asked John Whitig, Iron Worker’s President, about a loan extension, Mr. Whitig stated, “Dennis, we are in the deal. We have our own company [IWS, Inc.] to protect. We are going to extend it. Don’t worry about it.” Deposition of Meinhart, p. 66. However, every time Mr. Meinhart subsequently inquired about a loan extension, Mr. Whitig did not state that the loan would be extended but, rather, “always just put [Mr. Meinhart] off.” Deposition of Meinhart, p. 66. From his conversations with Mr. Whitig, Mr. Meinhart was well aware of the possibility of foreclosure if the loan was not repaid within eighteen months. Deposition of Meinhart, p. 66.

Eagleview also points to the minutes of the board meeting of both Iron Worker’s and IWS, Inc., as support for its contention that a subsequent agreement to extend the loan term was reached. However, a review of the minutes of those meetings reveals quite a different result. The minutes of both IWS, Inc.’s and Iron Worker’s board meeting are replete with references to severing their financial ties with Eagleview on September 30, 1989, the date the eighteen month loan term expired. The only references to a two year loan term were made before the mortgage note was signed, i.e., while the joint venture was still in the planning stages.

After reviewing the record, we are convinced that Eagle-view attempted to obtain a loan extension, but the parties never reached an agreement to that effect. In Gloeckner v. Baldwin Township School District, 405 Pa. 197, 200, 175 A.2d 73, 75 (1961), our supreme court stated:

An oral contract changing the terms of a written contract must be of such specificity and directness as to leave no doubt of the intention of the parties to change what they had previously solemnized by a formal document. The oral evidence must be of such a persuasive character that it moves like an ink eradicator across the written paper, leaving it blank so that the parties in effect start afresh in their ... mutual commitments.

The fact that the Iron Worker’s and Eagleview may have discussed a possible extension does not amount to clear, direct, precise and believable evidence that a separate contract for an extension was formed. Suburban, 502 A.2d at 232 (standard of review); cf., Hamilton, supra (oral testimony was inadequate as a matter of law to modify prior contract).

Finally, Eagleview contends it presented sufficient evidence to raise a jury question on whether Iron Worker’s breached its confidential relationship with Eagleview. In Pennsylvania, when the relationship of parties to an agreement is one of trust and confidence, arm’s length bargaining is not presumed, and overreaching by the dominant party for his own benefit is grounds for rejection of the transaction by the aggrieved party. Frowen v. Blank, 493 Pa. 137, 143-144, 425 A.2d 412, 416 (1981); Ruggieri v. West Forum Corp., 444 Pa. 175, 282 A.2d 304 (1971). Once a confidential relationship is shown, it is the obligation of the party attempting to enforce the terms of that agreement to prove that there has not been a breach of that trust. Frowen, 425 A.2d at 416.

Eagleview first submits that Iron Worker’s breached its confidential relationship with Eagleview which arose from the joint venturer status of IWS, Inc., Iron Worker’s alter ego. Eagleview correctly submits that since it and IWS, Inc., are joint venturers, there is confidential relationship between it and IWS, Inc., and they owe each other a fiduciary duty of the utmost good faith. See Snellbaker v. Herrmann, 315 Pa.Super. 520, 529, 462 A.2d 713, 718 (1983). Eagleview contends that IWS, Inc., is the alter ego of Iron Worker’s and, therefore, it too owes Eagleview a fiduciary duty to act with scrupulous honesty. In support of its “alter ego” theory, Eagleview notes that Iron Worker’s and IWS, Inc., share certain board members and officers and that Iron Worker’s is the sole shareholder of IWS, Inc. Eagleview also points to the minutes of the board meetings of Iron Worker’s and IWS, Inc., which indicate that Iron Worker’s performed acts on behalf of IWS, Inc., and visa versa. In other words, Eagle-view asks that it be allowed to attempt to pierce the corporate veil of IWS, Inc., and impute a fiduciary duty upon Iron Worker’s.

As we stated in Village at Camelback v. Carr, 371 Pa.Super. 452, 461, 538 A.2d 528, 533 (1988), aff'd per curiam, 524 Pa. 330, 572 A.2d 1 (1990):

Piercing the corporate veil is admittedly an extraordinary remedy preserved for cases involving exceptional circumstances. As some courts have phrased it, liability for the acts of a corporation may be assessed against the owners thereof wherever equity requires that such be done either to prevent fraud, illegality or injustice or when recognition of the corporate entity would defeat public policy or shield someone from public liability for crime. Zubik v. Zubik, 384 F.2d 267 (3d Cir.1967), cert. denied, 390 U.S. 988, 88 S.Ct. 1183, 19 L.Ed.2d 1291 (1968).

Instantly, Eagleview has not presented clear, direct, precise and believable evidence that the corporate veil should be pierced. The evidence does not reveal that IWS, Inc. is merely a sham corporation, constituting a facade for the operation of Iron Worker’s. Rather, the evidence of record reveals that the corporate formalities have been observed, and, although both companies share some directors and officers, IWS, Inc. acted as a separate corporate entity through the period in question. See Village at Camelbaek, 538 A.2d at 533 (factors to consider when deciding whether to pierce corporate veil). In sum, we concur with the lower court’s conclusion that there was not clear, direct, precise and believable evidence which raised a jury question related to piercing the corporate veil of IWS, Inc.

Eagleview also submits that Iron Worker’s breached its confidential relationship with Eagleview which arose because of the attorney-client relationship between Eagleview’s President, Dennis Meinhart and John R. Larkin, Esquire, solicitor for Iron Worker’s and a member of both Iron Worker’s and IWS, Inc.’s board of directors. Attorney Larkin and Mr. Meinhart were long-time friends and business associates. Attorney Larkin had served as Mr. Meinhart’s legal counsel for many years. In fact, Attorney Larkin approached Mr. Meinhart and proposed the joint venture between Eagleview and IWS, Inc, and Attorney Larkin became the primary contact between Iron Worker’s and Mr. Meinhart.

However, Eagleview fails to consider that Attorney Larkin, very early on in the discussions about forming a joint venture, informed Mr. Meinhart that he had a conflict of interest and, in December of 1987, directed Mr. Meinhart to seek advise from other counsel concerning the joint venture and related legal matters. Mr. Meinhart did discuss all further legal matters with Steven G. Brown, Esquire, and another attorney from Attorney Brown’s law firm, Denis Dunn, Esquire. At all relevant times hereto, Eagleview (and Mr. Meinhart) was represented by and consulted with counsel other than Attorney Larkin on the matter sub judice. Therefore, we agree with the trial court that Eagleview failed to present clear, direct, precise and believable evidence to demonstrate that a confidential relationship was violated because of Mr. Meinhart’s and Attorney Larkin’s previous relationship.

As to the appeal docketed at 283 Philadelphia 1991, we find, in conclusion, that Eagleview has failed to present clear, direct, precise and believable evidence of a meritorious defense to the confessed judgment. Accordingly, we affirm the court’s order which denied Eagleview’s petition to open the judgment by confession.

Turning to the appeal docketed at 284 Philadelphia 1991, we note that the order in question was entered on the day following the denial of Eagleview’s petition to open the confessed judgment. The order denied Eagleview’s motion to compel production of the joint report of examination performed on Iron Worker’s Savings and Loan Association by the Pennsylvania Department of Banking and the Federal Home Loan Bank, Office of Regulatory Functions. It also granted the Pennsylvania Department of Banking’s motion to quash the subpoena for their report.

In its discovery motion, Eagleview alleged that it believed the joint report contained information relevant to Iron Worker’s “refusal to abide by its agreement to extend the repayment period for an additional (12) months.” Motion to Compel Production of Report of Joint Examination, 12/3/90, ¶ 11. The Pennsylvania Department of Banking refused to release the joint report on the grounds that the information was privileged pursuant to the Freedom of Information Act. The lower court denied the motion to compel production of the joint report on the grounds that it was moot, since the court had already denied Eagleview’s petition to open the judgment by confession.

When faced with a similar request for privileged financial information, our supreme court stated, “[U]pon a proper showing and for a legitimate purpose ..., the evidence may be subpoenaed, and the manner and extent of the disclosure of the contents of such records still remains under the discretionary control of the trial judge.” Commonwealth v. Mellon National Bank & Trust Co., 360 Pa. 103, 112, 61 A.2d 430, 435 (1948). Even if we assume that Eagleview’s desire to obtain the report is for a legitimate purpose and, therefore, the Banking Department may be compelled to disclose the contents of the report, we nevertheless do not conclude that Eagleview is entitled to subpoena the report. In supervising discovery, the trial court has broad discretion to take such action as it deems appropriate to insure prompt and adequate discovery. Kerns v. Methodist Hospital, 393 Pa.Super. 533, 574 A.2d 1068, 1073 (1990); Wertz v. Kephart, 374 Pa.Super. 274, 279, 542 A.2d 1019, 1022 (1988). Our review reveals that the trial court did not abuse its discretion in finding that the discovery motion was moot, since Eagleview enjoyed adequate discovery.

During discovery, Eagleview deposed every relevant witness and was provided a multitude of documents, including the minutes to the meetings of the board of directors of IWS, Inc., and Iron Worker’s. Even with that extensive, adequate discovery, Eagleview was unable to produce clear, direct, precise and believable evidence of a meritorious defense. See, Resolution of Appeal 283 Philadelphia 1991, supra. Eagleview now submits that the joint report might contain some reference to the joint venture and the loan agreement which could support its theory of a separate agreement. However, we view this request as nothing more than a “fishing expedition”. Eagle-view has completed an exhaustive search for evidence of a meritorious defense and was unable to find such evidence. There is no evidence of record to suggest that the joint report will support Eagleview’s allegation that there was a separate agreement to extend the loan. In fact, the evidence of record points to the contrary, as it is undisputed that Eagleview executed the mortgage note knowing it had a repayment term of eighteen months. In sum, we find that Eagleview had an adequate opportunity for discovery and, under the circumstances, we cannot say that it was error to deny this discovery request. Cf. Kerns, supra (summary judgment not premature despite outstanding discovery requests, where proposed discovery would not further inquiry); Thomas v. Duquesne Light Co., 347 Pa.Super. 492, 498-499, 500 A.2d 1163, 1167 (1985) (same).

In the appeal at 285 Philadelphia 1991, Eagleview raises a similar issue related to its discovery request for certain documents created by John R. Larkin, Esquire, and its request to reconvene Attorney Larkin’s deposition. With this motion, Eagleview desired to secure additional documents which Attorney Larkin had withheld from Eagleview on the grounds that they were subject to the attorney-client privilege. See Pa.R.C.P. 4003.3 (“discovery shall not include disclosure of the mental impressions of a party’s attorney of his conclusions, opinions, memoranda, notes or summaries, legal research or legal theories”). In essence, Eagleview submits certain, unspecified documents which were prepared by Attorney Larkin while acting in his capacity as a member of the board of directors Iron Worker’s and IWS, Inc., were improperly withheld on the false grounds that those documents were prepared by Attorney Larkin while acting in his capacity as Iron Worker’s solicitor.

The lower court concluded that this discovery motion was also moot given the fact that it had denied Eagleview’s petition to open judgment by confession. We do not believe such a decision to be an abuse of discretion. As we previously found in appeal 283 Philadelphia 1991, the record does not contain clear, direct, precise and believable evidence that an agreement to extend the term of the loan ever existed between Iron Worker’s and Eagleview. Eagleview’s allegation that relevant information might be found via this discovery request is not sufficient to warrant opening the judgment by confession, given the fact the Eagleview was afforded adequate, if not exhaustive, discovery and yet was unable to produce evidence of a meritorious defense. Cf., Kerns, supra (summary judgment not premature despite outstanding discovery requests, where proposed discovery would not further inquiry); Thomas, supra.

At appeal 283 Philadelphia 1991, order denying petition to open/strike judgment by confession is affirmed.

At appeal 284 Philadelphia 1991, order denying motion to compel production of joint report of examiners is affirmed.

At appeal 285 Philadelphia 1991, order denying motion to compel production of documents and reconvene deposition is affirmed.

      . Prior to the existence of Pa.R.C.P. 2959(e), the judgment debtor was required to offer clear, direct, precise and convincing evidence, and the trial court was to weigh the sufficiency of the evidence in that light. However, the requirement of "convincing evidence” has been liberalized to now require only "believable” evidence, thus, eliminating the need to "weigh the sufficiency of the evidence.” Suburban, 502 A.2d at 232, citing First Pennsylvania, 438 A.2d at 606-607.

        . In reaching that decision, we reject Eagleview's argument Iron Worker’s must be bound by the clause in the joint venture agreement which provided for a two-year loan repayment period. The joint venture agreement was with IWS, Inc., not Iron Worker’s.

      . Further, in Cohn, supra, appellants-mortgagors did not even know that they would be required to execute a mortgage until mortgagee’s attorney arrived at the settlement with the mortgage and note.

      . At the board meeting of IWS, Inc., held on July 19, 1989, it was indicated that if Eagleview met certain conditions relating to the number of houses sold and its “loan to value ratio", Iron Worker's would consider providing Eagleview with a one year extension on the three remaining lots. Reproduced Record, p. 90. However, Eagleview does not argue that it met those conditions and, therefore, a new bargain was struck. Rather, Eagleview argues it was always the parties’ understanding that the loan would be extended.

      . Mr. Meinhart, in his deposition, testified that he had, on previous occasions, employed Attorney Dunn as his counsel and that he had a long-standing relationship with the law firm of Petrikin, Wellman, Damico, Carney & Brown, where Attorneys Brown and Dunn practiced.

      . We note that Iron Worker’s did not assert that Eagleview had defaulted upon the loan until January 18, 1990, over three and one-half months after the repayment period expired on September 30, 1989. Further, it was not until April 11, 1990, that Iron Worker's filed a complaint for judgment by confession and entered judgment against Eagleview and IWS, Inc. Thus, Eagleview, in effect, had over two years to repay the loan prior to entry of the judgment by confession.

      . We note that the Pennsylvania Department of Banking moved to quash the subpoena on the grounds that Eagleview failed to comply with the federal administrative guidelines governing disclosure of information related to financial institutions. The Freedom of Information Act, 5 U.S.C.A. § 552, exempts from its mandatory disclosure provisions, information "contained in or related to examination, operation or condition reports prepared by, on behalf of, or for the use of an agency responsible for the regulation or supervision of financial institutions.”

        The report in question clearly falls within this exception, and thus, it is confidential, except for official purposes. Of course, the Office of Thrift Supervision which assumed the duties of the Federal Home Loan Bank Board pursuant to the Financial Institutions Reform, Recovery and Enforcement Act of 1989, may waive the privilege and release the information. See 31 C.F.R. 1.2(c)(5); 12 C.F.R. 510.5. Although Eagleview has initiated the administrative procedure to obtain the report, it nevertheless filed the motion to compel before the OTS had decided whether to release the joint report, in an effort to force disclosure of the report by the Pennsylvania Department of Banking. Since Eagleview failed to exhaust its administrative remedy, it should not be permitted to compel the Pennsylvania Department of Banking via the state court system. Cf. Corning Savings and Loan Association v. Federal Home Loan Bank Board, 571 F.Supp. 396 (E.D.Ark.1983).

      . It should be noted that Attorney Larkin did turn over all documents related to the joint venture which he did not believe to be subject to the attorney-client privilege, and he also offered an explanation for those documents which he retained.


source: Caselaw Access Project

author: POPOVICH, Judge.

license: Public Domain

text:
    622 A.2d 378
    Walter A. PALAC and Bridget M. Sambrick, Appellees, v. James and Kathleen DISANTO, Appellants.
    Superior Court of Pennsylvania.
    Argued Jan. 27, 1993.
    Filed March 25, 1993.

      Leigh P. Narducci, Blue Bell, for appellants.
    William J. O’Brien, II, Philadelphia, for appellees.
    Before McEWEN, POPOVICH and BROSKY, JJ.
   POPOVICH, Judge.

Appeal is taken from a final decree awarding the Plaintiffs/Appellees, through adverse possession, fee simple title to a parcel of land claimed as the Defendants/Appellants’ property. We affirm.

The relevant facts as found below by the Honorable Lawrence A. Brown are as follows: The Plaintiffs-Palac and Sambrick each purchased lots on either side of the 50' x 166.5' parcel owned by William and Petronella Smolinski in 1951 and 1956, respectively.

On July 18, 1957, the Plaintiffs entered into a tripartite agreement with the Estate of Petronella Smolinski and a developer, Melvin L. Savitz. The agreement made reference to the 50-foot strip lying between the Plaintiffs’ properties; to-wit:

WHEREAS, a search by Title Abstract Company of Pennsylvania disclosed that [the Plaintiffs] are the owners of land adjacent to the property in question and that there does exist in their favor a right-of-way over the land to be conveyed, BEGINNING at a point in the center line of Colwell Road, seven hundred feet, measured South forty-four degrees fifty-eight minutes West from a point in line of land now or late of Frank Wilmer, containing in front or breadth on said Colwell Road fifty feet and extending of that width in length or depth South forty-six degrees forty minutes East one hundred sixty-six and five-tenths feet, Being the bed of a proposed road as shown on plan and survey[] made by Will D. Hiltner, Registered Surveyor, in August, 1952____

Additionally, the parties agreed that, in conjunction with the execution of the sale between Smolinski and Savitz or his nominee, the Plaintiffs would, for a consideration of $1.00, execute a quitclaim deed in favor of the Smolinski Estate with respect to all right, title and interest in the described right-of-way. Further, the contract recited that Savitz would, within one year of the date of the agreement and five hundred dollars (10% of which was paid by the Plaintiffs), convey the parcel to the Plaintiffs.

However, by deed dated July 24,1957, the Smolinski Estate conveyed the property to Whitehill Construction Company (Savitz’ nominee), which transferred it to Savbran Construction Company in September of 1957. These transfers included the 50-foot property at issue. Thereafter, in 1967, Jasper & Ruth DiSanto purchased the property from Savbran. They, in turn, sold it to their nephew Raimondo in September of 1973. Upon his death, his widow sold the property to the Defendants/Appellees, James and Kathleen DiSanto.

It was not until 1971, according to the Plaintiffs, that it was learned that the Defendants’ predecessor in title was seeking a variance from the zoning board of Conshohocken, Montgomery County and voiced their opposition on grounds that they owned the property under the terms of the 1957 agreement. Despite their protestations, the variance was granted and the Plaintiffs were advised by the board that resolution of legal ownership of the property would have to occur in a court of law.

It was not until June 22, 1988, that the Plaintiffs had a summons in equity issued seeking to quiet title to the real estate. A complaint followed and alleged that within one year of the July 18, 1957, agreement the Plaintiffs took “possession” of the parcel and continued to exercise control over it by various notorious acts; namely:

We filled in. We brought in top soil, graded it. We put fertilizer, seeding, and I have been maintaining that land all the way through since then to today.
******
The road bed was lower. It had gravel. It was a gravel road bed and we scraped some of the gravel we could out of there and then we brought topsoil, approximately twelve inches. And at the rear of the property, is approximately two feet of dirt.
We graded it to the grade levels of our properties. We brought in fertilizer and fertilized it. We seeded it and maintained it.

N.T. 6/12/91 at 19.

In reply, the Defendants testified to giving the Plaintiffs written notice of trespass in 1969 and 1981, the former of which was denied being received. The Plaintiffs testified that they never ceased and desisted using the parcel as their own, and never saw the Defendants enter onto the lot to assert ownership.

On appeal, the Defendants question whether the trial court erred in finding that the Plaintiffs were entitled to ownership of the property by adverse possession, claiming that the element of “hostility” had not been established.

In Pennsylvania, the elements necessary to prove title through adverse possession were listed in Conneaut Lake Park v. Klingensmith, 362 Pa. 592, 66 A.2d 828, 829 (1949):

It has long been the settled rule of this Commonwealth that one who claims title by adverse possession must prove that he had actual, continuous, exclusive, visible, notorious, distinct, and hostile possession of the land for twenty-one years[.] Each of these elements must exist, otherwise the possession will not confer title[.] [Citations omitted]

Recently, the elements of adverse possession have been refined so as to create a presumption that where “all other elements of adverse possession have been established, hostility will be implied, regardless of the subjective state of mind of the trespasser.” Tioga Coal v. Supermarkets Gen. Corp., 519 Pa. 66, 546 A.2d 1, 5 (1988).

Instantly, we have an abundance of evidence to satisfy all prongs of the adverse possession test: 1) One year after the 1957 agreement, the Plaintiffs took steps, in light of Savitz’ failure to transfer legal title to them, to take possession of the plot; 2) The Plaintiffs had planted a garden in the rear of the lot since 1952, which they continued to cultivate post-1957; 3) Trees were planted on the lot; 4) The gravel road bed was removed to a depth of 12" and replaced with topsoil; 5) The lot was leveled to the height of the adjoining properties; 6) Grass was planted and cut; and 7) A trailer, boat & vehicles were kept on the property.

Moreover, the 1957 agreement divested the Plaintiffs (by quitclaim deed) of any interest they may have thought they had in the property. Thus, when they took possession of the property, they did so against someone they believed was the legal title owner — Savitz. See Sutton v. Miller, 405 Pa.Super. 213, 592 A.2d 83, 91 (1991).

It was not until 1971 that the Plaintiffs learned that the rightful title was possessed by the Defendants’ predecessor. Yet, the Plaintiffs continued in their “hostile” actions by refusing to terminated their “occupation” of the property. In fact, according to the Defendants, the Plaintiffs’ persistent behavior of utilizing the lot as a parking/storage area prompted letters in 1969 and 1981 voicing their displeasure with the occupation of the lot by the Plaintiffs. No removal or cessation was forthcoming from the Plaintiffs, nor did either Plaintiff recall seeing the Defendants or their predecessors come to the situs of the problem to protest the occupation or break the continuation of “possession” by placing any indicia of ownership at the site.

Therefore, we are in accord with the trial court’s finding that “[t]he evidence is uncontroverted that the Plaintiffs have been in actual, continuous, visible and notorious possession of th[e] property” for over twenty-one years. Trial Court Opinion at 5. Moreover, because the Plaintiffs’ possession was “open, notorious, exclusive and continuous, hostility may be implied.” See Tioga, supra. As such, the burden shifts to the Appellants to prove that the use was not hostile, but permissive. See Sutton, supra.

From our review of the Appellant’s testimony, the evidence is not sufficient to sustain their burden of proving “permissive” use by the Plaintiffs. The fact that they had to forward letters to the Plaintiffs voicing their displeasure with the unauthorized use of the lot is indicative that the Plaintiffs’ presence was not authorized. It was at odds with the interests of Defendants and their predecessors in interest.

Consequently, in sum, we hold that the trial court did not err in holding that there was sufficient evidence of adverse possession to establish legal title in the Plaintiffs. Id.

Order affirmed.

McEWEN, J., concurs in the result.

      . Walter A. Palac and Bridget M. Sambrick are the only party-plaintiffs despite their spouses being referenced in the facts of the case — the spouse of the former is deceased while the latter is divorced.

      . Even if, arguendo, the property were “dedicated” as a street, there is no evidence that the property was "accepted” by a governmental body as a roadway within 21 years of its “dedication”. As such, adverse possession is applicable to acquire title. See Pistner Bros. Inc. v. Agheli, 359 Pa.Super. 177, 518 A.2d 838, 839 (1986).

      . Pistner Bros. Inc. v. Agheli, 359 Pa.Super. 177, 518 A.2d 838 (1986), is cited by the Defendants to buttress their request that the lower court’s order on adverse possession be reversed.
      Instantly, unlike Pistner, we have a scenario in which a parcel was used by no one other than the Plaintiffs. In fact, the Plaintiffs removed gravel from the bed of the lot, replaced it with topsoil and seed, leveled the ground to be even with the adjacent properties, planted a garden and trees, mowed the lawn and used the plot for parking their vehicles.
      In Pistner, ‘‘[o]thers were still able to use [the dedicated] Street for its intended purpose.” Id. at 182, 518 A.2d at 840. At bar, once the 50-foot strip of land between the Plaintiffs’ properties was graded and seeded, there was not testimony that it continued to be used to gain access to any of the Smolinski Estate. As a result, we do not find Pistner to be controlling.


author: BROSKY, Judge.

text:
    622 A.2d 381
    Craig E. DAVIS and Karen L. Jensen-Davis v. NORTHRIDGE DEVELOPMENT ASSOCIATES, and Wertz, Hoffman, Parks Realtors, Appellants.
    Superior Court of Pennsylvania.
    Argued Jan. 28, 1993.
    Filed March 25, 1993.

      Scott L. Huyett, Reading, for appellants.

      Lee Sapira, Wyomissing, for appellees.
    Before McEWEN, POPOVICH and BROSKY, JJ.
   BROSKY, Judge.

This is an appeal from the final judgment of the lower court. Appellants present the following issues for our review: (1) whether the trial court erred in refusing to enter judgment notwithstanding the verdict in favor of appellants with regard to appellees’ cause of action; (2) whether the trial court erred in refusing to enter judgment notwithstanding the verdict in favor of appellants with regard to their counterclaim against appellees; and (3) whether the trial court erred in charging the jury, thus necessitating the award of a new trial on both appellees’ cause of action and appellants’ counterclaim. For the reasons set forth below, we affirm the judgment.

Before proceeding to address appellants’ claims, it is necessary to recount the relevant facts of this case. During 1988 and 1989, Northridge Development Associates (NDA) was developing a tract of land, identified as “Northridge,” by constructing residential dwellings thereon. Pursuant to an agreement with NDA, Wertz, Hoffman, Parks (WHP) was appointed as the exclusive Realtor for the housing development and was completely responsible for marketing and selling the lots at Northridge. In October 1988, appellees Craig Davis and Karen Jensen-Davis visited a friend who had purchased a residence in the Northridge community. Appellees were so impressed with the construction of the home and the community that they decided to have a similar structure built on lot no. 20, which adjoined the lot owned by their friend. As a result, appellees placed an initial deposit on the property and executed a formal construction agreement on October 24, 1988.

The construction agreement expressly provided that appellees would purchase the house for a total of $152,490.00 and that settlement was scheduled for June 30, 1989. Although the contract contained a “time is of the essence” clause pertaining to the date of settlement, the agreement permitted the settlement date to be extended upon the mutual written consent of the parties. Pursuant to the contract, NDA could also unilaterally extend the time of settlement in the event that construction delay resulted from weather conditions, acts of God, material or labor shortages, or strikes. After the written agreement was executed, appellees paid the remainder of the deposit in two installments. The total deposit on the property was $15,520.00 which was placed into an interest-bearing escrow account by WHP.

NDA began working on the Davis lot in April, 1989. Because of the steep slope of the land, the lot had previously been back-filled to make the lot level. Soil was then removed from the lot for the construction of the foundation. Due to the particular conditions of the lot, extra excavation and the construction of a sub-foundation were required so that the' home would have a stable foundation. Construction of the sub-foundation and foundation, however, was delayed because of the inordinate amount of rain which fell in the area during the spring months. However, the basement walls were eventually poured in June, 1989. At this time, appellees observed a crack in the walls. Appellees informed appellants of the existence of the crack and were told that it would be repaired.

Because of the delays, appellees realized that the house would not be completed and ready for settlement by June 30, 1989. Appellees attempted to ascertain when settlement could take place but were unable to obtain a definite date from appellants. After observing a continuing lack of progress on the home, as well as continuing mud and water seepage from the cracked foundation, appellees contacted counsel who informed appellants by letter dated July 27, 1989 that appellees were no longer interested in purchasing the home and sought a return of their deposit because of the expiration of the mortgage commitment, the passage of the June 30 settlement date, and the persistence of the cracked foundation. Appellants’ counsel responded by letter dated August 9, 1989 which advised appellees’ counsel that NDA intended to fulfill its obligations under the construction agreement. Appellants further indicated that appellees’ had been notified of appellants’ intent to postpone the settlement, that the crack in the basement had been repaired, and that appellees’ mortgage commitment had been extended. No further communication was exchanged between the parties.

NDA did not finish construction of the house until October. Appellants then notified appellees that settlement would be held on October 17, 1989. Appellants and the mortgage company attempted to hold a settlement on this date. However, appellees did not attend. The home was eventually sold six months later in April, 1990 for the sum of $157,100.00.

On October 12, 1989 appellees instituted this action against appellants to recover their deposit and damages resulting from appellants’ failure to have the house fully constructed and ready for settlement by June 30. Appellants filed an answer and a counterclaim in which they sought to recover either appellees’ deposit or the actual losses sustained as a result of appellees’ refusal to purchase the house. A jury trial was held in August, 1991 following which the jury found in favor of appellees and awarded them $2,921.65 in damages. The trial court later molded the verdict to include the return of appellees’ deposit. Consequently, appellees were awarded a total sum of $20,444.08. Appellants filed timely posMaial motions which the trial court denied. The verdict was then reduced to final judgment. This timely appeal followed.

Appellants first contend that the trial court erred in refusing to grant their motion for judgment notwithstanding the verdict with regard to four counts of appellees’ complaint. Appellants further argue that their motion for judgment notwithstanding the verdict should have been granted with respect to their counterclaim. Our scope of review of a motion for judgment notwithstanding the verdict has been set forth as follows:

The entry of judgment notwithstanding a jury verdict to the contrary is a drastic remedy. A court cannot lightly ignore the findings of a duly-selected jury. Thus, in considering a motion for judgment n.o.v., the court must view the evidence and all reasonable inferences that arise from the evidence in a light most favorable to the verdict winner. The court can enter judgment n.o.v. only if no two reasonable persons could fail to agree that the verdict is improper. In deciding a motion for judgment n.o.v. we consider all evidence actually received, [regardless oí] whether the trial court’s rulings thereon were correct or incorrectf, since] [t]he erroneous receipt of evidence is corrected by granting a new trial.

Niles v. Fall Creek Hunting Club, Inc., 376 Pa.Super. 260, 264-265, 545 A.2d 926, 928-929 (1988) (en banc) (citations and quotation marks omitted). Accord Perry v. Booth Maternity Center (1993), slip op. at 3-4, Nos. 01341 and 01342 Philadelphia 1992, 1993 WL 49803 (filed 3/1/93). We will examine appellants’ arguments in accordance with this standard.

As indicated above, Count I was premised upon appellants’ failure to hold settlement on June 30, 1989 in conformity with the “time is of the essence clause” contained in the construction agreement. To ascertain whether judgment notwithstanding the verdict should have been granted on this count, it is necessary to set forth the relevant legal principles. Our Supreme Court has recognized that “even though the time fixed in an agreement for settlement is stated to be of the essence of the agreement, it may be extended by oral agreement or be waived by the conduct of the parties, and where the parties treat the agreement as in force after the expiration of the time specified for settlement it becomes indefinite as to time and neither can terminate it without reasonable notice to the other.” Warner Company v. MacMullen, 381 Pa. 22, 29, 112 A.2d 74, 78 (1955). Accord Cohn v. Weiss, 356 Pa. 78, 81-84, 51 A.2d 740, 742-743 (1947). Nevertheless, “[w]here time of settlement is made the essence of the contract for sale of real estate, it still remains the essence of the contract, although a definite extension of time has been granted.” Wasserman v. Steinman, 304 Pa. 150, 154-155, 155 A. 302, 303 (1931). Moreover, “it is well settled that even where time is not of the essence, the time for completion is not unlimited and must be reasonable under the circumstances.” Commonwealth v. Pendleton, 480 Pa. 107, 113, 389 A.2d 532, 535 (1978). See also Glover v. Grubbs, 367 Pa. 257, 259, 80 A.2d 75, 76 (1951) (providing that where no time is fixed for settlement, it is presumed that a reasonable time was intended). “Reasonableness is a question for the fact-finder and [is] determined by consideration of all existing circumstances.” Reagan v. D & D Builders, Inc., 277 Pa.Super. 140, 143, 419 A.2d 700, 702 (1980). It is also well settled that a buyer’s tender of performance is excused where the seller has expressly repudiated the contract or has indicated that he is unwilling or unable to perform. See, e.g., Donnelly v. Suess, Inc. v. Lilley, 12 Pa.D. & C.2d 383, 386, 74 Montgomery County Law Reporter 298, 301 (1957), affirmed per curiam on the basis of the trial court opinion, 393 Pa. 32, 33, 142 A.2d 284, 286 (1958); Glover v. Grubbs, 367 Pa. at 259, 80 A.2d at 76; Sunseri v. Mancuso, 362 Pa. 161, 163-164, 66 A.2d 830, 831 (1949); Phillips v. Tetzner, 357 Pa. 43, 47, 53 A.2d 129, 131-132 (1947); Messina v. Silberstein, 364 Pa.Super. 586, 592-593, 528 A.2d 959, 961-962 (1987), allocatur denied, 518 Pa. 619, 541 A.2d 746 (1988).

Mindful of these considerations, the record reveals that in May 1989, appellees became concerned that the house would not be completed by June 30 and that their mortgage commitment would expire. N.T., Vol. I, 8/12/91-8/15/91 at 140-141. Appellees discussed these matters with Mike Anderson, an associate of WHP who acted as NDA’s agent in the negotiation of the construction agreement and subsequent discussions with appellees. Mr. Anderson informed appellees that the house would not be completed and ready for settlement by June 30. Id. at 188 and 191-192. Appellees attempted to ascertain when the residence would be finished but were unsuccessful in obtaining any response from appellants. Id. at 142, 144, 145 and 188-189. Appellees indicated that they would have accepted the house provided that it was completed within a reasonable time, i.e., three or four weeks. Id. at 142, 145 and 190. Aside from the construction of the foundation in the latter part of June, appellees did not observe any further progress in the construction of the home. Id. at 134-135, 136 and 142. However, other residences in Northridge were completed and settlement was made thereon during the same time period that appellees’ house was under construction. Id. at 73-47. Through the testimony of its principal, Douglas Young, NDA indicated that it could construct a dwelling in less than ninety (90) days under normal circumstances. Id. at 103-104. Douglas Young also testified that settlement could not have occurred by July 27, 1989. Id. at 116-117.

Based on this evidence, appellants were not entitled to judgment notwithstanding the verdict with regard to count I. In this case, appellees were at all times ready and willing to tender performance, although a tender by appellees would have been futile since appellants were admittedly unable to fulfill their obligations under the contract at any time prior to July 27. Further, appellees would have been willing to accept a postponement of the settlement date provided that their house would be completed within a “reasonable” period of time and that their mortgage commitment would be honored. They therefore attempted to discover when they could expect the house to be completed and settlement thereon to occur. Appellants were indifferent to appellees’ inquiries and put forth absolutely no effort between June 30 and July 27 to continue construction of appellees’ residence even though they were able to complete construction on other homes in the development and proceed to settlement thereon. The parties’ conduct thus evidences a lack of mutual agreement to waive or extend the settlement as well as a lack of intent to treat the contract as though it remained in force after the expiration of the settlement date. Compare Cohn v. Weiss, 356 Pa. at 79-81, 51 A.2d at 741-742 (in which the agreement of sale contained a time is of the essence clause, but the parties agreed to several extensions of the settlement date and expressed their willingness to enforce the contract after the expiration of the initial settlement date). Under the circumstances present here, i.e., the lack of a mutual agreement regarding an extension of the settlement date and the lack of intent to enforce the contract after the settlement date expired, appellants cannot avail themselves of the rule set forth in Cohn v. Weiss to justify their own inexcusable and material breach in failing to have the house fully constructed and ready for settlement by the date set forth in the contract. Consequently, appellants are not entitled to have judgment notwithstanding the verdict entered in their favor as to the first count of appellees’ complaint.

With regard to count II, we note that neither of the parties presented evidence of a defect in title. However, we note that appellees bore the burden of establishing a defect in title in support of their action to rescind the contract. See Groskin v. Knight, 290 Pa. 274, 279, 138 A. 843, 844 (1927) (providing that the purchaser had the burden of showing that he had the right to rescind the agreement based on alleged defects in title). Because appellees did not offer any proof of the alleged defects in title, they failed to sustain their burden of proof. Accordingly, the trial court erred in refusing to grant appellants’ request for a non-suit as to count II. This error, however, was later rectified since the question of whether appellants breached the contract by failing to convey good and marketable title was never submitted to the jury and did not form any part of the jury’s verdict. See N.T., Vol. II, 8/12/91-8/15/91 at 864 (in which the trial court refused appellees’ proposed jury instructions relating to defects in title). Appellants’ motion for judgment notwithstanding the verdict as to count II was therefore properly denied.

Appellants further challenge the trial court’s failure to enter judgment notwithstanding the verdict with regard to counts III and IV of the complaint. As explained above, these counts respectively sought recovery based on NDA’s breaches of the express contractual warranties and the implied warranty of habitability by tendering a house with a cracked foundation. Appellants assert that they are entitled to judgment in their favor because the warranties would only become effective upon actual transfer of the home to the purchasers. Pursuant to the position suggested by appellants, a buyer would be required to purchase a defective home and institute action to recover for the damages. We reject appellants’ approach as it is illogical and contrary to the law of Pennsylvania.

In this case, the construction contract expressly provided that the workmanship, materials and construction of the residence would be warranted for a period of one year from the date of settlement. Plaintiffs’ Exhibit 1 (Construction Agreement, dated 10/24/88, and Builder’s Warranty), at 1 and 9. Although the warranty became effective upon the purchaser’s acquisition of the property at the time of settlement, it is ludicrous to suggest that the house need not comply with the requirements of the warranty prior to settlement and that the house could be tendered to the purchaser in such condition. Rather, it is implicit in the agreement that the builder will construct a house in accordance with the express warranties and that a house, so constructed, will be tendered to the purchaser at the time of settlement. This court has reached similar conclusions with regard to the implied warranties of habitability and construction in a reasonably workmanlike manner by recognizing that such warranties arise at the time the construction contract is executed. Groff v. Pete Kingsley Building, Inc., 374 Pa.Super. 377, 385, 543 A.2d 128, 132 (1988), appeal dismissed as having been improvidently granted, 523 Pa. 421, 567 A.2d 1041 (1990). Where the residence does not conform to either the express or implied construction warranties, the purchaser is not required to accept the dwelling in such condition and may elect to rescind the contract.

In this case, there is no question that appellants breached both the express and implied warranties. Appellees observed the crack in the foundation in June. N.T., Vol. I., 8/12/91-8/12/91 at 136-137, 139 and 205. Appellees apprised appellants of the crack and were told that it would be repaired. Id. at 137-138. However, appellants initial attempt to repair the crack was unsuccessful and the house continued to leak. Id. at 56. In fact, water and mud stains were observed by appellees and were photographed as late as the time of the attempted settlement in October, 1989. Id. at 150-151 and Plaintiffs’ Exhibits 17-24 (Photographs of the cracks and water/mud stains filmed at appellees’ behest in late October). Douglas Young even conceded that it was “not normal” to have cracks in the foundation of a residence. Id. at 115-116. A residence with a cracked and leaking foundation, which had not been repaired as of the time of settlement, clearly was not constructed in accordance with either the express or implied warranties. Under these circumstances, the trial court properly denied appellants’ motion for judgment notwithstanding the verdict with respect to the third and fourth counts.

In conjunction with their challenge to count IV, appellants further argue that they are entitled to judgment notwithstanding the verdict insofar as recovery on the basis of negligence is sought in this count. This claim is without merit. At trial, appellees proceeded on the theory that appellants had breached the expressed and implied warranties and did not attempt to prove negligence. N.T., Vol. I., 8/12/91-8/12/91 at 215. The trial court similarly noted that the case did not involve negligence. Id. The jury was not instructed on negligence principles, and the question of whether appellants were negligent was never submitted to the jury for consideration and did not form any part of the verdict. Accordingly, appellants were not entitled to judgment notwithstanding the verdict on this basis.

Appellants next argue that the trial court erred in refusing to enter judgment notwithstanding the verdict on their counterclaim. Appellants concede in their argument that their ability to recover on their counterclaim is contingent upon a favorable resolution of their first issue, ie., that they are entitled to a judgment notwithstanding the verdict that they did not breach the construction agreement with appellees. As we have found that appellants are ineligible for relief on their initial claim, their arguments relating to their counterclaim necessarily fail.

In their third and final claim, appellants assert that the trial court erred in instructing the jury with regal'd to appellees’ cause of action and appellants’ counterclaim. In reviewing the trial court’s instructions to the jury, we apply the following standard:

Where the motion for a new trial is based upon the sufficiency of the jury charge, we must examine the charge in its entirety against the background of the evidence to determine whether error was committed. If an appellate court concludes that the charge was erroneous, a new trial will be granted only if the jury charge might have prejudiced the appellant. A new trial will be granted even though the extent to which the appellant had been prejudiced is unascertainable. An alleged inadequacy in jury instructions constitutes trial error if the jury was probably misled by what the trial judge said or there is an omission in the charge which amounts to fundamental error.

Ottavio v. Fibreboard Corp., 421 Pa.Super. 284, 294-295, 617 A.2d 1296, 1301-1302 (1992) (en banc) (per curiam,) (citations omitted).

Appellants assert that the trial court’s instructions were confusing and erroneous. We have reviewed the trial court’s jury instructions in accordance with the above standard and conclude that they adequately, clearly and correctly set forth the applicable principles of law which we previously discussed with regard to appellants’ request for judgment notwithstanding the verdict. N.T., Vol. II, 8/12/91-8/15/91 at 4334134 and 4354137. Appellants are therefore ineligible for relief on these grounds.

Judgment affirmed.

      . The issues, as phrased in appellant's statement of the questions, are unduly prolix and confusing. We have accordingly reformulated the issues in the manner set forth above.

      . Appellees were husband and wife at the time they entered into the construction agreement. However, Mr. and Mrs. Davis formally separated in September, 1989 and were divorced in May, 1990.

      . The agreement was between NDA and appellees. However, employees of WHP, as NDA’s agent, submitted the agreement to the parties. WHP also drafted the agreement and negotiated the terms of the agreement, such as the settlement date or changes in the appearance of the home with the prospective buyers.

      . The base cost of the house was $150,990.00. NDA had a policy pursuant to which it would not construct two identical dwellings next to each other. Because appellees wanted a home which was identical to that owned by their friend and had purchased a lot next to their friend, appellees were required to alter the front of their home so that it would have a different appearance. The cost of these modifications was $1,500.00. Consequently, the purchase price increased to $152,-490.00. Additional charges in the amount of $7,399.26, which arose out of further changes in the construction of the house and the installation of upgraded fixtures such as carpeting, siding and lighting, were subsequently included to bring the final cost of the home to $159,-889.26.

      . By the time of trial, the account contained $17,522.43.

      . At the time appellees initially advised appellants that they were no longer interested in purchasing the home, appellees also contacted the carpet, cabinet, siding, lighting and other suppliers to cancel their orders for the upgraded items which they had agreed to purchase. Despite appellees’ cancellation, NDA nevertheless installed the upgraded items in the home.

      . NDA calculated its total losses to be $15,844.90.

      . Appellants indicate in their brief that they are appealing from the order of May, 1992 which denied their motions for post-trial relief. Appellants’ Brief at 2 (text of the order in question). Appellants are in error as an order denying a motion for post-trial relief is interlocutory and unappealable. See, e.g., Note, Pa.R.A.P., Rule 301, 42 Pa.C.S.A. However, appellants correctly stated in their notice of appeal that this is an appeal from the final judgment entered on June 3, 1992. We will therefore disregard appellants' misstatement as the record clearly shows that this is an appeal from a final judgment which is properly before this court.

      . Appellees' complaint was divided into five counts, the first four of which concerned NDA. In the first count, appellees' sought recovery of their deposit and compensation for all of the expenditures resulting from NDA’s failure to convey the home on June 30, 1989. Thus, count I was premised upon NDA’s breach of contract. Count II of the complaint alleged that NDA had breached the agreement by failing to provide good and marketable title to the premises. In count three, appellees' sought recovery based on NDA’s breach of the express warranties in the construction agreement in constructing the premises with a cracked and leaking foundation. Count IV sought recovery for the same defects, however, this count was based on NDA’s breach of the implied warranties of habitability and construction in a reasonably workmanlike manner. Count V, which was directed at WHP, requested that WHP return the deposited funds held in the escrow account based on NDA’s alleged breaches of the agreement.

      . Appellees’ mortgage commitment letter expressly provided that the mortgage commitment would expire on June 30, 1989. Plaintiffs’ Exhibit 9 at 1 (Commitment Letter issued by Meridian Mortgage, dated 1/24/89). The commitment letter further stated that at the option of the lender, the commitment could be extended at either the same terms or at the current market rate. Id. However, the commitment letter added that the lender would attempt to offer a comparable product if settlement did not occur prior to the expiration date of the commitment. Id. at 2.

      . Douglas Young was the president of Douglas Young Builders and Northridge Development Corporation. Northridge Development Corporation was a general partner of NDA. NDA contracted with Douglas Young Builders to construct the homes in the Northridge Development.

      . After the close of appellees’ case, appellants requested that an involuntary nonsuit be entered with respect to counts I-IV of the complaint. N.T. Vol. I, 8/12/91-8/15/91 at 211-214. In arguing the motion, each of the parties asserted that the other bore the burden of proving a defect in title with respect to count II of the complaint. Id. at 211-212. The trial court declined to definitively resolve the dispute and denied the motion. Id. at 212.