author: NEALON, J.,

text:
    Peoples Neighborhood Bank v. Layo

      C.P. of Lackawanna County,
    No. 12 CV 6669

      Andrew J. Katsock, III, for plaintiff.

      George A. Reihner and Danielle M. Mulcahey, for defendants.
    Oct. 22, 2014
   NEALON, J.,

I. PROCEDURAL HISTORY

OnNovembef 13,2012, plaintiff, PeoplesNeighborhood Bank, formerly Peoples National Bank (“Peoples Bank”), instituted this ejectment action against defendant, Sheila M. Layo (“Layo”), seeking to evict her from a townhouse unit at 2916 McCarthy Street, Scranton, on the basis that Peoples Bank is the “record owner” of that property as a result of a sheriff’s deed that was duly recorded on April 27, 2012. (Docket entry no. 1 at ¶¶ 3-4). In her responsive pleading to the ejectment complaint, Layo asserted a new matter pursuant to Pa.R.C.P. 1030, and averred that she was never “provided with notice of the mortgage foreclosure action or sheriff’s sale as required by Pennsylvania law.” (Docket entry no. 11 at ¶24). Layo further alleged that Peoples Bank does not have paramount title to the property since the sheriff’s sale was “a nullity and void” due to Peoples Bank’s failure to comply with “the affidavit, notice and posting requirements of Pa.R.C.P. 3129.1 through 3129.3.” (Id. at! 13).

In addition, Layo has advanced a counterclaim under Pa.R.C.P. 1031 in which she incorporates the allegations and causes of action that she set forth in an earlier civil suit, which she commenced against Peoples Bank on August 16, 2012. (Id. at ¶¶ 36-40). Peoples Bank filed preliminary objections to Layo’s counterclaim, and by memorandum and order dated October 17, 2013, visiting Senior Judge Harold Kane overruled those preliminary objections. (Docket entry nos. 13-16). On April 11, 2014, Peoples Bank sought leave of court to certify this case for trial over Layo’s objection, and on April 11, 2014, Judge Robert A. Mazzoni granted Peoples Bank’s motion pursuant to Lacka. Co. R.C.P. 214(d). (Docket entry nos. 20-22). On June 2, 2014, the Lackawanna County Court Administrator assigned this matter to the undersigned and scheduled a status conference for July 14, 2014. (Docket entry no. 25).

By order dated July 14,2014, this matter was scheduled for a non-jury trial on September 15,2014, and September 16,2014. (Docket entry no. 26). On those dates, testimony was received from Paul Walsh, Sheila Layo, Steven Stranburg, and Steven Yankowski, and various exhibits were introduced into evidence. The parties filed their proposed findings of fact and conclusions of law on September 22,2014, and later submitted a joint stipulation on October 3, 2014. (Docket entry nos. 31-32, 34). The transcripts of the non-jury trial were completed and filed on October 20,2014, and this matter is ripe for a decision. (Docket entry nos. 35-36).

In a bench trial, the trial judge acts as fact-finder and has the authority to make credibility determinations and to resolve conflicts in the evidence. Haan v. Wells, 2014 WL 5018462, at *9, 12 (Pa. Super. 2014); Rizzo v. MSA. Inc., 18 Pa. D. & C. 5th 233, 244-245 (Lacka. Co. 2010), aff’d, 32 A.3d 830 (Pa. Super. 2011). When serving as the finder of fact, the trial judge is “in the sole position to observe the demeanor of the witnesses and assess their credibility.” Hirsch v. EPL Technologies, Inc., 910 A.2d 84, 88 (Pa. Super. 2006), app. denied, 591 Pa. 727, 920 A.2d 833 (2007). As a result, the trial judge in a non-jury trial is free to “believe all, part or none of the evidence presented.” Ruthrauff, Inc. v. Ravin. Inc., 914 A.2d 880, 888 (Pa. Super. 2006), app. denied, 599 Pa. 711, 962 A.2d 1197(2008).

Additionally, “¡j judicial notice can be taken of pleadings and judgments in other proceedings where appropriate.” Krenzel v. Southeastern Pennsylvania Transportation Authority, 840 A.2d 450, 454 n.6 (Pa. Cmwlth. 2003). “This is particularly so where, as here, the other proceedings involve the same parties.” Lycoming County v. Pennsylvania Labor Relations Bd., 943 A.2d 333, 335 n. 8 (Pa. Cmwlth. 2007). A court may also take judicial notice of established matters in publicly-available dockets for cases filed in its own jurisdiction. See Deyarmin v. Consolidated Rail Corp., 931 A.2d 1, 15 n. 10 (Pa. Super. 2007), app. denied, 597 Pa. 706, 948 A.2d 805 (2008). The factual findings set forth in Section II below are based upon the trial evidence, which has been deemed to be credible and relevant, as well as those matters which may be judicially noticed.

II. FINDINGS OF FACT

OnOctober25,2007, PeoplesBankloanedMountainside Commons, LLC (“Mountainside”) $1,000,000.00 to finance the construction of seven townhouse units on the 2900 block of McCarthy Street in Scranton. Peoples Bank’s loan to Mountainside was secured by an “Open-End Mortgage” granting Peoples Bank a security interest in the property at 2900 McCarthy Street, including any structures and improvements erected on that land. Richard Hallock (“Hallock”) acted as the “settlement agent” at the Peoples Bank — Mountainside closing, as well as the title insurance representative for the transaction. Following the closing, Hallock filed the Peoples Bank — Mountainside “Open-End Mortgage and Security Agreement” with the Lackawanna County Recorder of Deeds on November 2, 2007.

After Mountainside completed the construction of townhouse Unit 1 on 2916 McCarthy Street, Layo entered into an agreement of sale to purchase Unit 1 from Mountainside for the sum of $287,500.00. In connection with her purchase of townhouse Unit 1, Layo agreed to make a down payment of $28,750.00 and to borrow the remaining $258,750.00 from Peoples Bank. Under her adjustable rate note dated August 20, 2008, Layo agreed to repay her $258,750.00 loan by making 360 monthly payments to Peoples Bank beginning on September 20, 2008. In order to consummate that transaction, Peoples Bank and Mountainside were required to execute a partial release agreement releasing townhouse Unit 1 and its accompanying land from the Open-End Mortgage and Security Agreement that was filed on November 2, 2007.

On August 20, 2008, Mountainside, Layo and Peoples Bank participated in a closing with respect to Layo’s purchase of townhouse Unit 1 for the contract sales price of $287,500.00. Layo also paid settlement charges totaling $8,159.25, comprised of $250.00 for document preparation, $1,798.75 for title insurance with Penn Title Insurance Company (“Penn Title”), $200.00 for Penn Title insurance endorsements 100,300, 8.1 and 7.10, $35.00 for CPL, $115.50 for the recording fees for the deed, mortgage and partial release of open-end mortgage, $5,750.00 for her share of the realty transfer tax, and $14.00 for PIN certification. From the $287,500.00 purchase price that was paid to Mountainside, $150,000.00 was deducted for its “payoff of first mortgage loan” with Peoples Bank, and $5,750.00 was allocated to pay Mountainside’s portion of the realty transfer tax. The Mountainside — Layo settlement statement identifies Hallock as the settlement agent for the closing and the title insurance agent for Penn Title.

The individuals in attendance at the MountainsideLayo closing who later testified during the non-jury trial, did not provide sufficiently specific testimony as to the “delivery” of the deed to Layo. Layo testified that she signed her promissory note and mortgage with Peoples Bank, (Transcript of Proceedings (“T. P.”) on 9/15/14 at pp. 49-50), but did not see any individual take possession of the deed, nor does she know who left the closing with the deed. (Id. at pp. 67, 79). Mountainside’s principal, Steven Yankowski, stated that he recalled signing the deed and leaving it on the conference room table, but does not know who took custody of the deed. (T. P. on 9/16/14 at pp. 36, 48-49, 51). Peoples Bank’s former branch manager, Steven Stranburg, merely recalled observing Hallock take the mortgage and deed at the conclusion of the closing. (Id, at pp. 4, 9, 20-21). No witness provided any testimony as to whether Hallock was instructed or agreed to provide the deed to Layo on August 20,2008, or on some future date.

Unbeknownst to Layo and Peoples Bank, Hallock did not file the Peoples Bank — Mountainside partial release of open-end mortgage, the Mountainside — Layo deed, or the Peoples Bank — Layo mortgage, and instead absconded with the settlement funds that were provided to him to purchase Layo’s title insurance and pay the transfer taxes, as well as the recording fees for the deed and mortgage. According to the joint petition that was attested to and submitted by Hallock and the Office of Disciplinary Counsel in the disciplinary action instituted against Hallock in 2010, Hallock was to procure an owner’s title insurance policy for Layo and a lender’s title insurance policy for Peoples Bank from Penn Title. Office of Disciplinary Counsel v. Hallock, supra, “joint petition in support of discipline on consent pursuant to Pa.R.D.E. 215(d)” at ¶35 (admitted as plaintiffs Exhibit No. 12). Subsequent to the closing on August 20, 2008, “Peoples Bank was unsuccessful in attempting to obtain a copy of the lender’s policy and related materials that Mr. Hallock was to have secured...as agent for Penn Title,” and “[i]n mid-2009, Peoples Bank contacted Penn Title and contended that the Layo transaction had not closed, even though Peoples Bank had provided the financing.” Id. attf38-39.

Within twelve months of the Mountainside — Layo closing, Steven Yankowski of Mountainside was advised by Peoples Bank’s loan officer, Paul Walsh, that the Mountainside — Layo deed had not been filed and recorded with the Lackawanna County Recorder of Deeds. Mr. Walsh originally told Mr. Yankowski that Peoples Bank was “working on it,” but later stated that Layo’s unrecorded deed was “not [Peoples Bank’s] problem.” In late 2010, Layo explored the prospect of refinancing her loan at a lower interest rate with a different lender, and in the process, was informed by that lender that the Mountainside — Layo deed had not been filed with the Lackawanna County Recorder of Deeds. Upon contacting Peoples Bank regarding the absence of a recorded deed, Layo was directed to Peoples Bank’s counsel who advised Layo that Peoples Bank was “working on it.” While the deed and mortgage remained unrecorded, Peoples Bank continued to accept and deposit the monthly mortgage payments that were forwarded to it by Layo.

On July 6, 2011, Peoples Bank forwarded a certified mail letter to Mountainside stating that Mountainside was “in default for non-payment” of its note and mortgage with Peoples Bank, and that Peoples Bank had “elected to accelerate the entire principal with interest thereon.” Peoples Bank demanded “immediate payment” of the sum of “870,145.95, including principal of $848,988.18, interest of $20,517.83, late charges of $649.94, plus additional interest from July 5, 2011, in the sum of $144,349 [sic] per day until the date of payment in full.” Mountainside failed to tender immediate payment of that aggregate amount to Peoples Bank.

On July 26, 2011, Peoples Bank filed a “complaint for confession of judgment” against Mountainside pursuant to the terms of the Peoples Bank — Mountainside note and mortgage “covering premises known as lands along McCarthy Street,” as described in the “Open-End Mortgage and security agreement” that was recorded on November 2, 2007. The property described in the recorded open-end mortgage had included townhouse Unit 1 that was later purchased by Layo on August 20, 2008, following the execution of a partial release of that open-end mortgage by Peoples Bank and Mountainside. Although Layo was in possession of townhouse Unit 1 on July 26,2011, and Peoples Bank sought to foreclose upon and gain possession of townhouse Unit 1 in the action that it instituted against Mountainside, Peoples Bank did not serve Layo with original process in that litigation. (Docket entry no. 4 in No. 11 CV 4523).

On October 28, 2011, Peoples Bank filed a “motion to permit entry onto property” in No. 11 CV 4523 seeking access to the McCarthy Street property described in the open-end mortgage, and obtained an order on that date granting Peoples Bank authority to enter, inspect and winterize “the property known as Mountainside Commons, 2900 McCarthy Street.” (Docket entry no. 2 in No. 11 CV 4523). On November 9, 2011, Peoples Bank filed a praceipe for writ of execution against Mountainside in the amount of $870,145.95, and had the mortgaged property scheduled for a sheriff’s sale on February 7,2012. (Docket entry nos. 4-6 in No. 11 CV 4523). In anticipation of that sheriff’s sale, Peoples Bank served written notice of the scheduled sale upon Mountainside, Mountainside’s three principals, Steven Yankowski, Ronald Heurlin and Tanya E. Heurlin, the tenants of three Mountainside townhouse units, Dinesh K. and Kiran Sachdeva, 2910 McCarthy Street, Marion McNulty, 2912 McCarthy Street, and Mary Beth Zazzera, 2914 McCarthy Street, and Mountainside’s known creditors or lienholders, Double M General Contractors, Inc., Scranton Sewer Authority, Lackawanna County Tax Claim Bureau, Lackawanna County Single Tax Office, City of Scranton Refuse Collection Department, Northeast Revenue Service, LLC, and NCC Commonwealth Financial. (Docket entry no. 34; Docket entry no. 10 in No. 11 CV 4523). Notwithstanding the fact that Layo had an unrecorded interest in the property that could be affected by the scheduled sheriff’s sale, and that Peoples Bank had knowledge of Lay o’s unrecorded interest in that property, Peoples Bank did not similarly serve Layo with thirty (30) days written notice of the scheduled sheriff’s sale. Nor did Peoples Bank have the sheriff post townhouse Unit 1 with a handbill containing the sheriff’s sale information required by Pa.R.C.P. 3129.2(b).

After Steven Yankowski filed a motion for a temporary stay of the sheriff’s sale scheduled for February 3, 2012, the sheriff’s sale was postponed and rescheduled for March 20, 2012. (Docket entry nos. 11, 14 in No. 11 CV 4523). Two days before the rescheduled sheriff’s sale, Layo first became aware of the sheriff’s sale upon being advised of the same by a health care worker at a nursing home located on McCarthy Street. Following consultation with her brother, who had been a contractor for the Mountainside townhouse development project, Layo filed a pro se lis pendens against Mountainside and Peoples Bank on March 19, 2012, with respect to the property located at 2916 McCarthy Street. (Docket entry nos. 1-2 in 12 CV 1771).

On March 19, 2012, Peoples Bank and Steven Yankowski filed a stipulation that was executed by their counsel in the Bank’s foreclosure action against Mountainside, and agreed to permit the scheduled sheriff’s sale to proceed forward on March 20,2012, subject to the terms and conditions of their stipulation. (Docket entry no. 14 in No. 11 CV 4523). In the stipulation, Peoples Bank agreed that “[a] sherriff’s (sic) execution sale is scheduled in this matter for March 20, 2012, on real property located on McCarthy Street in Scranton, which is improved with six (6) townhouse units,” and that Peoples Bank and Mr. Yankowski had stipulated “that the sherriff’s (sic) sale scheduled in the above-captioned matter scheduled for March 20, 2012, shall be permitted to go forward.” (Id. at ¶10-11) (emphasis added). The sheriff’s sale was conducted on the following day, and in consideration of Peoples Bank’s payment of $4,862.42 representing county taxes and sheriff’s sale costs, a sheriff’s deed was issued to Peoples Bank for the McCarthy Street property on April 23, 2012. (Docket entry nos. 15-16 in No. 11 CV 4523). The sheriff’s deed conveying that land to Peoples Bank was filed with the Lackawanna County Recorder of Deeds on April 27, 2012. (Joint-Pre-Trial Order filed as Docket entry no. 28 at ¶ 2(i)). Peoples Bank thereafter sold townhouse units 2, 3, 4, 5, 6 and 7 to third parties. (Id. at 12Q)).

Subsequent to the sheriff’s sale of the McCarthy Street property on March 20,2012, Layo ceased making monthly mortgage payments to Peoples Bank. Although Peoples Bank was cognizant of the fact that the Mountainside — Layo deed and Peoples Bank — Layo mortgage had not been recorded, it nonetheless forwarded a “Notice of Intention to Foreclose Mortgage” to Layo on May 1, 2012. (Docket entry no. 1, Exhibit I in No. 12 CV 5007). In its notice to Layo, Peoples Bank advised Layo that her mortgage was “in SERIOUS DEFAULT because you have not made your monthly payments,” and that if Layo did not cure the default within thirty days, Peoples Bank would “exercise [its] right to accelerate the mortgage payments.” (Id. at p. 1) (emphasis in original). Peoples Bank stated that “[i]f full payment of the amount of default is not made within thirty (30) days, we also intend to instruct our attorneys to start a lawsuit to foreclosure your mortgaged property,” which, if foreclosed, “will be sold by the Sheriff to pay off the mortgage debt.” (Id.) (emphasis added).

In its notice dated May 1, 2012, Peoples Bank further represented to Layo that if a foreclosure proceeding was commenced against her, “you still have the right to cure the default and prevent the sale at any time up to one hour before the Sheriff’s sale.” (Id. at p. 2). Peoples Bank informed Layo “that the earliest date that a Sheriff’s sale could be held would be approximately July 3,2012.” (Id.). Finally, Peoples Bank admonished Layo “that a Sheriff’s sale will end your ownership of the mortgaged property and your right to remain in it,” and that if she “continue[d] to live in the property after the Sheriff’s sale, a lawsuit could be started to evict you.” {Id.) (emphasis added). Peoples Bank has never instituted a mortgage foreclosure action against Layo, nor has it ever notified her of such a sheriff’s sale of townhouse Unit 1.

On August 16, 2012, Layo filed a civil action against Peoples Bank, Ohio Bar Title Insurance Company, formerly Penn Title Insurance Company (“Penn Title”), andHallock, which is docketed to No. 12 CV 5007 (Lacka. Co.). Layo’s complaint in that suit averred four causes of action with respect to Peoples Bank. First, asserting that Peoples Bank had “failed to acknowledge [her] equitable interest” and duly notify her of the sheriff’s sale of township Unit 1, Layo advanced a claim for “specific performance” and sought to (1) enjoin Peoples Bank from selling townhouse Unit 1, and (2) compel Peoples Bank to convey Unit 1 to her for $1.00. (Docket entry no. 1 in No. 12 CV 5007 at ¶¶ 65-71). Count II of Layo’s complaint charged Peoples Bank with negligence for failing to comply with the “standard of care in the banking industry” and the federal and state law requirements imposed upon mortgagors, whereas Count III alleged a cause of action for breach of fiduciary duty. (Id. at ¶¶ 72-77). Last, Layo asserted a claim under the Unfair Trade Practices and Consumer Protection Law (“UTPCPL”), 73 P.S. § 201-1 et. seq., and averred that Peoples Bank engaged in “unfair or deceptive acts or practices,” including “fraudulent or deceptive conduct which create[d] a likelihood of confusion or misunderstanding” in contravention of 73 P.S. § 201-2(4)(xxi). (Id at ¶¶ 78-80).

Peoples Bank did not commence a mortgage foreclosure action against Layo or consummate a sheriff’s sale against her, as represented in its written notice to Layo dated May 1, 2012, but nonetheless filed the instant ejectment action against Layo on November 13, 2012, seeking to evict her from townhouse Unit 1. (Docket entry no. 1 in No. 12 CV 6669). Fifteen days later, Peoples Bank filed preliminary objections in Layo’s civil suit, and sought to dismiss Layo’s claims for specific performance, negligence and breach of fiduciary duty. (Docket entry no. 9 in No. 12 CV 5007). Peoples Bank demurred to Layo’s specific performance claim on the grounds that “[sjpecific performance is an equitable remedy that may only be granted to a buyer where a contract for the sale of land is breached by the seller,” but Layo had “not alleged that she had any contract with Peoples [Bank] which was not fully performed by Peoples [Bank].” (Id. at ¶¶ 7, 9). Peoples Bank also sought to dismiss Layo’s negligence claim based upon the gist of the action doctrine and her breach of fiduciary duty theory since “[u]nder Pennsylvania law, a mortgagee does not stand as a fiduciary to a mortgagor simply due [to] the extension of a mortgage to the mortgagor.” (Id. at ¶¶ 11-13, 19-20). In the alternative, Peoples Bank maintained that Layo’s “allegations of negligence [we]re not sufficiently specific in order to inform Peoples [Bank] as to what actions allegedly were negligent.” (Id. at ¶15).

On December 21, 2012, visiting Senior Judge Harold Thomson, Jr., summarily sustained, without further explanation, Peoples Bank’s demurrer to Layo’s causes of action for specific performance and breach of fiduciary duty. (Docket entry no. 17 in No. 12 CV 5007). Although Peoples Bank’s demurrer to Layo’s negligence claim was overruled, its motion to strike for lack of specificity was sustained, and Layo was directed to file an amended complaint. (Id.). Layo timely filed an amended complaint and not only renewed her negligence and UTPCPL claims, but also asserted a cause of action for breach of contract. (Docket entry no. 18 in No. 12 CV 5007). Peoples Bank demurred to Layo’s negligence and breach of contract claims, and by Order dated May 1, 2013, Judge Trish Corbett sustained Peoples Bank’s preliminary objections and directed Layo to file another amended complaint. (Docket entry nos. 18-19, 24).

Layo filed a second amended complaint which alleged causes of action against Peoples B ank for breach of contract, unjust enrichment, fraud, negligent misrepresentation, fraudulent concealment, UTPCPL violations, intentional infliction of emotional distress, breach of the implied covenant of good faith and fair dealing, and failure to adequately train and supervise employees. (Docket entry no. 25 in No. 12 CV 5007 at ¶¶5-53). Peoples Bank again filed preliminary objections, and on October 2, 2013, visiting Senior Judge Peter J. O’Brien overruled the preliminary objections to Layo’s breach of contract and unjust enrichment claims, but sustained the demurrers to Layo’s claims for fraud, negligent misrepresentation, fraudulent concealment, intentional infliction of emotional distress, breach of implied covenant of good faith and fair dealing, and failure to adequately train and supervise employees. (Docket entry no. 30 in No. 12 CV 5007).

Layo’s claims against Peoples Bank for breach of contract, unjust enrichment, and violations of the UTPCPL remain pending in her civil suit. In her breach of contract claim, Layo contends that Peoples Bank breached its obligations under the note, mortgage and settlement documents by (a) collecting monthly mortgage payments when it knew that no deed or mortgage had been recorded, (b) forwarding its notice of intention to foreclose on Layo’s mortgage even though it knew that the mortgage had not been properly recorded, (c) “continuing to telephone and write [Layo] that it intended to foreclose on the ‘mortgage’ to her property after the premises had been judicially foreclosed upon” and sold, and (d) failing to timely inform Layo that her deed and mortgage had not been recorded upon learning of that fact in 2009. (Docket entry no. 25 in No. 12 CV 5007 at ¶¶ 5-6). Layo seeks to recover as compensator damages the monies that she has paid to Peoples Bank. (Id. at pp. 5-6). In her cause of action predicated upon the UTPCPL, Layo seeks to recover those actual damages, as well as treble damages pursuant to 73 P.S. § 201-9.2. (Id. at ¶¶ 40-41).

On June 20, 2014, Peoples Bank filed a petition to strike Layo’s lis pendens in No. 12 CV 1771, and alleged that “[b]ecause [Layo’s] remaining claims [in her civil suit] are for only monetary damages, the lis pendens must be stricken” as Layo “has no equitable claim for title to the property.” (Docket entry no. 10 in No. 12 CV 1771 at ¶¶ 10, 14). Oral argument on Peoples Bank’s petition to strike was conducted on August 14, 2014. (Docket entry no. 11 in No. 12 CV 1771). Four days later, Layo filed a “Complaint to Quiet Title” in the lis pendens proceeding seeking “a declaration that the title to the subject land and real property is vested in [Layo] and that [Peoples Bank] be declared to have no estate, right, title or interest in the subject property.” (Docket entry no. 14 in No. 12 CV 1771 at ¶ 7). After Layo and Peoples Bank filed supplemental briefs regarding the quiet title complaint, (Docket entry nos. 16-17 in No. 12 CV 1771), an Order was issued on September 11, 2014, deferring “any ruling on the petition to strike the lis pendens and the complaint to quiet title... until the conclusion of the non-jury trial in the ejectment action.” (Docket entry no. 18 in No. 12 CV 1771 atp. 3). With the benefit of the foregoing procedural history and factual findings, the merits of Peoples Bank’s ejectment claim will be addressed.

III. DISCUSSION

(A) EJECTMENT BURDEN OF PROOF

Peoples Bank seeks to eject Layo from townhouse Unit 1,2916 McCarthy Street, Scranton. “Ejectment is an action filed by a plaintiff who does not possess the land but has the right to possess it, against a defendant who has actual possession.” Siskos v. Britz, 567 Pa. 689, 699, 790 A.2d 1000, 1006 (2002). “The purpose of an ejectment action as opposed to quiet title is not to determine the relative and respective rights of all potential title holders, but rather the immediate rights between plaintiff and defendant involved in that particular litigation.” Wells Fargo Bank. N.A. v. Long, 934 A.2d 76, 78 (Pa. Super. 2007) (quoting Siskos, supra); Fell Charter School, Inc. v. Carbondale Area School District, 2007 WL 8076746, at *3 (Lacka. Co. 2007). The plaintiff in an ejectment action bears the burden of proving by a preponderance of the evidence that the plaintiff is entitled to immediate exclusive possession based upon the plaintiff’s paramount title. Riverwatch Condominium Owners Association v. Restoration Development Corp., 980 A.2d 674, 681-682 (Pa. Cmwlth. 2009), app. denied, 603 Pa. 711, 985 A.2d 220 (2009); Community Bank & Trust Co. v. Marier. Inc., 2011 WL 10948329, at *4 (Lacka. Co. 2011). Relief may be secured in an ejectment action only on the strength of plaintiff s own title, not the weakness of defendant’s title. Riverwatch Condominium Owners Association, 980 A.2d at 682; Moore v. Duran, 455 Pa. Super. 124, 139, 687 A.2d 822, 829-830 (1997), app. denied, 549 Pa. 703, 700 A.2d 442 (1997); Durdach v. Revta, 2011 WL 7272290, at *3 (Lacka. Co. 2011), aff’d, 64 A.3d 268 (Pa. Super. 2013); Ciccone v. Sposito, 104 Lacka. Jur. 389, 397 (2003).

Peoples Bank contends that it is entitled to immediate and exclusive possession of townhouse Unit 1 since it acquired ownership of that property by virtue of its duly recorded sheriff’s deed conveying title to 2900 McCarthy Street and any structures erected on that land. (Docket entry no. 31 at ¶¶ 20-27). Layo alleges, albeit without citation to any statutory or decisional authority, that she “is the equitable, lawful and legal owner of the subject premises.” (Docket entry no. 30 at ¶19). Layo alternatively argues that she was not served with original process in Peoples Bank’s action against Mountainside, nor was she furnished with the requisite notice of the sheriff’s sale pursuant to Pa.R.C.P. 3129.1 and 3129.2, as a result of which the sheriff’s deed “is a nullity and void” as to townhouse Unit 1. (Id. at ¶¶ 5, 7-8). Thus, a determination must be made as to whether Peoples Bank satisfied the notice and service of process requirements for an enforceable judgment and an effective sheriff’s sale.

(B) NOTICE OF JUDGMENT AND SHERIFF’S SALE

With regard to sheriff’s sales in Pennsylvania, “[t]he notice requirements of Pa.R.C.P. 3129.1, 3129.2, and 3129.3 were intended to protect fundamental rights of due process by insuring that persons with an interest in real estate would receive adequate notice before being deprived of their property.” First Eastern Bank. N.A. v. Campstead, Inc., 432 Pa. Super. 241, 245, 637 A.2d 1364, 1366 (1994). In addition to compliance with the procedures set forth in Rules 3129.1 — 3129.3, the notice of the sheriff’s sale must also be reasonably calculated to provide actual notice of a foreclosure sale and to afford adequate opportunity to present timely objections. See RTC Mortgage Trust v. Fry, 556 Pa. 603, 607, 730 A.2d 476, 478 (1999).

Rule 3129.1 addresses the affidavit which must be filed by a plaintiff seeking to sell real property upon a writ of execution, and mandates that the affidavit must set forth, inter alia, the name and address of eveiy person “who has any interest in that property not of record which may be affected by the sale and of which the plaintiff has knowledge.” Pa.R.C.P. 3129.1(b)(4). Pursuant to Pa.R.C.P. 3129.2(a) and (c), all individuals identified in the Rule 3129.1 affidavit must be furnished with written notice of the sheriff’s sale “at least thirty days before the sale.” See Fleet Consumer Discount Company v. Graves, 33 F.3d 242, 249-250 (3d Cir. 1994) (under Pa.R.C.P. 3129.1(b) (4) and 3129.2(a) and (c), lender was required to furnish thirty days notice of sheriff’s sale to every person having an interest in the property, that was “not of record” and of which the lender had actual or constructive notice.). To satisfy due process requirements, the written notice must “be reasonably calculated to inform interested parties of the pending action, and the information necessary to provide an opportunity to present objections.” M & T Mortgage Corp. v. Keesler, 826 A.2d 877, 880 (Pa. Super. 2003), app. denied, 579 Pa. 693, 856 A.2d 835 (2004); Boyer v. Walker, 714 A.2d 458, 462 (Pa. Super. 1998).

Rule 3129.2(a) and (b) further require that “handbills shall be posted by the sheriff...upon the property at least thirty days before the sale, and shall include (1) a brief description of the property to be sold, its location, any improvements, the judgment of the court on which the sale is being held, the name of the owner or reputed owner, and the time and place of sale, and (2) a notice directed to all parties in interest and claimants that a schedule of distribution will be filed by the sheriff on a date specified by the sheriff not later than thirty days after the sale and that distribution will be made in accordance with the schedule unless exceptions are filed thereto within ten days after the filing of the schedule.” Pa.R.C.P. 3129.2(b)(l)-(2). The plaintiffs failure to comply with the notice requirements of Rules 3129.1 and 3129.2 renders the sheriff’s sale defective, and warrants “anew sale with notice to all interested parties in accordance with the applicable Rules of Civil Procedure,” even if the objector “learned of the sheriff’s sale at the proverbial eleventh hour” and a representative of that objector was present at the sale. Campstead, Inc., 432 Pa. Super, at 247, 637 A.2d at 1367. See also Gambler v. Huvett, 451 Pa. Super. 351, 358-359, 679 A.2d 831, 834-835 (1996) (proper remedy for lack of proper notice is to vacate sheriff’s sale and order that sale be rescheduled following proper notice).

The credible evidence established that Peoples Bank knew as early as mid-2009 that Layo’s interest in townhouse Unit 1 was “not of record” as a result of Hallock’s failure to file the Mountainside-Layo deed with the recorder of deeds. Yet, when Peoples Bank filed its Rule 3129.1 affidavit more than two years later in Peoples Neighborhood Bank v. Mountainside Commons, LLC, supra, it did not identify Layo as a “person who has any interest in that property not of record which may be affected by the sale and of which the plaintiff has knowledge,” as required by Pa.R.C.P. 3129.1(b)(4). (Docket entry no. 10 in no. 11 CV 4523). As a consequence of Peoples Bank’s inexplicable omission of Layo from its Rule 3129.1 affidavit, Peoples Bank neglected to provide Layo with thirty days written notice of the scheduled sheriff’s sale. See Pa.R.C.P. 3129.2(c) (stating that “written notice shall be prepared by the plaintiff..and shall be served at least thirty days before the sale on all persons whose names and addresses are set forth in the affidavit required by Rule 3129.1.”). To compound that notice deficiency further, Peoples Bank identified and furnished thirty days written notice to every other townhouse unit occupant, even though they were mere tenants who had not ostensibly purchased their units as Layo had done on August 20, 2008. (Docket entry no. 34). Last, Peoples Bank violated Rule 3129.2(a) and (b) by failing to have the sheriff post a handbill on townhouse Unit 1 advising Layo of the time and place of the sheriff’s sale at least thirty days before the sale. See Pa.R.C.P. 3129.2(a), (b)(1)-(2).

Perhaps more importantly, the underlying judgment secured by Peoples Bank in Peoples Neighborhood Bank v. Mountainside Commons. LLC, was not effective as to Layo due to Peoples Bank’s failure to comply with the service of process requirements set forth in Rule 410(b) (1). Although styled as a “complaint for confession of judgment,” the relief sought by Peoples Bank in no. 11 CV 4523 included foreclosure upon, title to, and possession of the townhouse units located at 2900 McCarthy Street. (Docket entry no. 1 in no. 11 CV 4523 at ¶¶ 4-5 and Exhibits B, C). Rule 410 governs the service of original process in “actions involving title to, interest in, possession of, or charges or liens upon real property,” Pa.R.C.P. 410(a), and provides that “[i]f in an action involving an interest in real property the relief sought is possession or mortgage foreclosure, original process also shall be served upon any person not named as a party who is found in possession of the property.” Pa.R.C.P. 410(b)(1). If service of original process is not made upon a non-party in possession of the mortgaged property, the resulting defect in service deprives the court of jurisdiction or authority to enter the judgment. Meritor Mortgage Corp. v. Henderson, 421 Pa. Super. 339, 341-342, 617 A.2d 1323, 1325 (1992).

In the case sub judice, Peoples Bank knew that Layo was in possession of townhouse Unit 1 at the time it commenced no. 11 CV 4523 seeking to enter judgment against Mountainside, to schedule a sheriff’s sale of 2900 McCarthy Street upon a writ of execution, and to gain possession of that real estate and the townhouse units constructed on it. Furthermore, when Peoples Bank instituted no. 11 CV 4523 on July 26,2011, it was actively collecting mortgage payments from Layo even though it knew for two years that her deed and mortgage had not been filed. As a result, it was incumbent upon Peoples Bank to serve Layo with original process in no. 11 CV 4523. See Pa.R.C.P. 410(b)(1). Consequently, the credible evidence demonstrated that Peoples Bank did not satisfy the service and notice requirements of Rules 410(b)(1), 3129.1(b)(4) and 3129.2(a), (b) and (c).

Based upon Peoples Bank’s failure to comply with Rules 410(b)(1), 3129.1(b)(4) and 3129.2(a)-(c) prior to obtaining judgment and scheduling the sheriff’s sale in no. 11 CV 4523, both the judgment and the sheriff’s sale are defective and void as to Layo. The fact that Layo fortuitously learned of the impending sale two days beforehand does not negate or cure Peoples Bank’s notice infirmities. See Campstead, Inc., supra. Nevertheless, Peoples Bank argues that Layo’s collateral attack on the sheriff’s sale is untimely since Layo did not challenge the sheriff’s sale before delivery of the sheriff’s deed to Peoples Bank. Hence, before determining whether Peoples Bank is entitled to ejectment relief, the timeliness of Layo’s notice attacks must be addressed.

(C) TIMELINESS OF CHALLENGES TO ENTRY OF JUDGMENT AND SHERIFF’S SALE

Pa.R.C.P. 3132 entitles “any party in interest” to seek to set aside a sheriff’s sale by filing a petition “before delivery... of the sheriff’s deed,” whereas Pa.R.C.P. 3135(a) affords an objecting party twenty days to file exceptions before the sheriff executes a sheriff’s deed. “Taken together, Rule 3132 and 3135(a) make clear a party must raise a challenge to a sheriff’s sale within a period of time after the sale, but before the deed is delivered.” Mortgage Electronic Registration Systems, Inc. v. Ralich, 982 A.2d 77, 80 (Pa. Super. 2009), app. denied, 606 Pa. 650, 992 A.2d 889 (2010). However, “[a] sheriff’s sale may be set aside after delivery of the sheriff’s deed based on fraud or lack of authority to make the sale.” Id.

Peoples Bank’s actions before and after the sheriff’s sale on March 20, 2012, provided a reasonably prudent person in Layo’s position with cause to believe that it was unnecessary to challenge that sheriff’s sale since it appeared to be inapplicable to townhouse Unit 1. In anticipation of the sheriff’s sale, Peoples Bank did not have Layo’s unit posted by the sheriff with a handbill pursuant to Pa.R.C.P. 3129.2(b). Although Peoples Bank identified eveiy other occupant of a townhouse unit on 2900 McCarthy Street in its Rule 3129.1 affidavit, and thereafter served notice of the scheduled sheriff’s sale upon those townhouse unit tenants, it neglected to similarly identify and serve Layo despite the fact that Peoples Bank was cognizant of her possession of townhouse Unit 1 and had continued to accept and deposit her mortgage payments relative to that unit. Additionally, the stipulation filed by Peoples Bank on March 19, 2012, affirmatively represented that it sought to subject 2900 McCarthy Street and “six (6) townhouse units” to a sheriff’s sale on March 20,2012. (Docket entry no. 14 in no. 11 CV 4523 at ¶¶10-11). The totality of those actions and representations by Peoples Bank indicated to Layo and the public that Peoples Bank merely sought to foreclose upon the six townhouse units which had not been sold by Mountainside to third parties.

Even subsequent to the sheriff’s sale on March 20, 2012, Peoples Bank’s written communications to Layo reflected that she continued to own townhouse Unit 1. On May 1, 2012, Peoples Bank forwarded a notice to Layo asserting that she had failed to make her last three monthly payments, and advising her that if she failed to pay the full amount of the default, it would instruct its counsel “to start a lawsuit to foreclose your mortgaged property.” (Docket entry no. 1, Exhibit I in no. 12 CV 5007). Layo was further informed by Peoples Bank that if such a foreclosure action was instituted against her, her townhouse unit “will be sold by the sheriff to pay off the mortgage debt” and the “sheriff’s sale will end your ownership of the mortgaged property and your right to remain in it.” (Id. at pp. 1-2) (emphasis added). To date, Peoples Bank has not filed such a mortgage foreclosure action against Layo, nor has it properly notified her of a sheriff’s sale of townhouse Unit 1.

An untimely “attack on a sheriff’s sale usually cannot be made in a collateral proceeding,” and “[a]n ejectment action is a proceeding collateral to that under which the land was sold.” Dime Savings Bank v. Greene, 813 A.2d 893, 895 (Pa. Super. 2002). However, if a non-party is not served with proper notice under Pa.R.C.P. 410(b)(1), the court lacks authority to enter judgment in the action involving title to, interest in, or possession of real property, and “[i]t is never too late to attack” such a judgment for want of authority. Henderson, 421 Pa. Super, at 344, 617 A.2d at 1326 (quoting Vichosky v. Boucher, 162 Pa. Super. 598, 600, 60 A.2d 381, 382 (1948)). Moreover, where the underlying judgment is void, “the sheriff’s sale which follows is a nullity.” Greene, supra. In that event, the judgment entered and the resulting sheriff’s sale “can be attacked collaterally in the mortgagee’s action in ejectment to recover possession of the mortgaged premises” from the person who is in possession of that property. Henderson, 421 Pa. Super, at 344-345, 617 A.2d at 1326 (“[Wjhen the trial court held that such a defense could not be raised in the ejectment action, it committed legal error.”). Accord Greene, supra (“A judgment which is void can not support an ejectment action and may be asserted as a defense in the ejectment proceeding.”).

Peoples Bank’s failure to comply with Pa.R.C.P. 410(b) (1), 3129.1(b)(4) and 3129.2(a)-(b) deprived the court of the authority to enter judgment and the sheriff of the power to consummate the sheriff’s sale on March 20, 2012. Therefore, Layo may collaterally attack the judgment and sale in this ejectment proceeding even after the delivery of the sheriff’s deed to Peoples Bank. As a result, Peoples Bank’s assertion that Layo’s service and notice challenges are time-barred is without merit.

(D) REQUEST FOR EJECTMENT RELIEF

As the party seeking to eject Layo from townhouse Unit 1, Peoples Bank has the burden of proving its entitlement to immediate and exclusive possession of that unit. To secure that ejectment relief, Peoples Bank must establish by a preponderance of the evidence that it has paramount title to townhouse Unit 1. See Riverwatch Condominium Owners Association, 980 A.2d at 681-682. The gist of Peoples Bank’s “paramount title” claim is that it is the “record owner” of that unit since the sheriff’s deed dated April 23,2012, was filed and recorded with the Lackawanna County recorder of deeds on April 27, 2012, while Layo’s deed to townhouse Unit 1 has never been recorded.

The Pennsylvania recording statutes, 21 P.S. §§ 351 and 444, require all deeds of conveyance to be acknowledged and recorded in the office for the recording of deeds in the county where the property is located within ninety days of the execution of the deed. See Sabella v. Appalachian Development Corp., 2014 WL 5316625, at *9 n. 4 (Pa. Super. 2014) (quoting 21 P.S. § 351); Roberts v. Estate of Pursley, 718 A.2d 837, 841 (Pa. Super. 1998) (quoting 21 P.S. § 444), app. denied, 559 Pa. 706, 740 A.2d 234 (1999). The recording of a deed serves to provide public notice of the title holder of the property. HSBC Bank USA. N.A. v. Lackawanna County Tax Claim Bureau, 2014 WL 3805796, at *6 n. 9 (Pa. Cmwlth. 2014); Poffenberger v. Goldstein, 776 A.2d 1037, 1042 (Pa. Super. 2001). The foregoing recording statutes are intended to protect bona fide purchasers against “deceptious appearance of title,” and both statutes declare that an unrecorded deed is deemed void as to any subsequent bona fide purchaser. Poffenberger. supra, Roberts, supra.

The passage of title to property becomes legally operative upon the execution and delivery of a deed of conveyance. See In re Herbert’s Estate, 356 Pa. 107, 111-112, 51 A.2d 753, 756 (1947). “The recording of a deed constitutes prima facie evidence of delivery and raises a rebuttable presumption thereof.” Bank of New York v. Harvey, 928 A.2d 325, 327 n. 2 (Pa. Super. 2007), app. denied, 595 Pa. 710, 939 A.2d 889 (2007). However, “recording of a deed is not essential to establish its validity; title to real estate may be passed by delivery of the deed without recording it.” Upper Tulpehocken Township v. Berks County Board of Assessment Appeals, 842 A.2d 1041, 1044 (Pa. Cmwlth. 2004); Sovereign Bank v. Harper, 449 Pa. Super. 578, 592, 674 A.2d 1085, 1092 (1996), app. denied, 546 Pa. 695, 687 A.2d 379 (1996).

The limited testimony presented with respect to the Mountainside — Layo closing on August 20, 2008, is insufficient to establish “delivery” of the deed to Layo or her agent. Layo never saw the deed or witnessed anyone take possession of it. (T.P. 9/15/14 at pp. 67, 79). The seller’s principal observed the deed on the conference room table, but does not know who took custody of the deed at the closing. (T. P. 9/16/14 at pp. 36, 48-49, 51). Although Peoples Bank’s branch manager testified that Hallock departed the closing with the mortgage and deed, (Id. at pp. 9, 20-21), neither he nor any other witness provided any testimony regarding any instructions that may have been provided to Hallock relative to delivery of the deed.

Delivery of a deed may effectively result in the transfer of title if it is provided to a third party with specific instructions to deliver it to the grantee “then or at some future time” following “the happening of a specified contingency.” Fiore v. Fiore, 405 Pa. 303, 306, 174 A.2d 858, 859-860 (1961); In re Padezanin, 937 A.2d 475, 480 (Pa. Super. 2007). “However, delivery is not accomplished by the mere handing of the executed deed to a stranger.” Fiore, 405 Pa. at 306, 174 A.2d at 860. Similarly, “the mere handing of the executed deed, without more, to a third person who is an agent of the grantee is ineffective.” In re Padezanin, supra (quoting Fiore, supra).

Layo has steadfastly maintained that Hallock did not represent her in connection with the Mountainside — Layo transaction, and she has repeatedly denied that Hallock acted as her agent at the closing on August 20, 2008. (T.P. 9/15/14 at pp. 48-49, 62-63, 65, 69; Docket entry no. 11 at ¶ 37, Exhibit 1 at ¶ 14). Based upon Layo’s persistent denial of any attorney — client relationship with Hallock, his possession of the deed on August 20, 2008, did not constitute “delivery” of the deed to Layo absent “an express and definite instruction that the deed [wa]s to be given to [Layo] then or at some future time.” Fiore, supra', In re Padezanin, supra. Since the non-jury trial record is completely devoid of any such proof, a finding cannot be made that the deed was delivered to Layo and that title to townhouse Unit 1 passed to her notwithstanding the fact that the deed was never recorded.

Nevertheless, for the reasons stated in Section III(B) and (C) above, the sheriff’s sale of 2900 McCarthy Street on March 20, 2012, was not valid or effective as to Layo or townhouse Unit 1. Peoples Bank failed to comply with Rules 410(b)( 1), 3219.1 (b)(4) and 3129.2(a)-(c) in securing the judgment and scheduling the resulting sheriff’s sale in no. 11 CV 4523. Furthermore, the order that was issued by Judge Carmen D. Minora on March 19, 2012, authorizing the sheriff’s sale on March 20, 2012, was predicated upon the stipulation that was prepared, executed and filed by Peoples Bank attesting that “six (6) townhouse units” were subject to the sheriff’s sale, even though seven (7) units were actually erected on 2900 McCarthy Street. Due to these deficiencies, Peoples Bank must schedule and conduct a new sheriff’s sale of townhouse Unit 1 in compliance with the foregoing Rules of Procedure. See Campstead. Inc., supra Gambler, supra. In the interim, Peoples Bank has not established its paramount title or right to immediate and exclusive possession of townhouse Unit 1. Accordingly, a verdict will be entered in favor of Layo and against Peoples Bank on Peoples Bank’s request for an order ejecting Layo from townhouse Unit 1.

ORDER

And now, this 22nd day of October, 2014, upon consideration of the competent, credible and relevant evidence introduced during the non-jury trial on September 15, 2014, and September 16, 2014, the parties’ proposed findings of fact and conclusions of law filed on September 22,2014, and the joint stipulation filed on October 3,2014, and based upon the factual findings and legal conclusions set forth in Sections II and III above, it is hereby ordered and decreed that a non-jury verdict is entered in favor of defendant, Sheila M. Layo, and against plaintiff, Peoples Neighborhood Bank, formerly Peoples National Bank, on plaintiffs request for ejectment relief.

      . On December 1, 2009, Hallock was charged with receiving stolen property and theft by unlawful taking related to funds that he had misappropriated from another closing, and following his plea of guilty to receiving stolen property, 18 Pa.C.S. § 3925(a), Hallock was sentenced by Judge Michael J. Barrasse on May 11, 2010, to an intermediate punishment sentence of six months to thirty months incarceration, which was suspended provided that Hallock served six months on house arrest. Com. v. Hallock, No. 09 CR 3217 (Lacka. Co.). The Office of Disciplinary Counsel also initiated disciplinary proceedings against Hallock based upon that theft, as well as his conversion of funds from three other individuals, including Layo. See Office of Disciplinary Counsel v. Hallock, No. 241 DB 2010 (Pa. Disc. Bd. Jan. 3, 2011). Hallock and the Office of Disciplinary Counsel executed a joint petition in support of discipline on consent, and by order dated March 2, 2011, the Supreme Court of Pennsylvania granted that petition and ordered “that Richard Hallock is suspended on consent from the Bar of this Commonwealth for a period of three years.” Office of Disciplinary Counsel v. Hallock, No. 1699 Disciplinary Docket No. 3 (Pa. Mar. 2, 2011).

      . In its “proposed post-trial findings of fact and conclusions of law,” Peoples Bank refers to the suit that it filed against Mountainside on July 26, 2011, as “a foreclosure action.” (Docket entry no. 31 at ¶ 29).

      . From the date of Lay o’s first mortgage payment to Peoples Bank in September 2008 through Februaiy 1,2012, Layo was current with her monthly mortgage payment obligations to Peoples Bank. As of February 1, 2012, Layo’s monthly mortgage payments under her adjustable rate note with Peoples Bank were $1,657.00.

      . Peoples Bank’s counsel in this ejectment action did not represent Peoples Bank in conjunction with the Mountainside — Layo closing, the litigation against Mountainside to foreclose upon 2900 McCarthy Street and gain possession of that property, or the sheriff’s sale that was conducted in No. 11 CV 4523.

      . The Supreme Court of Pennsylvania has established the “Pennsylvania Lawyers Fund for Client Security,” which is subsidized by “active annual” fees that are paid by all practicing attorneys in this Commonwealth. See Pa. R.D.E., Rule 502, 42 Pa.C.S.A. The fund is authorized to pay up to $100,000.00 to any claimant who suffers a “reimbursable loss” that is caused by “dishonest conduct,” including any theft, embezzlement or conversion of money, by any member of the Pennsylvania Bar who represented the claimant. See Pa.R.D.E. Rules 511-514, 521, 42 Pa. C.S.A. If Hallock had represented Layo at the Mountainside — Layo closing, Layo would arguably be entitled to file a claim with the Pennsylvania Lawyers Fund for Client Security.


source: Caselaw Access Project

author: HARLACHER SIBUM, J.,

license: Public Domain

text:
    Ammirato v. Ammirato

      C.P. of Monroe County,
    Nos. 693 DR 2011, 1562 CV 2012

      Connie J. Merwine, for plaintiff.

      William A. Watkins, for defendant.
    Oct. 10, 2014
   HARLACHER SIBUM, J.,

Mary (“wife”) and Dominick Ammirato (“husband”) were married on May 25, 1991 in Kresgeville, Pennsylvania. Husband was bom on June 1, 1954 and is currently 60 years old. Wife was bom on November 3, 1962 and is currently 51 years old. Wife has two older children from a prior marriage, and the couple has two children together. At the time of the master’s hearing on April 2, 2014, the youngest child was sixteen years old.

On February 2,2012, wife filed a complaint in divorce. On February 12,2014, Robert C. Lear, Esq., was appointed as divorce master to hear this matter. The master’s hearing was held on April 2, 2014 with both parties present accompanied by counsel. On July 9,2014, the master filed his master’s report (“report”), Both parties filed timely exceptions to the report. Plaintiff filed an accompanying brief in support of wife’s exceptions. Argument on the divorce exceptions was scheduled on September 8, 2014, at which counsel for both parties failed to appear. Although counsel’s failure to attend argument constitutes a waiver of all exceptions raised by the parties, in the interest of fairness to the litigants, we will address their exceptions.

DISCUSSION

Generally, a master’s recommendation is only advisory and not binding on the court. Jayne v. Jayne, 443 Pa. Super. 664, 670, 663 A.2d 169, 172 (1995). In determining issues of credibility, the master’s findings must be given the fullest consideration since it was the master who observed and heard the testimony and demeanor of the witnesses. Id. While the master’s report is not to be lightly disregarded, “[a] reviewing court has a duty to make a complete and independent review of the proceeding below.” Rollman v. Rollman, 421 A.2d 755 (Pa. Super. 1980). “Notwithstanding the fact that the master observes and hears the testimony of the witnesses, the trial court is not bound by the master’s recommendations.” Tagnani v. Tagnani, 654 A.2d 1136, 1138 (Pa. Super. 1995).

The rules of procedure require that, where exceptions are filed to a master’s report, each exception must set forth a separate objection precisely and without discussion. Pa.R.Civ.P. 1920.55-2(b). The court must address all issues that are raised in good faith, and the fact that the number of errors alleged is large does not automatically result in waiver. See Reinert v. Reinert, 926 A.2d 539 (Pa. Super. 2007).

With this standard in mind, we now address the parties’ exceptions. Wife has filed six (6) exceptions, while husband has filed ten (10) exceptions to the report. For purposes of judicial economy, we collectively analyze those exceptions which can be disposed of as such.

Both parties filed an exception to the master’s finding that the 2004 Chrysler Town and Country be transferred from husband to wife. Wife contends that husband sold the vehicle prior to the divorce hearing, but did not disclose this information at that time. As such, wife argues that the vehicle can no longer be transferred to her possession and that she should instead receive the fair market value of the vehicle, which is $8,623. Conversely, husband argues that the vehicle was a gift to their son and was traded approximately two (2) years ago.

In his report, the master noted that there were three vehicles acquired during the marriage — (1) 2004 Chrysler Town and Country; (2) 1999 Volkswagen Jetta; and a (3) 1990 Lexus. The master recommended that Husband relinquish any right, title and interest he has in the 2004 Chrysler Town and Country and deliver the vehicle over to Wife.

Upon request from either party in a divorce action, a court may equitably divide marital property without considering marital misconduct. 23 Pa.C.S.A. § 3502. “Marital property” includes all property acquired by either party during the marriage and the increase in value of any non-marital property acquired prior to the marriage or by gift. 23 Pa.C.S.A. § 3501(a)(l)-(3). Property acquired by gift, including property acquired in exchange for the-gift, is not marital property. 23 Pa.C.S.A. § 3501(a)(3). In determining the value of property, the court is free to accept all, part, or none of the testimony as to the true and correct value of property. Aletto v. Aletto, 371 Pa. Super. 230, 537 A.2d 1383 (1988). “[W]here the evidence offered by one party is uncontradicted, the court may adopt this value although the resulting valuation would have been different if more accurate and complete evidence had been presented.” Holland v. Holland, 403 Pa. Super. 116, 120, 588 A.2d 58, 60 (1991), appeal denied, 528 Pa. 611, 596 A.2d 158 (1991).

The master found that the 2004 Chrysler Town and Country was purchased using monies received by wife as a gift from her father. Therefore, the vehicle is not marital property and is excluded from equitable distribution. We adopt the master’s finding that the 2004 Chrysler Town and Country be transferred to wife. However, as the vehicle is no longer in husband’s possession and has since been sold, we will grant the wife’s exception and direct husband to transfer the fair market value of the vehicle to wife. Further, wife presented a Kelly Blue Book valuation for the vehicle in the amount of $8,623, while husband did not provide any documents attesting to the value of the 2004 Chrysler Town and Country. As such, we agree with wife’s assessment as to the fair market value of the vehicle and direct Husband to pay that amount to wife within thirty (30) days.

Wife’s second exception argues that the master failed to specify the time period in which husband is to pay wife for 58% of the marital credit card bills. Husband’s ninth exception disputes the allocation of these credit card bills, and argues that there is no factual basis to assign liability for these debts to him.

In his report, the master chose to allocate 58% of wife’s credit card debts to husband, and 42% to wife. Wife has accrued $8,196 in credit card debt, which she testified was used to pay for, inter alia, household expenses, food, gas, and a vacuum cleaner. As between divorcing parties, debts which accrue to them jointly prior to separation are marital debts. See Duff v. Duff, 507 A.2d 371 (1986). Upon review of the record and the master’s report, we find that the master had reasonable basis for the chosen allocation. The master had allocated 58% of the marital estate to the wife upon finding that while both parties are earning almost the same amount, the wife’s medical condition will impair her earning capacity in the future. Based upon this finding, it is reasonable for the master to call for the same allocation of the marital debt. Furthermore, husband did not provide sufficient documentation on his calculation of the marital debt. In an equitable distribution matter, the court, as finder of fact, is entitled to weigh the evidence presented and assess its credibility. Murphy v. Murphy, 599 A.2d 647, 653 (1991). Therefore, we disagree with husband’s contention and hereby dismiss his exception. As there is no time period specified in the master’s report, we grant wife’s exception and direct husband to pay 58% of the marital credit card debt within thirty (30) days.

Wife’s third and fourth exceptions deal with the listing of the marital home and the immediate appointment of the listing agent for the sale. We will address these exceptions simultaneously. Wife contends that the master should have directed that the house be listed immediately for sale, and the report should have specified the listing agent and not just the listing office. Husband and the younger son currently live in the marital residence located at 3533 High Hill Road, Effort, Pennsylvania. In his report, the master recommended that husband remains in the marital residence until the younger son graduates from high school. Upon the son’s graduation, the master directed the marital residence to be sold by the listing agent.

In her accompanying brief, wife notes that the son is currently in high school and is scheduled to graduate in June 2015. Wife contends that there is no reason why the property should not be listed immediately. Wife notes that, given the current real estate market, waiting until June 2015 will further prolong the sale of the property for another six (6) to twelve (12) months. We agree with wife’s contention and grant this exception. Furthermore, we grant wife’s exception as to designating a specific listing agent to handle the property sale.

Wife’s fifth exception argues that the master erred in not requiring husband to provide retirement information as part of the divorce. In conjunction, husband’s second exception argues that the master erred in his findings regarding the existence of a “military pension”, which he contends is non-existent. We will dispose of these exceptions simultaneously.

In his report, the master noted that wife does not have any retirement accounts while husband may have a “Thrift Savings Plan” (TSP) account from his employment at Tobyhanna Army Depot worth $1,200 and an unascertained Federal Employees Retirement System (FERS) account. The master recommended for these accounts, once ascertained, to be allocated 50/50 via QDRO and that costs be paid by husband. The court grants the wife’s exception insofar as directing husband to provide the necessary documents needed to determine the existence and current value of husband’s TSP and/ or FERS plan within thirty (30) days of this order, and consequently denies husband’s exception. The court adopts the master’s proposed allocation once the value of husband’s retirement benefits is confirmed.

Wife’s final exception argues that the master erred in not including the non-tuition/book portion of wife’s loans in calculating the reimbursement she is to receive from husband for expenses paid using her student loans. By-contrast, husband’s fourth and seventh exception objects to this reimbursement. Wife contends that the master should have awarded at least 50% of the student loan refund she has received and used to pay for household expenses. Husband contends that he gave $20,000 to wife during the marriage in order to save the marital home from foreclosure. Further, husband notes that he also worked during the marriage and paid household bills. Husband argues that wife has failed to provide bills for the expenses allegedly paid.

During the hearing, wife presented testimony and evidence regarding the amount she received from her student loans and the expenses that were paid using those funds. Husband did not present any documents attesting to a $20,000 “gift” to wife. Based on the record and testimonies presented at the hearing, the master reasonably concluded that a “reimbursement” of $7,500 from husband to wife for funds wife used to pay for household expenses using her school loans was fair and equitable. While this amount is not 50%, there is no requirement under equitable distribution to divide the assets and liabilities equally. We adopt the master’s finding and deny wife’s and husband’s exceptions.

Husband’s first and second exceptions have been dealt in conjunction with wife’s exceptions. Husband’s third exception argues that the master erred in his findings regarding balances in bank accounts from which a distribution has been recommended. According to husband, wife took $13,000 from their accounts shortly after leaving the marital home. Husband now contends that he cannot pay an additional 58% from funds that have been reduced by wife.

The master’s recommendation was based upon testimony and evidence presented during the hearing. Husband brings this alleged withdrawal without evidence of such. Husband neither testified to this withdrawal during the hearing, nor presented bank information corroborating his allegation. We are not inclined to disagree with the master’s finding without anything on the record. Accordingly, husband’s exception is denied.

In his fifth exception, husband argues that the master erred in his findings regarding wife’s health issues and maintains that there is no credible evidence establishing the wife’s medical condition. In the master’s report, he made findings of fact regarding the health of both parties. Husband appears to be in good health, while wife has been diagnosed with multiple sclerosis or “MS”. During the hearing, wife testified to having been diagnosed with MS shortly after her father passed away. Wife testified that she has taken medication in order to treat her MS, and that the disease is currently in remission.

Credibility of witnesses in a divorce action is not entirely resolved by the master. The court has the duty to make a complete and independent review of all the evidence presented in a divorce case. This includes a complete review of the weight and credibility to be accorded to the testimony of the witnesses. Riley v. Riley, 369 A.2d 1314 (1976). The reviewing court must examine the record in detail so as to discover inherent improbabilities in the stories of the witnesses, inconsistencies and contradictions, bias and interest, opposition to incontrovertible physical facts, patent falsehoods, and other factors by which credibility may be ascertained. Ryave v. Ryave, 249 Pa. Super. 78, 375 A.2d 766 (1977). However, where the issue is one of credibility and the master is the one who heard the testimony and observed the demeanor of the witnesses, the reviewing court must give his findings regarding credibility the fullest consideration. Ryave v. Ryave, supra.

Based on a review of the record, we find that the master’s finding and credibility determination is reasonable. Wife testified to her medical diagnosis, presented evidence of her medical bills, and husband has not shown sufficient evidence to contradict wife’s testimony. Thus, we deny husband’s exception.

Husband’s sixth exception dealt with the 2004 Chiysler Town and Country and has been addressed above.

Husband’s eighth exception argues that the master erred in allocating 50% of the husband’s income tax refunds to wife. Husband contends that when the tax returns were filed, wife had already left the marital home. Furthermore, husband argues that wife had unilaterally filed electronic tax returns in 2008, and had kept the tax refund she received.

The record reflects that in 2011, husband filed amended income tax returns for taxable years 2010 and 2009. Husband testified that these amended tax returns were filed after he and wife had separated, and that he retained the refunds for these years. He also testified that he did not share the refund with wife. Income tax refunds that are bom out of marital income are subject to equitable distribution. The refund is marital property but only to the extent that it is a repayment of excessive tax payments previously made with marital funds. See Cerny v. Cerny, 440 Pa. Super. 550, 656 A.2d 507 (1995). The classification of the tax refund is based upon the source of the overpayment, and not the category under which the parties filed their tax return. Thus, the master had a reasonable basis to allocate the post separation income tax refunds received by husband after he filed amended tax returns. The amended 2009 and 2010 tax returns reported marital income earned by both husband and wife during the marriage. The resulting tax refund is also marital property. Therefore, we deny husband’s exception.

Husband’s final exception argues that the master erred in awarding attorney’s fees to wife. He contends that the master does not have sufficient basis to award counsel fees as both parties have equal earning capacity. Furthermore, husband argues that the master should not have awarded attorney’s fees based on husband’s unsuccessful motions to disqualify wife’s attorney. In his report, the master noted that husband filed motions to disqualify wife’s attorney, but never showed up for the hearing. As a result, wife had to expend resources in order to defend such allegations. The master awarded wife with $4,500 in counsel fees payable within thirty (30) days of the divorce decree.

An award of counsel fees is warranted when it will promote the fair administration of justice by enabling the dependent spouse to maintain or defend the case without being placed at a financial disadvantage. Perlberger v. Perlberger, 626 A.2d 1206 (Pa. Super. 1993). Counsel fees are awarded based on a review of all relevant factors, including the payor’s ability to pay, the requesting party’s financial resources, the value of the services rendered, and the property received in equitable distribution. Id. at 1207; Teodorski v. Teodorski, 857 A.2d 194, 201 (Pa. Super. 2004). Moreover, a party to an action may be awarded counsel fees when another party engages in dilatory, obdurate, or vexatious conduct during the pendency of a matter. See 42 Pa.C.S.A. § 2503(7). Conduct is “dilatory” where the record demonstrates that counsel displayed a lack of diligence that delayed proceedings unnecessarily and caused additional legal work. See Gertz v. Temple Univ., 661 A.2d 13, 17 n. 2 (Pa. Super. 1995). Further, a suit is “vexatious” if brought without legal or factual grounds and if the action served the sole purpose of causing annoyance. Miller v. Nelson, 768 A.2d 858, 862 (Pa. Super. 2001) (citations omitted).

The master based his recommendation to award counsel fees on husband’s conduct. The record reflects that Flusband filed numerous pro se motions and petitions that prolonged this litigation and resulted in substantial legal fees. Husband also filed a motion to disqualify wife’s counsel, but failed to attend the hearing. Wife had to incur additional legal costs to defend against husband’s unproven allegations. These instances delayed the proceedings unnecessarily and caused additional legal work. As such, we find the master’s award of counsel fees to be reasonable. We adopt the master’s finding and deny husband’s exception.

Accordingly, we enter the following order.

DECREE

And now, this 10th day of October, 2014, upon consideration of the parties’ exceptions to the report and recommendation of the divorce master, it is ordered and decreed as follows:

1. Mary Ammirato and Dominick Ammirato are divorced from the bonds of matrimony.
2. Wife’s 1 st exception is granted and husband is directed to pay the fair market value of the 2004 Chrysler Town and Country in the amount of $8,632.00 within thirty (30) days of this order.
3. Wife’s second exception is granted. Husband is directed to pay 58% of wife’s credit card bills within thirty (30) days of this order.
4. Wife’s third and fourth exceptions are granted. The marital home located at 3533 High Hill Road, Effort, Pennsylvania shall be listed for sale immediately, with costs of appraisal to be paid by husband. Ms. Debra Módica is also designated as listing agent for said property. Any agreement of sale entered into by the parties shall provide that closing on the sale of the house shall not occur prior to June 30, 2015.
5. Wife’s fifth exception is granted. Husband is directed to provide any and all documents verifying his Thrift Savings Plan and/or fers accounts.
6. Wife’s sixth exception is denied.
7. All of husband’s exceptions are denied.
8. In all other aspects, the master’s recommendation is adopted as an order of the court and the parties are directed to carry out the terms thereof.

      . A QDRO is a limited exception to the pension plan anti-alienation provisions of the Employee Retirement Income Security Act of 1974 (“ERISA”), 29 U.S.C. § 1001 et seq., and Internal Revenue Code, 26 U.S.C. § 1 et seq., which otherwise prohibit assignment or alienation of pension benefits. Berrington v. Berrington, 534 Pa. 393, 397 n. 2, 633 A.2d 589, 591 n. 2 (1993). “A QDRO... is a domestic relations order which creates or recognizes the rights of an alternate payee to receive all or a portion of the benefits payable to a participant under the [pension] plan.” Id at 397 n. 3, 633 A.2d at 591 n. 3. “To be ‘qualified,’ the order must contain certain required information and may not alter the amount or form of plan benefits.” Id.

      . Husband filed amended tax returns reporting both parties’ income during those years.

      . The inchoate right to receive an income tax refund in the future is property. Johnson v. Johnson, 847 So. 2d 1157 (Fla. Dist. Ct. App. 5th Dist. 2003).


author: JOHNSON, J.,

text:
    Floyd v. Wigfield

      C.P. of Lehigh County,
    No. 2012-C-4131

      Matthew T. Tranter, for plaintiffs.

      Edward C. Wigfield, pro se defendant.

      Carol A. Wigfield, pro se defendant.

      Thomas J. Gregory, for defendants Keller Williams Real Estate and Northampton County Regional Realty, LLC d/b/a Keller Williams Real Estate.

      Thomas Geroulo, for defendant Krause Home Inspection Services Inc.

      Richard P. Kovacs, for defendant Prudential Patt-White Real Estate-Macungie
    Oct. 10, 2014
   JOHNSON, J.,

I. INTRODUCTION

Before the court for consideration are plaintiffs, Shannon Floyd, Norman D’Avanzo, and Ruth D’Avanzo’s, complaint filed April 2, 2013, defendant Edward C. Wigfield’s new matter and cross-claim filed on May 16, 2013, and defendant Northampton County Regional Realty, LLC d/b/a Keller Williams Real Estate’s new matter and new matter cross-claims filed on May 7, 2013, defendant’s, Krause Home Inspection Service, Inc. answer to plaintiffs’ complaint with new matter and cross claims filed on July 17, 2013, answer, new matter and crossclaims of defendant, Prudential Patt, White Real Estate-Macungie, to plaintiffs’ complaint filed on August 8, 2013.

On September 8, 2014, the court presided over a non-jury trial in this matter. Present at trial were plaintiff, Shannon Floyd; counsel for plaintiffs, Matthew T. Tranter, Esquire; pro se defendants, Edward C. Wigfield (“Wigfield”) and Carol A. Wigfield (“Mrs. Wigfield”) (collectively, “the Wigfields”); counsel for defendants, Keller Williams Real Estate and Northampton County Regional Realty, LLC d/b/a Keller Williams Real Estate (collectively, “Keller Williams”), Thomas J. Gregory, Esquire; counsel for defendant, Krause Home Inspection Services Inc. (“Krause”), Thomas Geroulo, Esquire; and counsel for defendant, prudential Patt-White Real EstateMacungie (“Patt-White”), Richard P. Kovacs, Esquire.

Prior to trial, at the pre-trial conference on August 19, 2014, and after specific discussion with the court, Wigfield informed the court that, at trial, he would be pursuing all cross-claims against Keller Williams, Krause, and PattWhite. As a result of Wigfield’s representation at the pretrial conference, counsel for said defendants appeared at trial prepared to defend against the Wigfields ’ cross-claims. However, at the trial held September 8, 2014, Wigfield did not present any evidence whatsoever in support of the Wigfields’ cross-claims against Keller Williams, Krause, or Patt-White. Based upon the Wigfields’ failure to present any evidence in furtherance of their cross-claims, this court dismisses the cross-claims filed by the Wigfields against Keller Williams, Krause, and Patt-White and the following findings and conclusions will not further address said cross-claims.

Also at the pre-trial conference, counsel for Keller Williams, Krause, and Patt-White advised the court that Keller Williams, Krause, and Patt-White indicated that they had reached an agreement to withdraw all claims, cross-claims, joinders, and new matters filed by and against one another. However, the aforesaid parties failed to provide the court with a sufficiently specific stipulation on the record memorializing their agreement to withdraw these claims. As a result, Keller Williams, Krause, andPattWhite did not effectively withdraw their claims against one another prior to trial. Moreover, Keller Williams, Krause, and Patt-White did not present any evidence in support of any of their cross-claims at trial. In light of this fact, this court dismisses all cross-claims filed by Keller Williams, Krause, and Patt-White and the following findings and conclusions will not further address said cross-claims.

Additionally, at the outset of trial, the parties stipulated to the fact that plaintiffs, in the course of litigation, have entered into settlement agreements with all defendants except the Wigfields. At the close of the evidentiary portion of the non-jury trial held September 8, 2014, counsel for Keller Williams, Krause, and PattWhite presented and entered into evidence the following settlement agreements: “Keller Williams 1,” “Krause 1,” and “Prudential 1.” These agreements, executed individually between the plaintiffs and all defendants except the Wigfields, release and discharge the plaintiffs’ claims against Keller Williams, Krause, and Patt-White. Therefore, this court will not address Count VII, Count VIII, Count IX, and the portion of Count X against Keller Williams, as the claims contained in said counts have been released and discharged by virtue of the individual settlement agreements executed between the plaintiffs and Keller Williams, Krause, and Patt-White.

In light of the foregoing, the findings and conclusions contained in this opinion will only address claims by the plaintiffs against the Wigfields which are contained in Count I-VI and X-XI of the plaintiffs’ complaint.

II. FINDINGS OF FACT

At the outset of trial, all of the parties stipulated to the following facts:

1. On or about October 9, 2010, plaintiffs purchased property from defendant Wigfields, located at 4774 Jasper Road, Emmaus, Pennsylvania, (“property”)
2. Prior to plaintiffs purchase of said real estate, it was solely owned by defendant Wigfields, who made significant changes to the characteristics and use of the property between the time they bought it and the time it was sold to plaintiffs.
3. During their ownership, defendant Wigfields, converted a barn building located on the property into multiple apartment units, renovated other buildings on the property, altered the property’s water waste system and performed other general work as owners of the property.
4. When defendant Wigfields decided to sell the property in 2009, they entered into a listing agreement with defendant Keller Williams.
5. Thereafter, defendant Wigfields prepared various documents and provided information, including a disclosure statement, wherein they made representations with regard to the characteristics, qualities, defects and other matters concerning the property, but did not disclose any violations or unpermitted work concerning the additions, alterations and structural changes which were performed.
6. Defendant Wigfields knew permits were required for portions of the work done at the property and intentionally did not obtain permits.
7. Defendant Wigfields made representations to plaintiffs that said property, specifically the main residence and apartments were ready for use and that no issues existed with the property.
8. The property was marketed as having two operable income producing rental units.
9. Plaintiffs entered into an agreement of sale to purchase the property on or about August 16, 2010, with settlement to occur before October 9, 2010.
10. At the time of purchase, the rental units were occupied by tenants.
11. Subsequent to plaintiffs’ purchase of the property, an issue arose with tenants prompting inspection of the property by Upper Milford Township zoning officer, Alan Brokate, which revealed that there were numerous violations of the Upper Milford Township’s laws, regulations and ordinances including, but not limited to, the fact that the property was not zoned or approved for multiple rental units and that one of the rental units would need to be eliminated.
12. Plaintiffs filed a request for a variance and were granted their request to allow for two rental units on said property, conditioned upon an inspection to confirm compliance with Upper Milford Township standards for each dwelling unit.
13. Plaintiffs in the course of litigation have entered into settlement agreements with all defendants except the Wigfield defendants.

In addition to the parties’ stipulated findings of fact which this court accepts as findings of fact, this court, upon consideration of the evidence presented at trial, makes the following findings of fact:

14. Despite being marketed as having two operable income producing rental units, the detached bam, bottom dwelling-unit was unpermitted. See testimony of Alan Brokate; See also notice of violation dated May 25, 2012, Exhibit P-2.
15. In the face of a legal obligation to do so and despite a specific question regarding zoning violations on the property, the Wigfields failed to disclose any zoning violations on the Seller’s Property Disclosure Form, Exhibit P-4.
16. Furthermore, on the same Seller’s Property Disclosure Form, Exhibit P-4, the Wigfields represented that they were unaware of any “material defects” on the property.
17. Edward C. Wigfield served as a former Upper Milford Township Zoning Officer and was familiar with zoning hearing procedures, zoning laws, building laws, and septic system laws. See testimony of Edward C. Wigfield.
18. The Wigfields made the previous representations and nondisclosures despite possessing actual knowledge that the current septic system was unpermitted for three (3) dwelling units and that the detached bam, bottom dwelling unit was unpermitted.
19. At the time the Wigfields made the aforementioned disclosures, they acted with the intent to conceal material defects with the property which would have adversely affected the property’s value and to mislead the plaintiffs into relying on said false disclosures.
20. The plaintiffs justifiably relied on said disclosures to their detriment.
21. The Upper Milford Township Zoning Hearing Board granted the plaintiffs a zoning variance for the bottom dwelling unit on the express condition that the septic system on the property be certified as adequate and up to current state and township standards. See “Shannon Floyd Zoning Appeal” dated August 13, 2012, Exhibit P-7.
22. The Wigfields performed unpermitted work on the property’s septic system.
23. The septic system on the property is noncompliant for three dwelling units.
24. Installing a new, compliant, septic system on the property appropriate for three dwelling units would cost roughly $40,000.00. See testimony of Paul Golrilc.

II. CONCLUSIONS OF LAW

The court makes the following conclusions of law concerning Counts I-VI and X-XI contained in the Plaintiffs’ Complaint against the Wigifields:

A. COUNTS I-III & XI — INTENTIONAL MISREPRESENTATION, NEGLIGENT MISREPRESENTATION, INNOCENT MISREPRESENTATION, AND FRAUDULENT NONDISCLOSURE

Generally, a misrepresentation may be actionable pursuant to three theories: intentional misrepresentation, negligent misrepresentation, and innocent misrepresentation. Bortz v. Noon, 729 A.2d 555, 560 (Pa. 1999). Similar to a claim for intentional misrepresentation, a separate claim also lies for intentional nondisclosure where the offending party intentionally conceals a material fact to a transaction rather than making an affirmative misrepresentation. Bortz, 729 A.2d at 560, citing Gibbs, 647 A.2d at 889; Ortho-McNeil-Janssen Pharms., Inc., 52 A.3d 498, citing Bortz. In this case, the plaintiffs’ complaint alleges the three forms of actionable misrepresentation, intentional, negligent, and innocent, along with a claim of intentional nondisclosure against the Wigfields. Directly aligned with the claims made in this case, the Pennsylvania Supreme Court’s analysis in Bortz v. Noon, a case arising out of a real estate transaction, addresses Pennsylvania’s three forms of legal liability for misrepresentation, in turn, before addressing the tort of intentional nondisclosure.

i. Count I — Intentional Misrepresentation

The court in Bortz listed the elements of intentional representation as follows:

(1) A representation;
(2) which is material to the transaction at hand;
(3) made falsely, with knowledge of its falsity or recklessness as to whether it is true or false;
(4) with the intent of misleading another into relying on it;
(5) justifiable reliance on the misrepresentation; and,
(6) the resulting injury was proximately caused by the reliance.

Id. at 560, citing Gibbs, 647 A.2d 882, 889 (Pa. 1994), citing Restatement (Second) of Torts § 525 (1977).

For purposes of applying the foregoing to the facts of this case, this court observes, and as stipulated by the parties, that the property was marketed as having two operable, income-producing apartments, that the Wigfields made representations to the plaintiffs that said property, specifically the main residence and apartments, were ready for use and that no issues existed with the property, and that the Wigfields knew permits were required for portions of the work done at the property and intentionally did not obtain permits. Additionally, the Seller Disclosure Form, Exhibit P-4, reveals that the Wigfields represented that they were unaware of any “material defects” to the Property. The Seller Disclosure Form, Exhibit P-4, clearly states, “A material defect is a problem with a residential real property or any portion of it that would have a significant adverse impact on the value of the property....” Colaizzi v. Beck, 895 A.2d 36, 39-40 (Pa. Super. 2006)(“A misrepresentation is material if it is of such character that if it had not been misrepresented, the transaction would not have been consummated.”).

Here, the Wigfields marketed their property as having two operable, income-producing apartments. They allowed their home to be advertised in this manner with the full knowledge that one of the apartments was never permitted and that the septic system on the property was never permitted to accommodate the apartments. The Wigfields were aware that revealing these facts would adversely impact the value of their property. Furthermore, the Wigfields specifically represented on the Seller Disclosure Form, Exhibit P-4, that the property was free of “material defects.” Based on these facts, this court concludes that the representation made by the Wigfields on the Seller’s Property Disclosure Form, Exhibit P-4, that the property was free of “material defects” was material to the transaction and made by the Wigfields falsely, with knowledge of its falsity, and with the intent to mislead the plaintiffs into relying on it.

Moreover, the Wigfields ’ argument that the septic system functions without issue does not undercut the fundamental fact that they intentionally represented that their property was free of “material defects” for the express purpose of fraudulently inflating the value of their property. Instead, the Wigfields’ argument seems more relevant to the idea that the Wigfields never thought that their deceit would be uncovered. As revealed by the testimony of Alan Brokate, Zoning Officer for Upper Milford Township, the unpermitted use and noncompliance would not have been uncovered but for the off-chance complaint of a tenant. Wigfield, a former zoning board chairperson, and Mrs. Wigfield had an affirmative legal duty to disclose their awareness of any “material defects,” but instead chose to falsely represent that they were unaware of any “material defects” and left the discovery of said defects to chance.

Whether or not the Wigfields intended to harm the plaintiffs is not the question in this case. Rather, the question is whether the Wigfields knowingly made false representations with the intent of deceiving the plaintiffs. This court concludes that they did. Finally, this court concludes that the plaintiffs ’ reliance on the representations made by the Wigfields was justified and the injury, suffered by plaintiffs, namely the expense required to bring the property into compliance, was proximately caused by this justified reliance.

ii. Count II — Negligent Misrepresentation

The court in Bortz also reviewed the elements of negligent misrepresentation as follows:

(1) A misrepresentation of a material fact;
(2) made under circumstances in which the misrepresenter ought to have known its falsity;
(3)with an intent to induce another to act on it; and
(4) which results in injury to a party acting in justifiable reliance on the misrepresentation.

Bortz, at 561. The Pennsylvania Supreme Court went on to describe the difference between the tort of negligent misrepresentation from the tort of intentional misrepresentation as follows, “The elements of negligent misrepresentation differ from intentional misrepresentation in that the misrepresentation must concern a material fact and the speaker need not know his or her words are untrue, but must have failed to make a reasonable investigation of the truth of these words.” Id.

Despite this court’s conclusion that the Wigfields’ conduct rose to the level of an intentional misrepresentation, this court also concludes that the Wigfields’ conduct was negligent. As previously stated, the Wigfields misrepresented that the property contained a compliant septic system and that the property was zoned for two income-producing apartments. The Wigfields misrepresented these facts by stating on the Seller’s Property Disclosure Form, Exhibit P-4, that the property contained no “material defects.” This court concludes that the Wigfields’ decision to make this statement in the face of their actual knowledge of the facts was unreasonable. For the foregoing and the conclusions already made above regarding intentional misrepresentation, this court concludes that the Wigfields’ representations were also negligent.

iii. Count III — Innocent Misrepresentation

Next, a claim for innocent misrepresentation, to the extent recognized in this Commonwealth, is an equitable doctrine based upon contract principles supporting equitable rescission to make a contract voidable by the innocent party, where appropriate. Bortz, at 564. The Pennsylvania Supreme Court has specifically declined to extend this equitable doctrine to establish legal tort liability for an innocent representation. This court concludes that the equitable remedy, namely contract rescission, sought in plaintiff’s complaint is not appropriate in this case.

iv. Count XI — Intentional Nondisclosure

In addition to the misrepresentation claims, the plaintiffs seek recovery for the claim of intentional nondisclosure. The tort of intentional nondisclosure maintains the same elements as intentional misrepresentation, except that, in the case of intentional nondisclosure, the offending party intentionally conceals a material fact rather than making an affirmative misrepresentation. Bortz, 729 A.2d at 560, citing Gibbs, 647 A.2d at 889; Ortho-McNeil-Janssen Pharms., Inc., 52 A.3d 498, citing Bortz. In this case, the Wigfields failed to respond to the question, “Are you aware of...any violations of zoning...?” contained at 19(d) of the Seller’s Property Disclosure Form, Exhibit P-4. Based on the Wigfields actual knowledge that the second apartment was not properly zoned, this court concludes that the Wigfields intentionally failed to disclose this fact at 19(d) for the express purpose of concealing it from the plaintiffs. For the foregoing and the conclusions already made above regarding the plaintiffs’ claim for intentional misrepresentation, this court concludes that the Wigfields’ nondisclosure was intentional in this case.

B. COUNT IV — BREACH OF CONTRACT

Additionally, the plaintiffs’ complaint also seek damages for breach of contract. In their complaint, the plaintiffs allege that the Wigfields breached the “duty of good faith and fair dealing” by making the aforementioned misrepresentations. In Pennsylvania, every contract imposes a duty of good faith and fair dealing. Southeastern Pennsylvania Transportation Authority v. Holmes, 835 A.2d 851, 858 (Pa.Cmwlth. 2003). A good faith term can be an explicit or implicit term of the contract. Id. However, Pennsylvania courts will not imply a good faith term where a plaintiff has an independent cause of action to vindicate the same rights with respect to which the plaintiff invokes the duty of good faith. Id. Here, the agreement of sale dated October 8, 2010, Exhibit P-5, does not appear to explicitly include a term imposing a “duty of good faith and fair dealing” and this court would need to imply one in order for the plaintiffs’ claim to succeed. Because the plaintiffs maintain multiple other independent causes of action in this case, this court will not imply a duty of good faith in this instance. For the foregoing, this court draws the legal conclusion that a cause of action for breach of the “duty of good faith and fair dealing” does not lie in this instance.

C. COUNT V — VIOLATION OF PENNSYLVANIA’S RESDL

Furthermore, the plaintiffs allege violations of the Pennsylvania Real Estate Seller Disclosure Law 68 Pa.C.S.A. § 7301 (“RESDL”). The RESDL places the following affirmative duty on sellers, “In completing the property disclosure statement, the seller shall not make any representations that the seller or the agent for the seller knows or has reason to know are false, deceptive or misleading and shall not fail to disclose a known material defect.” 68 Pa.C.S.A. § 7308. Furthermore, “any person who willfully or negligently violates or fails to perform any duty prescribed by any provision of this chapter shall be liable in the amount of actual damages suffered by the buyer as a result of a violation of this chapter....” 68 Pa.C.S.A. § 7311. In this instance, the Wigfields represented, on the Seller’s Property Disclosure Form, Exhibit P-4, that they were unaware of any “material defects” to the property which would have a significant adverse impact on the value of the property. This court has already concluded that the Wigfields made this representation with knowledge and with the intent to mislead or deceive. For the foregoing, this court concludes that the Wigfields violated the RESDL and are liable for the actual damages suffered by the plaintiffs.

D. COUNT VI — UNJUST ENRICHMENT

In the event of a rescission, the plaintiffs’ complaint also makes an unjust enrichment claim. However, as already discussed above regarding the claim for innocent misrepresentation, this court concludes that rescission is an inappropriate remedy in this case. Moreover, “it has long been held in this Commonwealth that the doctrine of unjust enrichment is inapplicable when the relationship between parties is founded upon a written agreement or express contract...” Wilson Area School Dist. v. Skepton, 895 A.2d 1250, 1254 (Pa. 2006). Here, the plaintiffs and Wigfields maintain such an express agreement and this court declines to rescind that express agreement. Therefore, the doctrine of unjust enrichment does not apply in this case.

E. COUNT X — VIOLATION OF UNFAIR TRADE PRACTICES AND CONSUMER PROTECTION LAW

Finally, the plaintiffs make a claim for violations of the Unfair Trade Practices And Consumer Protection Law, 73 P.S. § 201-1 etseq. (“UTPCPL”) and seek damages, treble damages, and attorneys fees under the statute. Under the UTPCPL, an individual who purchases goods, including real estate, may bring a private action to recover damages caused by another’s “act or practice declared unlawful” by the UTPCPL. 73 P.S. 201-9.2; Skurnowicz v. Lucci, 798 A.2d 788 (Pa. Super. 2003); See also In re Zisholtz, 226 B.R. 824, 831 (Bankr.E.D.Pa. 1998). The UTPCPL goes on to make it unlawful to engage in “unfair or deceptive acts or practices in the conduct of any trade or business.” Skurnowicz, at 794. In addition to twenty specifically enumeratedpractices, the UTPCPL provides that “engaging in any other fraudulent or deceptive conduct which creates a likelihood of confusion or of misunderstanding” constitutes an “unfair or deceptive act or practice. Id.; 73 P.S. § 201-2(4)(xxi). In this case, the misrepresentations which served as the bases for the Wigfields’ liability for the torts of intentional misrepresentation and intentional nondisclosure, also constitute violations of the UTPCPL catchall, 73 P.S. § 201-2(4)(xxi).

F. DAMAGES

In this case, the plaintiffs seek actual damages, consequential damages, treble damages under the UTPCPL, and attorney fees and costs under the UTPCPL. The plaintiffs seek damages in an amount sufficient to cover the expense to install a compliant septic system, which would allow the plaintiffs to be granted a zoning variance for the second apartment from the Township. See “Shannon Floyd Zoning Appeal,”at 9, Exhibit P-7 (“Therefore[,] it is the decision of the Zoning Hearing Board of Upper Milford Township...to grant the requested variance...on the express condition that the septic systems on the premises be certified as adequate and up to current state and township standards...”). At trial, the plaintiffs’ expert testified that installation of a compliant septic system would cost approximately $40,000.00. Therefore, this court awards damages to the plaintiffs in the amount of $40,000.00.

In addition to actual and consequential damages, this court must consider the plaintiffs’ claims for treble damages and attorney’s fees under the UTPCPL. The UTPCPL affords the trial court discretion to award treble damages, which are punitive in nature. 73 Pa.C.S.A. 201-9.2(a). However, in the present case, and despite the fraudulent nature of the Wigfields’ conduct, this court does not find treble damages appropriate in this case and declines to award them. On the other hand, upon consideration of the plaintiffs’ claim for attorney’s fees and costs, this court concludes that an award of attorney’s fees is appropriate to allow the claimants to be made whole without diminishing their net recovery by paying attorney’s fees. McCauslin v. Reliance Finance Co., 751 A.2d 683 (Pa.Super. 2000). However, an award of attorney’s fees is not meant to provide the claimants or their attorney with a windfall or bonanza upon a successful claim. Id. With this in mind, this court also reviews the four McCauslin factors: (1) The time and labor required, the novelty and difficulty of the questions involved and the skill requisite to properly conduct the case; (2) the customary charges of the members of the bar for similar services; (3) the amount involved in the controversy and the benefits resulting to the client or clients from the services; and (4) the contingency or certainty of the compensation. Neal v. Bavarian Motors, Inc., 882 A.2d 1022 (Pa.Super. 2005). After review of the attorney’s bill for services rendered, Exhibit P-10, this court concludes that fees and time expended on the plaintiffs’ UTPCPL claim in the amount of $20,126.18 are reasonable and appropriate based on the McCauslin factors.

III. CONCLUSION

Pursuant to the findings of fact and conclusions of law set forth above, the court finds that defendants, Edward C. Wigfield and Carol A. Wigfield, are liable to the plaintiffs, Shannon Floyd, Norman D’Avanzo, and Ruth D’Avanzo, in the amount of $40,000.00 in damages and $20,126.18 in attorney’s fees for a total verdict of $60,126.18.

ORDER

And now, this of October, 2014, upon consideration of plaintiffs, Shannon Floyd, Norman D’Avanzo, and Ruth D’Avanzo’s, complaint filed onApril 2,2013, answer, new matter and cross-claim on behalf of defendants Edward C. Wigfield And Carol A. Wigfield filed on May 16, 2013, defendant Northampton County Regional Realty, LLC d/b/a Keller Williams real estate’s new matter and new matter cross-claims filed on May 7, 2013, defendant’s, Krause Home Inspection Service, Inc. Answer to plaintiffs’ complaint with new matter and cross claims filed on July 17,2013, answer, new matter and crossclaims of defendant, prudential patt, white real estate-macungie, to plaintiffs’ complaint filed on August 8,2013, after non-jury trial held September 8, 2014, and for the reasons set forth in the accompanying opinion;

It is hereby ordered that verdict is entered in favor of plaintiffs, Shannon Floyd, Norman D’Avanzo, and Ruth D’Avanzo, and against defendants, Edward C. Wigfield and Carol A. Wigfield, in the amount of $60,126.18;

And it is further ordered that all said cross-claims filed by defendants, Edward C. Wigfield, Carol A. Wigfield, Northampton County Regional Realty, LLC d/b/a Keller Williams Real Estate, Krause Home Inspection Service, Inc., and Prudential Patt-White Real Estate-Macungie, are hereby dismissed with prejudice.

      . At trial, no evidence was presented by any of the defendants in furtherance of any of their cross-claims.