author: DRAYER, J.,

text:
    Realen Valley Forge Greenes Associates v. Timoney

      C.P. of Montgomery County,
    no. 05-09127.

      Thomas G. Wilkinson and Philip G. Kircher, for plaintiff.

      Timothy T. Myers, for defendants Timoney andHankin Family Partnership et al.

      Herman Weinrich, for third-party defendants Northwestern Mutual Life Insurance Company et al.
    December 22, 2009
   DRAYER, J.,

The dispute between the parties involves the development of the Valley Forge Golf Course in Upper Merion Township, Pennsylvania. The Hankin Family Partnership owned 135 acres of undeveloped land in Upper Merion Township, Montgomery County, Pennsylvania. Because the property was zoned “AG” under Upper Merion Township’s zoning code, it has been used as the Valley Forge Golf Club. In June of 1996, the receiver entered into an agreement to sell the golf course property to Realen Valley Forge Greenes Associates for $23,000,000 contingent upon Realen obtaining the right to develop it for commercial purposes, either through a rezoning or through a successful challenge to the validity of the existing agricultural zoning (1996 purchase agreement). This agreement was first amended in 1997 (1997 amended purchase agreement).

In 1997, Realen submitted to the Township Zoning Hearing Board a substantive challenge to the validity of the AG zoning of the golf course property that was opposed by the Upper Merion Board of Supervisors. In support of its challenge, Realen submitted two alternative site plans for the development of the golf course property. These plans have been generally known throughout this litigation as plan A and plan B. The ZHB rejected the Realen challenge in a decision dated August 13,1999. Realen unsucessfully appealed the ZHB decision to the Court of Common Pleas of Montgomery County and to the Commonwealth Court.

In January of 2001, Realen, the receiver and Marc Kaplin, Esquire, counsel at that time for Realen, entered into a joint prosecution agreement under which Mr. Kaplin on behalf of Hankin and Realen was to prosecute additional causes of action in the state court under the Pennsylvania Eminent Domain Code and federal court under the Civil Rights Act (collectively, “additional actions”). In March and April of 2001, these additional actions were commenced.

On or about July 1,2002, Realen told the receiver that it was unwilling to comply with the provisions of the existing purchase agreements to gain extensions to the agreement.

On July 3, 2002 Realen filed a petition for allocatur with the Supreme Court. Between July 2002 and May 2003 there were extensive negotiations relating to amending the 1997 purchase agreement.

On February 13,2003, Realen and the receiver signed an amendment to the purchase agreements. On March 3, 2003, the receiver filed a petition asking this court, inter alia, to consider the amended agreement of sale that had been signed (receiver’s petition).

On April 11, 2003, the Pennsylvania Supreme Court granted allocatur to review the ZHB denial of the Realen challenge and the lower court decisions sustaining that denial. On May 8,2003, after a hearing on the receiver’s petition, Realen and the receiver executed the second amendment amending and fully restating the purchase agreement dated June 19,1996 and the first amendment thereto executed in October 1997 (2003 second amended purchase agreement) and an amended and restated agreement concerning representation and joint prosecution (amended joint prosecution agreement). Like the 1996 and 1997 purchase agreements, the 2003 second amended purchase agreement contained provisions for Hankin to receive an additional purchase price.

In December of 2003, the Supreme Court issued a ruling in favor of Realen holding that the AG zoning of the golf course property was invalid and remanded the case to the Court of Common Pleas for implementation of the development of either plan A or plan B .In re Appeal of Realen Valley Forge Greenes Associates, 576 Pa. 115, 838 A.2d 718 (2003).

On June 4, 2004, before any final approvals in connection with the development had been obtained, Realen advised the receiver that they elected to close on the property on June 24, 2004. On June 24, 2004, Realen closed on the property and paid the sum of $27,046,106.56 to Hankin.

In the fall of 2004, Realen and Mr. Kaplin took steps to stay the additional actions without the consent of the receiver. See exhibits P-91 throughtP-94. OnNovember 30,2004, the receiver sent a letter to counsel for Realen objecting to the stays. In that letter, the receiver states:

“If it develops that the one-year period for measuring increased consideration to the sellers is measured not from the date of the issuance of original permits to Realen, but rather, from the date of settlement, in that improbable event we wish to make it clear that we are of the opinion that the stay of proceedings tolls the running of that one-year period.” (Exhibit P-95.)

On December 9,2004, counsel for Realen sent a letter to the receiver stating that Realen was within its authority to stay the additional actions with the township and that the time period for determining additional purchase price was running and would expire on June 24, 2005. On March 14,2005, the receiver asked us to consider an order to lift stays and resolve disputes. Nothing was ever filed in connection with this request.

On March 18, 2005, Realen commenced this action against Hankin by filing a complaint for a declaratory judgment. The relief requested was to have us declare that:

“(a) Any additional purchase price under the purchase agreement must be determined as of June 24, 2005;

“(b) The determination of an amount of additional purchase price is limited to those aspects of the development of the golf course property for which final approvals have been obtained as of June 24, 2005;

“(c) If Realen does not obtain any final approvals by June 24, 2005, Realen will not be required to pay any additional compensation at that time nor at any time thereafter.”

On March 21, 2006, Realen filed a motion to amend the complaint. On February 29, 2008, we granted leave to amend the complaint and the amended complaint was filed on April 9, 2008.

The amended complaint contained an additional request for relief:

“(d) Realen has the present right to settle the additional actions (United States District Court for Eastern District of Pennsylvania, docket no. 01-cv-1622 and Montgomery County Court of Common Pleas docket no. 01-6978) without payment of money by the Township to defendants without their consent and prior to paying additional purchase price, if any is found to be due.”

DISCUSSION

We first will consider the issues relating to the 2003 second amended purchase agreement and the payment of an additional purchase price. By order of June 1,2005, we found that an ambiguity existed in sub-paragraph 2A(c) of the 2003 second amended purchase agreement in setting a deadline for determining if Realen would owe an “additional purchase price” to Hankin for higher density development of the property.

Sub-paragraph 2A(c) states that “It is contemplated that before the closing date occurs the purchaser [Realen] will have obtained final approvals for all aspects of the development that the purchaser will construct on the property.” In fact, in June of 2004, Realen elected to complete the closing even though no final approvals for the development of the property had been obtained. By order of June 1, 2005, we found it was not clear how sub-paragraph 2A(c) operated to establish a deadline for determining the additional purchase price when no final approvals had been obtained prior to closing on the property. We then concluded that “extrinsic evidence of the parties’ contract discussions and negotiations therefore is needed in order to determine whether sub-paragraph 2A(c) was to apply if the closing occurred prior to the issuance of any approvals.”

Since the June 1, 2005 order, the parties conducted substantial discovery culminating in five days of hearings.

Before we can determine what the parties intended in the 2003 second amended purchase agreement regarding the payment of additional purchase price, we must start with the 1996 purchase agreements. This agreement provided for an additional purchase price as defined in paragraph 2A(a):

“(a) In addition to the purchase price, purchaser shall pay to seller, as the ‘additional purchase price’, an amount equal to the product of (i) the number of rentable square feet of ‘building rentable area’ (as hereinafter defined), in excess of425,000 rentable square feet, located on the property on or before the ‘closing date’ (as hereinafter defined), multiplied by (ii) the ‘square feet price’ (as hereinafter defined). Additional purchase price shall not be payable in any event with respect to final approval(s) received after the closing date. Nothing in this agreement shall obligate purchaser to seek to obtain final approvals for building rentable area in excess of 425,000 square feet and purchaser shall have no duty to sell or to maximize the additional purchase price....

“(c) The square foot price and additional purchase price shall be determined as of the date of receipt of the final approvals for the subject building rentable area. The additional purchase price, if applicable, shall be due at the closing date....” (Exhibit D-4.)

The relevant part of paragraph 3 of the 1996 purchase agreement, the predecessor of paragraph 4(e) of the 2003 second amended purchase agreement, states:

“(3) Closing.

“(a) Closing shall occur at 10 a.m. local time on the date (‘outside closing date’) which is one year after the ‘zoning application date’ (as hereinafter defined).

“Closing may also occur at any time earlier than as set forth above on the date established by purchaser giving 15 days prior written notice by purchaser to seller, but in no event prior to December 31,1996.

“The date of closing determined in accordance with the foregoing is referred to in this agreement as the ‘ closing date.’” (Exhibit P-120.)

This very straightforward language in the 1996 purchase agreement makes it clear that in the circumstances we now have before us no additional purchase price would have been paid. Paragraph 2(A) states that no additional purchase price shall be payable in any event with respect to final approvals received after the closing date. In paragraph 3, Realen had the option to have an early closing whether or not any permits had been obtained. This paragraph then provides that the date of closing, including an early closing, is referred to in this agreement as the “closing date”. If the terms of this agreement were still applicable, the “closing date” would have been June 24, 2004, and without question no additional purchase price would be owed.

Does the 2003 second amended purchase agreement change that result? Having determined an ambiguity in this agreement relating to the time period for calculating the additional purchase price, we now have to review the complicated negotiations that ended up in the 2003 second amended purchase agreement. The strict cutoff for determination of additional purchase price in the 1996 purchase agreement was the background against which the negotiations concerning the additional purchase price in the amended purchase agreement have to be considered.

On or about July 1, 2002, certain time limits were expiring and Realen advised the receiver that it was unwilling to comply with the requirements under the 1997 amended purchase agreement to obtain extensions. The parties then began to negotiate a second amendment. Mr. Kaplin, as counsel for Realen, was the principal drafter of this second amendment and the negotiations for the most part went through Mr. Kaplin’s office.

The first draft of the 2003 second amended purchase agreement was set forth in an email dated November 27, 2002 from Mr. Kaplin’s firm to the receiver. In that draft, paragraph 2(A)(c) provided:

“(c) Additional purchase price shall be determined as of the date of receipt of the final approvals for the type of building that generates the additional purchase price. The additional purchase price, if applicable, shall be due at the closing date .... Additional purchase price shall not be payable in any event with respect to final approval(s) received after the closing date.” Exhibit P-28.

Paragraph 4 of this draft provided:

“(4) Closing.

“(a) Closing shall occur at 10 a.m. local time on the date (closing date) which is 90 days after the purchaser has obtained all of the purchaser’s approvals for the permitted uses. Closing may also occur at any time earlier than as set forth on the above date established by the purchaser giving seller 15 days prior written notice____” Exhibit P-28.

In this draft there were two possible closing dates: 90 days after Realen had obtained all the necessary purchaser’s approvals; and an early closing as determined by Realen. Yet, Mr. Kaplin did not put in the critical language from the original agreement that the date of closing is the “closing date.”

This first draft of the proposed 2003 amended purchase agreement raised some concerns in the Hankin family about the additional purchase price. Mitchell Hankin initiated an internal dialogue among the Hankin family members with a December 4,2002 email that argued for expanding the time for determination of the additional purchase price, until five or more years after closing. He wrote:

“(7) par c. we need some protection, this par c. states ‘additional purchase shall not be payable in any event with respect to final approvals received after the closing date.’ possibly language that allows for an increase in purchase price five or more years after closing, there is also language to the effect that buyer need not try to maximize amount of development, we must protect ourselves.” (Exhibit P-34 at D-260.)

Following that internal discussion, by email dated December 10, 2002, Mayor Shanken, on behalf of the Hankins, commented:

“(13) Page 10, para. 2A(c): The closing date cannot be the cut-off date for the additional purchase price. What if there is an accelerated closing date? What about pending applications or applications that you hold off filing, or amend shortly after closing to avoid paying the additional purchase price? Therefore, we suggest a cut-off date of 24 months after the closing date.” (Exhibit P-36; N.T. 11/5/08 at 136-37; N.T. 11/6/08 at 162-65.)

Mr. Shanken sent a follow-up email on December 15, 2002 that reiterated Hankin’s request. He wrote:

“(1) Item 13. The closing date as the cut-off date for calculating the additional purchase price. You understand our concerns, so suggest something that protects us.” (Exhibit P-37; N.T. 11/5/08 at 138-40; N.T. 11/6/08 at 165.)

On January 14, 2003, Mr. Kaplin sent a revised draft of the amended purchase agreement to Mr. Shanken, Mark Hankin, and Realen representatives responding to Mr. Shanken’s requests concerning the additional purchase price provision. (Exhibit P-40.) Paragraph 2A(c) of the revised draft provided in relevant part:

“(c) the dates for determining the amount of the additional purchase price, if any, shall be as follows: For aspects of the development for which final approvals are obtained by the closing date and which do not change within one year after the closing date the determination date shall be the closing date. For aspects of the development for which final approvals are obtained by the closing date and which change within one year after the closing date the determination date shall be the closing date, but such determination shall be adjusted on the one-year anniversary of the closing date. For aspects of the development for which final approvals are not obtained by the closing date, the determination date shall be one year after the date on which final approvals are obtained for such aspects of the development.” (Exhibit P-40 f2A (emphasis added); N.T. 11/5/08 at 144-45; see also, evolution of ¶2A(c), tab B, at section 4.)

In several respects, this paragraph significantly changed the prior agreements relating to the additional purchase price. First is the removal of “additional purchase price shall not be payable in any event with respect to the final approvals received after the closing date.” Second is the insertion of the Kaplin proposed language that ties the determination of the amount of the additional purchase price to the dates when final approvals are issued if these final approvals have not been obtained by the closing date, rather than tying the date of determination to the closing date. Third is the introduction of the concept of “aspects of development.”

The Kaplin proposed language would have avoided any question about payment of the additional purchase price in the event of an early closing where no final approvals had been obtained. This language would require payment of an additional purchase price if the final approvals not obtained by the closing date resulted in excess development as provided in paragraph 2A(a), and the time for this determination would be one year after the final approvals were obtained. This determination was not tied in any way to closing date or the date of closing except that it referred to final approvals not obtained by the closing date.

Since Realen had not reviewed the draft containing the Kaplin proposed language, Mr. Kaplin’s covering email reserved Realen’s right to reject any of the proposed revisions. (N.T. 11/5/08 at 143; exhibit P-40.) Realen rejected the revisions to paragraph 2A(c) — specifically, the concept that with regard to final approvals not obtained by the closing date, the additional purchase price would be tied to the date on which the final approvals were received rather than the closing date. (N.T. 11/5/08 at 145, 147-49; exhibit P-43; N.T. 11/6/08 at 158-59, 166-67.)

Realen proposed the following revisions to paragraph 2A(c) of the January 14, 2003 draft:

“(c) the dates for determining the amount of the additional purchase price, if any, shall be as follows: For aspects of the development for which final approvals are obtained by the closing date and-which do not change within one year after the-closing-ctetc the determination date shall be the closing date. For-aspcets of the development for which-final-approvals are obtained by the closing date and which-changcr-within one year after the closing-date the initial determination-date shall be the closing-date, but such determination-shall be adjusted on the one vear-anniversarv of the closing-date? For aspects of the development for which final approvals are not obtained by the closing date, the determination date shall be one year the earlier of til 30 days after the date on which final approvals are obtained for such aspects of the development or (if) one year after the closing date.” (Exhibit P-45 emphasis added; N.T. 11/5/08 at 152-54; N.T. 11/6/08 at 168; see also, evolution of |2A(c), tab B, at section 7.)

Mr. Kaplin incorporated Realen’s proposed revisions into a new draft that was circulated on February 6,2003. (Exhibit P-48; N.T. 11/5/08 at 156; N.T. 11/6/08 at 169-70.) This draft provided in relevant part as follows:

“(c) the dates for determining the amount of the additional purchase price, if any, shall be as follows: For aspects of the development for which final approvals are obtained by the closing date the determination date shall be the closing date. For aspects of the development for which final approvals are not obtained by the closing date, the determination date shall be the earlier of (i) 30 days after the date on whichfinal approvals are obtained for such aspects of the development, or (ii) one year after the closing date." (Exhibit P-56 |2A (emphasis added); N.T. 11/5/08 at 159-60; N.T. 11/6/08 at 170-71.)

On February 11,2003 a draft that had been signed by Realen with identical 2A(c) language was submitted to the receiver with the admonition that no further extensions would be granted. The receiver signed this agreement on February 13, 2003.

In response to this executed agreement, on February 21,2003, Mark Hankin sent Realen a “marked-up” copy of the executed agreement that proposed further revisions to the language of paragraph 2A(c)

“(c) the dates for determining the amount of the additional purchase price, if any, shall be as follows: For aspects of the development for which final approvals are obtained by the closing date and which change within one year after the closing date the determination date shall be the closing date, but such determination shall be adjusted on the one-vear anniversary of the closing date. the determination shall be the closing-dater For aspects of the development for which final approvals are not obtained by the closing date, the determination date shall be the-carfier of (1) 30 days after the date on which final approvals are obtained for such-aspects-ofthe-de^ this protection for obvious reasons, all of which were discussed with Dennis and we thought were agreed upon — this is the yerbase from your prior draft, [sic]” (Exhibit P-58 (emphasis in original); N.T. 11/5/08 at 165-67; N.T. 11/6/08 at 174-76; see N.T. 11/5/08 at 163; exhibit P-57; see also, evolution of |2A(c), tab B, at section 11.) one year after the closing date, [we need

It is important to note that neither Mark Hankin’s letter nor his revised draft attempted to restore the concept from the Kaplin proposed language that would tie the determination date for calculating the additional purchase price to the dates when the final approvals were issued and not to the date of closing.

Attached to the receiver’s petition was exhibit H which is entitled summary of changes requested to the second amendment to the purchase agreement. Page 4 of exhibit H provides:

“On page 11, Realen has reneged on a previous understanding (which was reduced to writing in a draft submitted by Realen). This refers to the additional purchase price being payable with regard to any permit approvals obtained after the closing or which change after closing. Realen has substantially modified this provision so that there is no protection against Realen: (1) modifying a final approval beyond one year after the closing, or (2) holding off on a final approval for more than one year, in order to deprive seller of its entitlement to an additional purchase price.”

This paragraph clearly reflects that the receiver and the other Hankins knew that Realen had rejected the Kaplin proposed language and the consequences of that rejection. This paragraph is a statement by the Hankins showing their clear understanding that final approvals received more than one year after closing would “deprive seller of its entitlement to an additional purchase price.” Hankin in its post-hearing brief at p. 7 acknowledge that “[ajfter the allocatur, Hankin had considerable leverage.” Yet, neither the receiver nor any of the Hankins ever attempted to have the Kaplin proposed language or any similar language added back to the 2003 second amended purchase agreement.

On March 19, 2003, Realen sent to Mr. Timoney a further revised draft amended purchase agreement. Paragraph 2A(c) of the March 19, 2003 revised draft accepted the substance of the proposed language from the Mark Hankin draft, only substituting the phrase “first anniversary of the closing date” for the phrase “one year after the closing date,” and provided, in pertinent part, as follows:

“(c) the dates for determining the amount of the additional purchase price, if any, shall be as follows:

“(i) For aspects of the development for which final approvals are obtained by the closing date and which do not change within one year after the closing date, the determination date shall be the closing date.

“(ii) For aspects of the development for which final approvals are obtained by the closing date and which change within one year after the closing date, the initial determination date shall be the closing date, but such determination shall be adjusted on the first anniversary of the closing date.

“(iii) For aspects of the development for which final approvals are not obtained by the closing date, the determination date shall be the first anniversary of the closing date. ” (Exhibit P-59 ¶2A (emphasis added); N.T. 11/5/08 at 167-71; N.T. 11/6/08 at 176-78; see also, evolution of f2A(c), tab B, at section 12.)

Realen thus accepted Hankin’s request that the time for determination of additional purchase price would continue for a specified period of time after the closing date, and Realen acquiesced to the one year Hankin had requested. (N.T. 11/6/08 at 20.)

The record is clear that Realen and Hankin specifically bargained over the language setting forth the time frame during which an additional purchase price would be determined. The concept of tying that time frame to the issuance of the final approvals, rather than to the closing date, was expressly raised in the Kaplin proposed language and was rejected by Realen. In spite of their leverage, the Hankins accepted Realen’s rejection of that concept, and the parties ultimately settled after further negotiations on the language that was incorporated into paragraph 2A(c). That language tied the one-year period for determination of additional purchase price to the closing date, not to the time when final approvals were obtained. It is clear from these communications and Hankin’s actions throughout this case that they knew that the date for closing on the purchase of the property would trigger the one-year period.

As we had earlier concluded, the language in paragraph 2A(c) was ambiguous. Since the language in the 1996 purchase agreement was clear that no additional purchase price was due for final approvals received after closing, Hankin needed to have clear language in the 2003 second amended purchase agreement to change that result. In our opinion, they did not do that. In the end, the only result of these extensive negotiations relating to additional purchase price was to extend the time for determination of the additional purchase price to one year after closing.

The ambiguity of 2003 second amended purchase agreement is confirmed by the receiver’s letter of November 30,2004 (exhibit P-95) which questions whether the one-year period for determining the additional purchase price had started to run from June 24,2004, the date of closing. If the receiver had that question on November 30,2004, he should have had the same question in 2003 when the agreement was being negotiated. Again, since Hankin at that point had leverage because of the allocatur granted by the Supreme Court, Hankin should have insisted on more favorable language, such as the Kaplin proposed language.

Hankin argues that the changes made by Mr. Kaplin and the Hankins in drafting the 2003 second amended purchase agreement can be interpreted so that an additional purchase price is still due. A summary of the principal changes are the following:

• Paragraph 2A(a) providing “the closing date (hereinafter defined)”

• Paragraph 2.A(c) providing “It is contemplated that before the closing date occurs the purchaser will have obtained final approvals for all aspects of the development that the purchaser will construct on the property.”

• Paragraph 2A(e) providing “it being understood that the intent of the concept of ‘additional purchase price’ is to compensate seller for a net increase in value ... to purchaser from final approvals granted for higher density than the permitted uses.”

• The removal from paragraph 2A(c) “additional purchase price shall not be payable in any event with respect to the final approval(s) received after the closing date.”

• The adding of (as defined in paragraph 5 A(a) hereof) to paragraph 4(e).

We agree that had the issue of the Kaplin proposed language not been negotiated and clearly rejected by Realen, these other changes could possibly be interpreted to provide that an additional purchase price is still due. However, we also conclude that on close examination these changes do not in fact support Hankin’s position. Even if they did, as we concluded above, Hankin failed to pursue the very clear solution in the Kaplin proposed language and therefore is barred from arguing that an additional purchase price is still due.

The principal argument that Hankin presents to show a contrary intent is that that the term “closing date” is a defined term and means “90 days after the purchaser has obtained all of the purchaser’s approvals (as defined in paragraph 5 A(a) for the permitted uses).” See paragraph 4(e) of the 2003 second amended purchase agreement. Under this argument, the first anniversary of the closing date would be one year after this definition of “closing date,” and since the purchaser’s approvals were not received on the date of closing, the date to determine the additional purchase price has not yet occurred. While we agree that many of Mr. Kaplin’s changes create confusion, we find that “closing date” as used in the 2003 second amended purchase agreement is the date on which closing occurred. Hankin’s section 4(e) “closing date” interpretation cannot be reconciled with the use of “closing date” in nine other provisions of the amended purchase agreement.

It is clear that in each of those instances, the parties by their conduct have construed the closing date to be June 24,2004 — that is, the date on which the closing on the purchase of the property occurred. The parties have treated June 24,2004 as the closing date for purposes of: (a) the date when the purchase price ceased to escalate in accordance with paragraph 2(a); (b) the date on which the purchase price was paid pursuant to paragraph 2(b); (c) the date as of which the seller made its representations and warranties under paragraph 8 concerning the status of the property; (d) the date on which the seller ceased to have responsibility under paragraph 9 to maintain the property; (e) the date on which the seller’s responsibility to pay all real estate taxes for the property under paragraph 9(6) ceased; (f) the date when possession of the property was transferred from seller to purchaser under paragraph 11(a); (g) the date on which the seller delivered the closing documents provided for under paragraph 11 (b) to the purchaser; (h) the date as of which the real estate taxes were apportioned pursuant to paragraph 12; and (i) the date up until which the seller was responsible to indemnify the purchaser for any environmental issues identified under paragraph 15(h).

Closing date cannot mean the date on which the closing on the purchase of the property occurred in nine out of 10 instances, but mean 90 days after all final approvals were obtained in the tenth instance. Rather, the term closing date must be read consistently throughout the amended purchase agreement. Not only would Hankin’s construction of the term closing date in paragraph 2A(c) nullify other terms in the amended purchase agreement, it would nullify the same term closing date throughout the amended purchase agreement in every other place where that term appears.

The actions of Hankin after June 24,2004 confirm that they understood the date of closing to be the closing date. To be consistent with their present position, the Hankins should have asserted that the escalation provisions were to continue, they would have continued possession of the property including receiving the rent and the maintenance responsibilities, they would have to continue to pay real estate taxes, etc. None of this happened after June 24, 2004. Nowhere in this record is there any evidence that the Hankins ever demanded from Realen the continued escalation. The first time that issue was addressed was in the testimony of Mark Hankin at the hearings before us. Mr. Hankin’s testimony in this regard was not credible. Nor in this record is there any evidence that the Hankins had continued responsibility for the property.

A review of the Kaplin proposed language also shows that the parties understood that the date on which closing occurred and closing date were the same. Mr. Kaplin’s language relates to final approval not obtained by closing date. If closing date is in fact 90 days after the purchaser has obtained all of the purchaser’s approvals (final approvals), how could there be any final approvals not obtained by closing date?

While Hankin raises other arguments in its post-trial brief, we conclude that none of these arguments in and of themselves or together change the result. In view of the foregoing, we conclude that the determination of additional purchase price under the 2003 second amended purchase agreement is to be made one year after the closing on the property that occurred on June 24, 2004.

During this proceeding we and counsel for the parties focused primarily the limited issue of determining the time period during which the additional purchase price was due and owing. However, the complaint for declaratory judgment also raises the issue of whether any additional purchase price is payable by Realen to Hankin. There was some testimony to the effect that plan A and/ or plan B in fact exceeded the requirements set forth in paragraph 2A(a) of the 2003 second amended purchase agreement. The argument is that the decision of the Supreme Court in In re Appeal of Realen Valley Forge Greenes Associates, supra, effectively allowed Realen to develop plan A and plan B, and therefore to the extent these plans exceeded the requirements in paragraph 2A(a), an additional purchase price is due. We do not agree.

Additional purchase price is only due if final approvals are received by June 24,2005, one year after the date of closing. Final approvals are defined in paragraph 2 A(b) (iii) as “all matters, as hereinafter described in subsection 5A(a) hereof as ‘purchaser’s approvals’, which will allow purchaser (or its successors) to immediately, lawfully develop, construct and operate the office buildings, retail buildings, hotels, residential units and all improvements associated therewith contemplated by such final approvals on the property.” In paragraph 5A(a), purchaser’s approvals are defined as “all final, effective and unconditional court orders, zoning changes, subdivision approvals, land development approvals and all other final, effective and unconditional local, state and federal permits, licenses, authorizations, waivers and other permissions, including any private and quasi-governmental easements, rights of way and other authorizations . . . which will allow purchase on the closing date to immediately lawfully develop, construct and operate thereon the permitted uses.”

We have already determined that the closing date was June 24, 2004. Did the Supreme Court in In re Appeal of Realen Valley Forge Greenes Associates, supra, give Realen the unconditional right to develop plan A or plan B on that date? We think not. The Supreme Court remanded the case to the Court of Common Pleas of Montgomery County for further proceedings consistent with its opinion and directed that Realen be afforded “definitive relief” as the successful challenger of the township’s zoning ordinance. In making this ruling, the court refers to Casey v. Zoning Hearing Board of Warwick Township, 459 Pa. 219, 328 A.2d 464 (1974).

The Supreme Court in Casey specifically declined to direct the township to issue permits because the right to those permits was conditioned on other prior approvals that had not yet been given. The identical situation exists here. The court did not direct that Realen be granted final approvals as required by the 2003 second amended purchase agreement. Subject to the supervision of the Court of Common Pleas, Realen needed to proceed with the normal land development process to gain these final approvals. Since Realen received no final approvals by June' 24,2005, no additional purchase price is due from Realen to Hankin under plan A or plan B.

We next will address the issue of whether Realen “has the present right to settle the additional actions (United States District Court for the Eastern District of Pennsylvania docket no. 01-cv-1622 and Montgomery County Court of Common Pleas docket no. 01-6978)” without the consent of the receiver. Amended complaint for declaratory judgment, CCP no. 05-09127, ad damnum clause ¶4 (filed April 9, 2008).

Realen indisputably can settle the additional actions under certain circumstances without the consent of the receiver. Paragraph 7 of the amended joint prosecution agreement sets forth the circumstances under which Realen unilaterally can settle the additional actions. See exhibit P-73 (also marked as exhibit D-110). After providing background information and explaining how the parties may diverge in the remedial relief sought, the second paragraph of sub-paragraph 7F states:

“Because of the foregoing potential conflict of interests, Kaplin required as a condition to instituting the additional actions on behalf of Hankin and Realen, and Realen required as a condition to agreeing to pay the cost of the additional actions that Timoney agree, on behalf of himself and Hankin, that if Realen determines, in its sole discretion, that it is desirable or prudent to settle either or both of the additional actions, Realen shall have the authority to cause Kaplin to settle either or both of the additional actions on behalf of Hankin and the consent of Hankin and/or Timoney shall not be required; but only if any such settlement shall entitle Realen to develop the property for the permitted uses (as defined in paragraph 5A(a) of the amended purchase agreement). Realen shall not have the right to cause the settlement of the additional actions in a manner that would not permit the development of the property for the permitted uses.” (emphasis added)

Very simply, pursuant to this paragraph, Realen unilaterally can settle the additional actions with the township if the settlement is needed for the township to allow Realen to develop the property for the “permitted uses”. “Permitted uses” are defined in paragraph 5A(a) of the 2003 second amended purchase agreement as follows:

“The permitted uses shall consist of:

“(i) a shopping center containing 425,000 square feet of rentable retail area, 642 residential units and 200 hotel guest rooms (or such lesser number as purchaser may determine in its sole and absolute discretion, subject, however, to the limitations provided in the last sentence of paragraph 5A(c) [sic], together with customary and ancillary improvements to the foregoing items; or

“(ii) a shopping center to contain 425,000 square feet of rentable retail area, 942 square feet of rentable office space and 200 hotel guest rooms (or such lesser number as purchaser may determine in its sole and absolute discretion, subject, however, to the limitations provided in the last sentence of paragraph 5A(c) [sic], together with customary and ancillary improvements to the foregoing items; or

“(iii) such other consideration of uses as is satisfactory to the purchaser subject, however, to the limitations provided in the last sentence of paragraph 5A(c).”

Under this paragraph, “permitted uses” are separately defined in the disjunctive. Therefore, for purposes of the amended joint prosecution agreement, only one of the permitted uses needs to be approved by the township. It is equally noteworthy that Realen needs only to receive township approval to develop the property in accordance with one of the three options set forth as “permitted uses”. Consents or permits may still be needed from other authorities, but Realen may only unilaterally settle the additional actions without the receiver’s consent as a condition to obtaining township approval. On the other hand, if through an agreement with the township, Realen already possesses the ability to develop the property in accordance with one of these three permitted uses, Realen cannot unilaterally settle the additional actions.

We must now determine whether Realen already has the ability to develop the property for one of the “permitted uses”. The answer to this question is contained in the settlement agreement regarding development of the Valley Forge golf course property executed between Realen and the township on April 20,2006 (development agreement). The development agreement was submitted by Realen as exhibit P-104 in this proceeding, and thus, is part of the record for our consideration.

Pursuant to the terms of the development agreement, Realen is entitled to develop the property in accordance with at least one, if not more, of the permitted uses. Paragraph 24 of the development agreement provides:

“Notwithstanding that Realen may not have caused the dismissal of the additional actions, for and in consideration of the commitment and release by Realen contained in paragraph 23, the township agrees that Realen shall have the right to commence construction of the town center pursuant to this [development] agreement, provided that the capacity of development of the property ... shall not exceed the following unless and until the additional actions are dismissed with prejudice (the following being the “phase I of the town center”):

“(a) Up to 672 residential units;

“(b) Up to 300 hotel rooms;

“(c) Up to 425,220 square feet of net leasable area of commercial uses (excluding all space within a hotel).

“If Realen exercises the right contained in this paragraph to proceed with the town center and actually commences construction of phase I of the town center pursuant to a building permit issued upon a land development plan approved under this agreement, then Realen shall no longer be permitted to develop the property in accordance with either of the challenge plans. If after electing to construct phase I of the town center, the additional actions are dismissed with prejudice, Realen shall then have the right to develop the property for the entire town center pursuant to the full capacity of development specified in paragraph 9. Because phase I of the town center does not exceed the capacity of development under the challenge plans permitted under the Supreme Court decision, the development of phase I of the town center pursuant to this agreement does not require the issuance of the order approving this agreement in order to proceed. Therefore, Realen may proceed with the development of the property up to the phase I capacity, including without limitation, submission and approval of land development plans and proceeding with construction of phase I of the town center pursuant to the terms of this agreement, notwithstanding the fact that the order may not have been entered by the court. However, Realen may not proceed as of right with the development of the property with a capacity greater than the capacity of phase I of the town center unless the court order approving this agreement has been entered and the additional actions have been dismissed.” See exhibit P-104 (unsigned order approving the attached and executed development agreement, ¶24). (emphasis added)

The approved development on the property is cryptically referred to as “phase I of the town center”. As thereafter defined in paragraph 24, “phase I of the town center” consists of672 residential units, 300 hotel rooms, and 425,500 square feet of net leasable commercial space. This is slightly more than the permitted uses described in sub-paragraph 5A(a)(i) of the 2003 second amended purchase agreement, which consisted of 642 residential units, 200 hotel rooms, and 425,000 square feet of rentable retail area. By the development agreement, the township has approved a development on the property that exceeds sub-paragraph 5A(a)(i) with 30 more residential units, 100 more hotel rooms, and slightly greater net square footage of leasable area, which may be leased for more expansive commercial uses, rather than limited to mere retail usage.

Paragraph 24 concludes with the following: “Realen may not proceed as of right with the development of the property with a capacity greater than the capacity of phase I of the town center unless the court order approving this agreement has been entered and the additional actions have been dismissed(emphasis added) Thus, dismissing the additional actions would entitle Realen to develop the property in a manner that is greater than the standards set forth as permitted uses in subparagraphs 5A(a)(i) and (a)(ii) of the amended purchase agreement. Therefore we conclude that Realen may not settled the additional actions without the receiver’s consent.

As a final matter, we need to address the effect of the court order issued on March 30, 2007 adopting the development agreement as an order of this court. See exhibit P-112 (order, CCP no. 99-16287 on remand from Pa.S.C., 186 MAP 2002 (Albright andFurber, J.J., dated Mar. 30, 2007)). Upon joint motion by Realen and the township, our colleagues in the Court of Common Pleas approved the development agreement and adopted it as an order of this court. The order explicitly provides that it did not and was not to “be construed to have any effect of the rights and remedies of the parties” in this declaratory judgment action or in the other additional actions. See exhibit P-112.

This order does not have any impact on this declaratory judgment action, our interpretation of paragraph 7F of the amended joint prosecution agreement, orRealen’s rights to unilaterally settle the additional actions. In interpreting paragraph 7F of the amended joint prosecution agreement and determining that Realen has no right to settle the additional actions unilaterally, we have relied only upon the development agreement between Realen and the township dated April 20,2006. The development agreement is independent of the court order adopting it.

Pursuant to the development agreement, a court order is necessary only in order to develop all of the town center land use plan. See exhibit P-104 (development agreement, ¶¶5,24). “Realen may not proceed as of right with the development of the property with a capacity greater than the capacity of phase I of the town center unless the court order approving this agreement has been entered and the additional actions have been dismissed.” See exhibit P-104 (development agreement, ¶24). The township, in paragraph 24 of the development agreement, acknowledges that court approval is not necessary in order to authorize development on the property of phase I of the town center: “Because phase I of the town center does not exceed the capacity of development under the challenge plans permitted under the Supreme Court decision, the development of phase I of the town center pursuant to this agreement does not require the issuance of the order approving this agreement in order to proceed.” See exhibit P-104 (development agreement, ¶24). (emphasis added) See exhibit P-104 (development agreement ¶¶5, 24). It is the development of phase I of the town center that we have determined is one of the “permitted uses” under paragraph 5A(a) of the amended purchase agreement. Because the development agreement permits this development on the property independent of the court’s order of March 30,2007, the issuance of the March 30, 2007 order has no effect on the rights and remedies of the parties in this declaratory judgment proceeding.

In view of the foregoing opinion, the following order is appropriate.

ORDER

And now, December 21, 2009, after consideration of all the pleadings, the testimony and the briefs of counsel, it is hereby ordered and decreed that:

(1) Any additional purchase price under the 2003 second amended purchase agreement must be determined as of June 24, 2005;

(2) Since Realen did not obtain any final approvals by June 24, 2005, Realen is not required to pay Hankin an additional purchase price; and

(3) Realen does not have the present right under the amended joint prosecution agreement to settle the additional actions (United States District Court for Eastern District of Pennsylvania, docket no. 01-cv-1622 and Montgomery County Court of Common Pleas docket no. 01-6978) without the consent of the receiver.

      . Hankin had been in receivership for many years. Thomas J. Ti-money, Esq. is the receiver.

      . Realen is a Pennsylvania General Partnership whose partners are Realen Golf Communities L.P. and the Northwestern Mutual Life Insurance Company.

      . The receiver also filed a supplemental petition on April 25, 2003.

      . 2003 second amended purchase agreement.

      . There are two documents that are helpful in examining this question. First is exhibit P-120 which is a comparison of different language relating to closing that was ultimately set forth in paragraph 4E of the 2003 second amended purchase agreement. Second the parties submitted a “joint ‘section 2A(c)’ exhibit” which was a comparison of the changes to section 2A(c) from the 1996 purchase agreement through the 2003 second amended purchase agreement.

      . This language remained the same in the 1997 amended purchase agreement.

      . The only change to the language in paragraph 4(a) that ultimately became paragraph 4(e) the final 2003 second amended purchase agreement was the addition of “as defined in paragraph 5A(a)” immediately after purchaser’s approvals. See exhibit P-46 as part of exhibit P-120.

      . This italicized language will be referred to in this opinion as “the Kaplin proposed language.”

      . Interestingly, this draft was not sent to the receiver who was the party ultimately responsible for signing the agreement on behalf of the Hankins. This same draft was included with a January 17 email to Mr. Shanken and Mark Hankin with a copy to the receiver, although it does not appear to be redlined to highlight the italicized language. See also, evolution of ¶2A(c), tab B, at section 5.

      . It should be noted that this language was never added back to any subsequent draft of this agreement.

      . The “aspects of development” language remained in the final version of this agreement.

      . Throughout this opinion underlined text indicates proposed insertions; underlined and stricken-through text indicates proposed deletions.

      . Subparagraph 2A(b)(iii) essentially equates “purchaser’s approvals” with “final approvals.”

      . See Trombetta v. Raymond James Financial Services Inc., 907 A.2d 550, 560 (Pa. Super. 2006) (“Terms in one section of the contract, therefore, should never be interpreted in a manner which nullifies other terms in the same agreement”); Capek v. DeVito, 564 Pa. 267, 273-74, 767 A.2d 1047, 1050 (2001); see also, Robert F. Felte Inc. v. White, 451 Pa. 137, 144-45, 302 A.2d 347, 351 (1973).

      . The reference to the last sentence of paragraph 5A(c) is inadvertently inaccurate as the last sentence defines a previously unused term, namely “comparable value”. It is believed that the reference really should be to the second to last sentence of paragraph 5A(c) which addresses the ability of the purchaser, namely Realen, to reduce the rentable retail area, number of residential units or number of hotel rooms. Whatever the proper reference, it is not relevant for purposes of the court’s discussion interpreting sub-paragraph 7F.


source: Caselaw Access Project

author: SMYTH, J,

license: Public Domain

text:
    Griffith Energy Services Inc. v. Heavy Haulers Inc.
    C.P. of Montgomery County,
    no. 08-17482.

      Kathleen O ’Connell Bell, for plaintiff.

      Gregory DiPippo, for defendants.
    August 30, 2009
   SMYTH, J,

This is an action to collect sums due on a commercial contract for deliveries of diesel fuel by plaintiff Griffith Energy Services to defendant Heavy Haulers Incorporated. Co-defendant Jena Rubbo signed the application for credit with Griffith as owner and president of Heavy Haulers and also executed a personal guarantee. The complaint claimed defendants failed to make payment on certain deliveries of fuel under the contract. In answer to the complaint and in response to requests for admissions, defendants admitted that deliveries of fuel were made and that money is owed but professed to be unsure of the exact amount. (See defs.’ answers pl.’s req. admis. ¶¶1-6.)

Plaintiff moved for summary judgment in the amount of $27,564.67. In an answer to the motion and supporting brief, defendants raised as the sole issue of material fact precluding summary judgment that the amount sought in the motion for summary judgment varied by approximately $6,000 from the amount sought in the complaint. (Br. supp. def.’s ans. pl.’s mot. summ. j. 2.) At oral argument on the motion, plaintiff’s counsel pointed out that the discrepancy had been corrected in an amended complaint. The court has reviewed the amended complaint and confirmed that the amount demanded therein is the same as the amount of the judgment sought in the motion. Defendants’ counsel at oral argument (which he participated in via conference call) raised an entirely new issue not raised in the written response to the motion or supporting brief. He conceded that judgment in the amount sought would be proper against the corporate defendant, Heavy Haulers, but argued that there were genuine issues of material fact whether the contract was unenforceable against the personal guarantor as a contract of adhesion. With the court’s permission plaintiff submitted a supplemental memorandum addressing this issue first raised at oral argument. The motion for summary judgment is now ripe for decision.

Summary judgment as a matter of law is appropriate

“(1) whenever there is no genuine issue of any material fact as to a necessary element of the cause of action or defense which could be established by additional discovery or expert report, or

“(2) if, after completion of discovery relevant to the motion, including the production of expert reports, an adverse party who will bear the burden of proof at trial has failed to produce evidence of facts essential to the cause of action or defense which in a jury trial would require the issues to be submitted to a jury.” Pa.R.C.P. 1035.2.

“(a) . . . [T]he adverse party may not rest upon the mere allegations or denials of the pleadings but must file a response within 30 days after service of the motion identifying

“(1) one or more issues of fact arising from evidence in the record controverting the evidence cited in support of the motion or from a challenge to the credibility of one or more witnesses testifying in support of the motion, or

“(2) evidence in the record establishing the facts essential to the . . . defense which the motion cites as not having been produced.

“(b) An adverse party may supplement the record or set forth the reasons why the party cannot present evidence essential to justify opposition to the motion and any action proposed to be taken by the party to present such evidence.” Pa.R.C.P. 1035.3(a)-(b).

In addition, under the rules of pleading, Pa.R.C.P. 1019(a) and Pa.R.C.P. 1029, a general denial of the amounts claimed to be due and owing under a contract or a statement that the pleader is without knowledge or information sufficient to form a belief as to such amounts is deemed an admission and fails to raise a genuine issue of material fact to overcome a motion for summary judgment where the pleader clearly must know the truth or falsity of the opponent’s allegations and the motion for summary judgment is adequately factually supported. See First Wisconsin Trust Co. v. Strausser, 439 Pa. Super. 192, 653 A.2d 688 (1995). In Strausser, the Superior Court affirmed a grant of summary judgment for a mortgagee in an action in foreclosure, holding a mortgagor’s denial as a conclusion of law of the amounts of principal and interest alleged to be due on a mortgage in effect constituted admissions of the amounts due. “ [Unquestionably,” the court said, “apart from [the mortgagee], [mortgagors] are the only parties who would have sufficient knowledge on which to base a specific denial.” 439 Pa. Super, at 200, 653 A.2d at 692; accord New York Guardian Mortgage Corp. v. Dietzel, 362 Pa. Super. 426, 524 A.2d 951 (1987) (affirming summary judgment in foreclosure for mortgagee, holding answers stating that mortgagors were without information sufficient to form belief as to the truth of mortgagee’s averment as to principal and interest due was a general denial and to be considered admission of those facts); see also, Pa.R.C.P. 1029(c) note (“Reliance on subdivision (c) does not excuse a failure to admit or deny a factual allegation when it is clear that the pleader must know whether a particular allegation is true or false.” (citing Cercone v. Cercone, 254 Pa. Super. 381, 386 A.2d 1 (1978))).

Under these authorities, defendants’ attempt to overcome summary judgment by vaguely pleading lack of knowledge of the precise amounts due and owing for the deliveries of fuel must fail, and the amounts pled in the complaint and supported in the motion for summary judgment must be taken as established. The discrepancy between the amount claimed in the original complaint and the amount sought in the motion raised in defendant’s brief as a genuine issue of material fact is adequately resolved in the amended complaint, which claims an amount due and owing that is identical to the amount of the judgment sought in the motion. Further contest to the validity of the amounts claimed to be due is waived by defendants’ counsel’s admission at oral argument that summary judgment against the corporate defendant in the amount sought would be proper. Cf. Harber Philadelphia Center v. LPCI Ltd., 764 A.2d 1100, 1105 (Pa. Super. 2000) (“Our application of the summary judgment rules in Payton [v. Pennsylvania Sling Co., 710 A.2d 1221 (Pa. Super. 1998)] establishes the critical importance to the non-moving party of the defense to summary judgment he or she chooses to advance. A decision to pursue one argument over another carries the certain consequence of waiver for those arguments that could have been raised but were not.”).

The defense first raised at oral argument, that the contract was a contract of adhesion as to the personal guarantor, Jena Rubbo, is likewise waived, as the defense is raised nowhere in the written response to the motion for summary judgment or the brief in support of the response. Cf. id. at 1105-1106 (holding argument not raised in written response to a motion for summary judgment or briefs in opposition to summary judgment were waived and summary judgment was affirmed). The argument is also waived because defendants neither discharged their burden under Pa.R.C.P. 1035.3(a) of proving the elements of the defense of contract of adhesion by adducing or pointing to evidence in the record in written response to the motion for summary judgment, nor sought under Pa.R.C.P. 1035.3(b) to supplement the record or set forth reasons why such evidence could not be produced. Cf Payton v. Pennsylvania Sling Co., 710 A.2d 1221, 1226 (Pa. Super. 1998) (affirming summary judgment against argument further discovery could have led to evidence sufficient to establish a claim where plaintiff neither adduced nor sought to adduce such evidence in the trial court).

The concept upon which counsel seized at oral argument, contract of adhesion, is defined as a standardized contract form offered to consumers of goods and services on essentially a “take it or leave it” basis without affording the consumer a realistic opportunity to bargain and under such conditions that the consumer cannot obtain the desired product or services except by acquiescing in the form contract; the distinctive feature of a contract of adhesion is that the weaker party has no realistic choice as to its terms; furthermore not every such contract is unconscionable. Denlinger Inc. v. Dendler, 415 Pa. Super. 164, 174-75, 608 A.2d 1061, 1066 (1992) (reversing summary judgment based on doctrine of contract of adhesion granted to the sole owner of a building company who had signed an application for credit on the company’s behalf with a corporate supplier of building materials). “Although the party challenging the contract or provision bears the burden of affirmatively pleading and proving the unconscionab[leness] ... the actual determination of unconscionab[leness] is a question of law for the court.” Id. at 175-76, 608 A.2d at 1067. (citations omitted)

The facts of Dendler itself are legally indistinguishable from those of this case — to the extent any facts relevant to contract of adhesion have even been brought forth here. There, the owner of a contracting company had regularly purchased building materials and supplies from a corporate supplier on a cash-only basis; however, after he incorporated the company, the supplier offered an application for credit, which the owner signed, opening an account under which the company could buy supplies on credit. Id. at 167, 608 A.2d at 1062-63. The company went into bankruptcy, at the time owing the supplier a substantial sum of money for materials that had already been delivered and accepted. Id. at 168, 608 A.2d at 1063. The supply company sued the owner personally to recover its losses, as permitted under the application for credit; the owner pled as an affirmative defense that the application was an unconscionable contract of adhesion. Id. The trial court agreed and granted summary judgment to the owner of the building company. Id. On appeal, the Superior Court of Pennsylvania reversed the trial court, id. at 167, 608 A.2d at 1062, finding the application was not a contract of adhesion.

Although the factual record in Dendler was apparently much more developed on the parties’ business relationship and relative bargaining power than is the record before us, the Superior Court relied heavily on the facts, which are equally present in our case, that neither party to the contract was a consumer, but rather both were corporate, commercial enterprises. Id. at 173-74, 608 A.2d at 1066. The court wrote that “it would be improper to borrow, without differentiation, concepts developed to protect consumers and employ them in favor of one commercial party over another.” Id. at 174, 608 A.2d at 1066. The court also observed that our courts have “refused to hold contracts unconscionable simply because of a disparity in bargaining power.” Id. at 176, 608 A.2d at 1067. The court concluded that the application for credit was not so bewildering or fine in terminology that the owner of the contracting company could credibly claim he did not understand the terms, or his personal liability under them; hence the contract was not unconscionable as a matter of law. Id. at 177-82, 608 A.2d at 1068-70.

The facts of the present case, as far as we know from defendants’ meager written presentations in opposition to summary judgment, are not materially different. The application for credit was a commercial contract at arms’ length between two corporations, one a supplier of diesel fuel, the other a firm engaged in the heavy trucking business. The supplier made deliveries on credit under the application, such that at the time the trucking company defaulted on its obligation, deliveries of fuel had been made and accepted but not paid for in full. Defendant Rubbo signed the application as owner of the trucking company, and also as personal guarantor of payment on the credit extended. There is no evidence of record, certainly none pointed to in the response and brief opposing the motion for summary judgment, to establish that the parties’ bargaining power was unequal or that there were no other local suppliers of diesel fuel such that the contract was “take it or leave it,” or that defendant Rubbo was unsophisticated in the ways of such commercial contracts or in the meaning of the personal guarantee she signed to get her company deliveries of fuel on credit. “Where, as here, the debtor has not alleged fraud, and has produced no evidence to show a lack of capacity to understand the document signed, or that he or she had asked for an explanation of the contract language, the debtor must be held to the contract’s terms.” Germantown Savings Bank v. Talacki, 441 Pa. Super. 513, 522, 657 A.2d 1285, 1289-90 (1995) (holding guarantor of commercial debt was bound by warrant of attorney that allowed confession of judgment against her printed in the same size type as other provisions in the guaranty she had signed).

To summarize, defendants have abandoned the only alleged genuine issue of material fact raised in their answer and brief in opposition to summary judgment, that the amount sought in the motion for summary judgment differed from the amount sought in the complaint, by conceding at oral argument that judgment in the amount sought in the motion would be proper against the corporate defendant, Heavy Haulers. Moreover, any discrepancy is resolved by the amended complaint, which pleads the exact same amount due and owing as the motion. The defense raised for the first time at oral argument that Heavy Haulers’ owner and personal guarantor on the application for credit, defendant Rubbo, is exempt from individual liability because the guarantee was a contract of adhesion which she did not understand is both waived and factually unsupported as not being substantiated by the written responses to the motion or the evidence of record as required by Pa.R.C.P. 1035.3, and legally without merit. Summary judgment is hereby entered for plaintiff and against defendants in the amount of $27,564.67.


author: SPATARO, J.,

text:
    Howick v. Chiappazzi

      C.P. of Crawford County,
    no. A.D. 2009-1765.

      Alan L. Pepicelli, for plaintiffs.

      Mark E. Mioduszewski, for defendant.
    January 12, 2010
   SPATARO, J.,

Before the court are the defendant’s motion to strike the plaintiffs’ objections to defendant’s notice of intent to serve subpoenas pursuant to Pa.RC.P. 4009.21 and the defendant’s preliminary objections to the plaintiffs’ amended complaint. We will first address the defendant’s motion to strike plaintiffs’ objections to subpoenas.

This case arises out of a motor vehicle accident, which occurred on November 8, 2007, on Park Avenue in Meadville, Pennsylvania. Plaintiffs, Albert and Sandra Howick, allege that the defendant, Eugene Chiappazzi, drove his motor vehicle into the rear of a motor vehicle operated by the plaintiff, Albert Howick. Plaintiffs allege that Mr. Howick suffered a large number of serious and severe injuries including injuries to his back, neck, spine, shoulders, ribs, torso, and brain. Plaintiffs also allege that Mr. Howick suffered impairment of earnings and has incurred, and will continue to incur, medical and hospital expenses.

Before plaintiffs filed suit, defendant received approximately 80 pages of medical records from his liability insurance carrier. Plaintiffs filed a praecipe for issuanee of writ of summons on September 22, 2009. On October 13, 2009, the defendant served plaintiffs with interrogatories and requests for production of documents identifying all health care providers involved in Mr. Howick’s care, both before and after the accident, and requested authorizations from plaintiffs for such information. Defendant alleges that the plaintiffs did not respond to this discovery request, so defendant identified several health care providers from the 80 pages of medical records they received. Plaintiffs filed a complaint in civil action against defendant on October 22,2009. Defendant reviewed the medical records and concluded that the injuries alleged by plaintiffs were not in conformity with the injuries as stated in the medical records he possessed at that time.

Defendant then filed a notice of intent to serve subpoenas pursuant to Pa.R.C.P. 4009.21 in order to obtain medical records from those providers that were indicated to have rendered medical care to Mr. Howick. Plaintiffs filed obj ections to the notice and the subpoenas, claiming that the subpoenas are irrelevant, immaterial, overly broad, and unduly burdensome. Plaintiffs point to this court’s opinion, Slayton v. Biebel, 37 D.&C.4th 140 (Crawford Cty. 1998), as the basis for finding that the defendant’s notice and subpoenas were out of compliance with the law. Plaintiffs believe that the subpoenas as prepared request records that relate to medical treatment of any and every kind or nature, without any bounds and without regard to any specified time period.

Defendant responds by stating that he was not seeking to proceed in contravention of the decision made by the Honorable Anthony J. Vardaro in Slayton, but in fact seeks to follow the exact protocol laid out by Judge Vardaro in Slayton. Slayton arose out of a motor vehicle accident, and similar to the matter before this court, the defendant served the plaintiff with a notice of intent to serve subpoenas on the plaintiff’s health care providers. 37 D.&C.4th at 140. The plaintiff in Slayton argued that the subpoenas might allow the defendant to obtain medical records that were not relevant to the injuries or conditions that were the basis for plaintiff’s suit. Id. at 144. The defendant was concerned that it was not possible to know whether records that were fully discoverable may end up being kept from the defendant because the plaintiff would be deciding what records were relevant. Judge Vardaro crafted an order in Slayton that sought to appease the concerns of both parties, which reads in pertinent part:

“[defendant] may serve each subpoena he wishes to serve upon medical providers so long as the records requested by each such subpoena are required to be forwarded directly to counsel for the plaintiff.

“Counsel for the plaintiff shall promptly review all such subpoenaed records and documents and forward to counsel for defendant Biebel all records which plaintiff’s counsel deems to be those relevant to this proceeding, along with a brief description of the records not provided and an explanation as to why those records were not provided.

“Furthermore, plaintiff’s counsel shall forward to counsel for Biebel an affidavit providing that the records produced and those expressly withheld compromised the whole of the subpoenaed records and documents.

“Thereafter, if there are any unresolved disputes regarding the discovery of the subpoenaed records and documents, counsel for defendant Biebel may file an appropriate motion with the court asking that there be an in camera inspection regarding any records that may be in dispute so that the court may determine if there is anything that is further discoverable.” Id. at 147-48.

Defendant asks this court to enter an order striking the objections of the plaintiffs to the defendant’s notice of intent to serve subpoenas and craft an order allowing the parties to proceed in conformity with Judge Vardaro’s protocol delineated in Slayton.

Plaintiffs, despite the conciliatory stance taken by defendant, argue that the notice and subpoenas prepared by the defendant do not seek documents that relate to the care provided to Mr. Howick in relation to the accident. Plaintiffs contend that the defendant’s subpoenas improperly request records that relate to all of Mr. Ho wick’s medical care, regardless of any association to the accident with regard to both content and time period. Plaintiffs contend that Mr. Howick has not claimed a universality of injuries, but has in fact claimed specific injuries as stated in paragraph 10 of the amended complaint. Plaintiffs argue that the defendant’s subpoenas do not comport with the law in Slayton and maintain their objections to the defendant’s notice of intent and the subpoenas.

The protocol stated by Judge Vardaro in Slayton v. Beibel is the proper approach that will address the concerns of both parties; therefore, we will strike the plaintiffs’ objections and enter an order directing the parties to proceed in conformity with Judge Vardaro’s decision in Slayton.

Next we will address the defendant’s preliminary objections to the plaintiffs’ amended complaint. Defendant filed a preliminary objection to the amended complaint seeking to strike the phrase “some or all of” which appears twice in the prefatory clause of paragraph 10 of the plaintiffs’ amended complaint. Defendant previously requested plaintiffs to remove the language “including without limitation” from an alternate paragraph in the original complaint, in addition to their current request, and the plaintiffs complied in their amended complaint; however, plaintiffs refuse to remove the phrase “some or all of” from the amended complaint.

Defendant states that the prefatory clause of paragraph 10 in the amended complaint is the type of allegation commonly referred to as a “catch all” or “shotgun” allegation, and sets forth their objection in the form of a Connor objection seeking to prevent plaintiffs from expanding or amplifying their claims with regard to Mr. Howick’s injuries. Connor v. Allegheny General Hospital, 501 Pa. 306, 311, 461 A.2d 600, 603 (1983). The clause at issue reads:

“As a direct and proximate result of the aforesaid matters, the plaintiff, Albert E. Howick, Jr., sustained some or all o/the following serious and severe injuries, some or all of which may be permanent in nature:____” (Plaintiffs’ amended complaint, ¶10.) (emphasis added)

Defendant contends that there is no way for them to know with any degree of reliability what injuries were actually sustained by Mr. Howick, which impairs his ability to properly prepare a defense. Defendant states that this lack of specificity in the amended complaint is complicated further by the plaintiffs’ failure to respond to discovery requests, and the plaintiffs’ attempts to block his subpoenas for medical records. Defendant argues that he has been blocked from all avenues in attempting to determine what injuries Mr. Howick did in fact sustain, injuries that could be unfairly expanded upon because of the ambiguous nature of the amended complaint. Defendant asks this court to strike “some or all of” from the prefatory clause of paragraph 10 in the plaintiffs’ amended complaint.

Plaintiffs respond by arguing that they have not vaguely alleged any injuries, but have in fact alleged specifically that Mr. Howick suffered injuries to his neck, middle and lower back, shoulders, ribs, a concussion, and any consequent injuries as a result of the aforementioned. Plaintiffs state that the defendant’s reliance upon Connor is misplaced because the paragraph at issue is in relation to damages and injuries, as opposed to allegations of negligence. Plaintiffs state further that the prefatory paragraph at issue must be reviewed in the context of the subparagraphs following, wherein the outside parameters of Mr. Howick’s injuries are specifically defined. Plaintiffs ask this court to overrule defendant’s preliminary objections because striking the language from the prefatory paragraph would only cause confusion about the extent of Mr. Howick’s injuries.

Although plaintiffs correctly point out that Connor deals with catch-all phrases involving claims of negligence that are at risk of being amplified or expanded upon in a manner that may be prejudicial to a defendant, the defendant is still entitled to bring preliminary objections asserting lack of specificity and the failure to conform to Pa.R.C.P. 1019(a). Rule 1019(a) states that the material facts upon which a cause of action is based must be stated in a concise and summary form, and this would include averments regarding damages and injuries in a tort action as is presently before the court. Pa.R.C.P. 1019(a). The prefatory clause as it currently reads allows for the possibility that the injuries listed in the subparagraphs may not have actually been incurred by Mr. Howick. The defendant would be placed in a position where he would have to prepare a defense for all of the injuries listed; only to later learn that Mr. Howick only suffered from some of the injuries listed, while the others were only superfluously listed. Plaintiffs are in the best position to know what injuries Mr. Howick suffered; therefore, there is no practical reason for using such ambiguous language in the prefatory clause. Plaintiffs have averred that they have specifically listed each injury suffered by Mr. Howick in the amended complaint, so the allegations should reflect that Mr. Howick suffered all of those injuries as opposed to only some of them.

Finally, we do agree with plaintiffs that the phrase “some or all of which may be permanent in nature,” located in the next clause of the prefatory paragraph, is a legitimate description of the nature of Mr. Howick’s injuries. Although the plaintiffs are expected to know what injuries Mr. Howick suffered, there is a reasonable basis for finding that the plaintiffs cannot be expected to know exactly which injuries that Mr. Howick suffered are permanent in nature. The plaintiffs are not required to diagnosis or provide a prognosis about the permanency of Mr. Howick’s injuries in their complaint.

Accordingly, we enter the following order:

ORDER

And now, January 12, 2010, this court dismisses the plaintiffs’ objections to defendant’s notice of intent to serve subpoenas and orders that counsel for the defendant, Eugene A. Chiappazzi, may serve each subpoena he wishes to serve upon medical providers so long as the records requested by each such subpoena are required to be forwarded directly to counsel for the plaintiffs, Albert E. Howick Jr. and Sandra L. Howick, his wife.

Counsel for the plaintiffs shall promptly review all such subpoenaed records and documents and forward to counsel for the defendant all records which plaintiffs’ counsel deems to be those relevant to this proceeding, along with a brief description of the records not provided and an explanation as to why those records were not provided.

Furthermore, plaintiffs’ counsel shall forward to counsel of the defendant an affidavit providing that the records produced and those expressly withheld compromised the whole of the subpoenaed records and documents.

Thereafter, if there are any unresolved disputes regarding the discovery of the subpoenaed records and documents, counsel for the defendant may file an appropriate motion with the court asking that there be an in camera inspection regarding any records that may be in dispute so that the court may determine if there is anything that is further discoverable.

Additionally, this court sustains in part, and overrules in part, the preliminary objections of the defendant. The first appearance of “some or all of” will be stricken from the prefatory paragraph at paragraph 10 of the plaintiffs’ amended complaint. The second appearance of “some or all of” will not be stricken and the paragraph in question should read as follows:

“(10) As a direct and proximate result of the aforesaid matters, the plaintiff, Albert E. Howick Jr., sustained the following serious and severe injuries, some or all of which may be permanent in nature:....”

The plaintiffs are afforded 20 days from this date to amend paragraph no. 10 in conformity with this order, by removing or adding to the list of injuries. Defendant shall file a responsive pleading within 20 days of the date of the amendment.


author: SCHMEHL, P.W., J,

text:
    In re B.B. and A.M.

      C.P. of Berks County,
    nos. CP-06-DP-211-2009 and CP-06-DP-212-2009.

      Mary C. Favinger, for Mother.

      Jennifer L. Grimes, for BCCYS.

      Cathy M. Badal, guardian ad litem for B.B. and A.M.
    February 12, 2010
   SCHMEHL, P.W., J,

This matter came before the court on dependency petitions filed by Berks County Children & Youth Services (BCCYS), which sought a judicial determination as to whether the children, B.B., date of birth April 20, 2007, and A.M., date of birth March 23, 2009 are dependent children as defined by the Juvenile Act at 42 Pa.C.S. §6302. The children’s mother is R.M.J. (Mother). B.B.’s father is M.B., and A.M.’s father is E.M. (Father). M.B. has not been involved in the matter. Mother and her then only child came to the attention of BCCYS on June 2, 2008. The dependency petitions were filed on November 25, 2009.

The petitions aver that the children are dependent under 42 Pa.C.S. §6302(1), which defines “dependent child” as one “without proper parental care or control, subsistence, education as required by law, or other care or control necessary for his physical, mental, or emotional health, or morals. A determination that there is a lack of proper parental care or control may be based upon evidence of conduct by the parent, guardian or custodian that places the health, safety or welfare of the child at risk, including evidence of the parent’s, guardian’s or other custodian’s use of alcohol or a controlled substance that places the health, safety or welfare of the child at risk.” BCCYS further specifically averred it to be contrary to the welfare, safety and health of the children to remain under the care of Mother.

When Mother and her 1-year-old child, B.B., came to the attention of BCCYS in June 2008, the report was that Mother was without a home, moving from friend’s house to friend’s house. Six weeks later she confirmed with the BCCYS caseworker that she was moving again because Father, one of the people with whom she was living, had threatened her and their unborn child. Two weeks later, at the end of July 2008, she moved again into the home of her mother; however, Mother claimed to BCCYS that she was living at both her mother’s home and Father’s house. During all of this time, Signature Family Services was attempting to set Mother up with housing through Mary’s Shelter. Although Mother had a series of objections to Mary’s Shelter, she maintained sufficient interest that Signature Family Services and BCCYS made a series of efforts to coordinate and acquire housing at Mary’s Shelter. When these agencies succeeded in Januaiy 2009, Mother turned it down, preferring instead to move back in with Father, despite both parties lacking participation in domestic violence treatment.

In August 2008, BCCYS informed Mother that she and Father would need to cooperate with a domestic violence evaluation and recommended services. Their cooperation was poor.

In October 2008, BCCYS learned that Father had bought a gun and was using it to intimidate Mother. Less than a month later, Mother and Father indicated to BC-CYS that they wanted to go to couples counseling rather than be evaluated by Berks Advocates Against Violence; however, they relented and agreed to the evaluations. Both were recommended for ongoing services.

In early December 2008, Mother again moved, this time out of her mother’s home and back in with Father and his mother. A month later, Mother was again moving out because Father had hit her again. She stayed with her mother who ousted her the next day after an altercation. Two weeks later, Mother and Father had rented an apartment together.

Despite efforts made by BCCYS to encourage Mother’s participation in domestic violence counseling, Mother resisted by attempting to arrange counseling with a different provider and then failing to follow through, canceling appointments. Even after BCCYS organized a family decision making meeting where Father agreed to arrange domestic violence counseling by a certain date, he failed to do so.

In March 2009, when Mother was giving birth to A.M., Father felt that it was the appropriate time to yell at Mother about getting a paternity test and other issues such as child support and created such a horrible scene that hospital personnel had to remove Father.

In April 2009, Mother, Father and the children left their apartment and moved back in with Father’s mother. Another domestic dispute occurred and Father kicked Mother out of the home. Thereafter, Mother informed BCCYS just how controlling Father can be, not allowing her to make phone calls, have her own key to the home, or even control the money even though she was the only one working. Mother claimed that Father threatened her that he would take A.M. and never let her see the child again. Mother initiated the process of obtaining a protection from abuse order, but failed to follow through because she did not want keep Father from seeing the child. As of April 21,2009. Father still had not scheduled any domestic violence treatment.

In May 2009, the family moved back in together at the home of Father’s mother. Mother also informed BCCYS that she wanted to choose yet another provider for domestic violence counseling. Less than a month later, Mother was reporting to BCCYS that she was getting a PEA on Father because he flashed his gun at her brother, that Father was upset because he wanted to take A.M. to a friend’s house to smoke weed, and that Father felt the child would not be inappropriately exposed to second hand marijuana smoke because he had plan of covering the child’s face with a blanket. Mother also admitted to Father’s punching her in the stomach when she was pregnant, spitting in her face, and often pulling her hair. Within the week, BCCYS learned that the family went to the beach together, although there was a PFA on Father.

On or about June 19, 2009, Mother and the children moved in with Mother’s cousin. By September, Mother was kicked out of the home because the cousin believed Father was inappropriately disciplining B.B. and Mother did not agree. BCCYS also learned on June 19, 2009 that Mother had dropped the PFA against Father. Through the remainder of 2009, Mother continued to change her preference for the provider of domestic violence counseling, continued to be without stable housing, and continued to maintain a relationship with an abusive paramour.

Ultimately, BCCYS file a dependency petition because of its belief that the children would not be safe in Mother’s home because she cannot provide a protective factor against her abusive boyfriend.

At the hearing on the petition, Mother’s counsel elicited testimony from the BCCYS caseworker that there was a period of time when the case had been closed because of Mother’s and Father’s display of an end to the relationship. If in fact such a display was accurate and not simply an exercise of misdirection to end the involvement of BCCYS, it would seem that Mother does not have the ability to stay away from this dangerous man. Also, on cross-examination, the caseworker indicated that he was recently informed of Mother’s obtaining an apartment and engaging in domestic violence counseling. It was clear to the court that the caseworker was not confident that these last minute efforts were genuine and anything other than an insincere last ditch attempt to prevent removal of the children from her care.

In concluding the hearing on the dependency petition, respective counsel for Mother and Father made arguments that their clients were on track to improve their lives by starting domestic violence counseling, enrolling in classes atRACC (Father), and expressing a willingness to participate in services. BCCYS and the children’s guardian ad litem countered that this pattern is nothing new.

Mother and Father never took the stand to testify as to their efforts to take advantage of the services offered to them, their efforts to stabilize their and consequently the children’s living arrangements, or the steps that they have allegedly taken or intend to take to protect themselves and more especially the children from being victims or witnesses to domestic violence.

All indications from the testimony provided were that the children are not safe in Mother’s care and even less so if they were to be in Father’s care. Neither Mother nor Father presented any case to the contrary. Mother and Father have failed to provide care and control necessary for the children’s physical, mental and emotional health and morals, and to not declare the children dependent and to not remove the children from the care and custody of Mother and Father would be to condemn them to a nomadic life of domestic violence that would leave them scarred, if not physically at least emotionally and morally. Clearly the health, safety and welfare of the children are at risk so long as they are in the custody of Mother who does not have the common sense to stay away from a violent and controlling man who is no worthy role model for a child.

For the foregoing reasons, the court found the children to be dependent and in need of placement.