author: BURR, S.J.,

text:
    Lafferty v. Estep

      Dorm L. Guthrie, for plaintiff.

      Michael D. Power, for defendant.
    May 19, 2011
   BURR, S.J.,

The defendant/petitioner, Ralph V. Estep (hereinafter, “defendant”), has appealed from this court’s order, following a hearing, denying his petition to open the judgment confessed against him by the plaintiff/respondent, David T. Lafferty (hereinafter, “plaintiff’), subsequent to the defendant’s default on payments due on a mortgage balloon note issued by the plaintiff as consideration for the defendant’s purchase of plaintiff’s real property situated at 42 Woodland Drive in Chadds Ford Township, Pennsylvania (hereinafter “premises”).

The plaintiff’s complaint for confession of judgment sets forth the following allegations against the defendant: (1) that, on or about January 3, 2007, the defendant executed and delivered to the plaintiff a balloon note in the original principal sum of $ 1,300,000.00 evidencing his indebtedness to the plaintiff and that the defendant failed to pay all of the monthly installments due and owing on that indebtedness to the plaintiff; (Id., ¶¶ 3-5; a copy of the balloon note is appended as “Exhibit A” to the plaintiff’s complaint for confession of judgment); (2) that by virtue of defendant’s default, and by the terms of the balloon note, the entirety of its principal became due, payable and collectible in full without notice to the defendant. (Id., ¶ 6); (3) that the defendant was sent notice of default and acceleration on or about August 20, 2010, as well as the plaintiff’s demand for payment in full of the entire unpaid balance, principal, interest and other sums due and owing under the balloon note; (Id., ¶¶ 7-9)(a copy of the default notice sent to the defendant is appended as “Exhibit B” to the plaintiff’s complaint for confession of judgment); and (4) that the defendant has failed to remit the foregoing payment in this non-consumer credit transaction upon notice and demand upon him to do so, and the plaintiff has confessed judgment as authorized under paragraph 7 of the balloon note pursuant to a warrant of attorney that is less than twenty years old. (Id., ¶¶ 10-13).

Paragraph 7 of the subject balloon note states that the defendant granted Warrants of Attorney for the confession of judgment upon default and that he “knowingly, intentionally, voluntarily, and unconditionally waive(s) any and all rights [he] may have to prior notice and opportunity for hearing under the respective Constitutions and laws of the Commonwealth of Pennsylvania and the United States of America.” (Id., Exhibit Ato the complaint for confession of judgment, p. 3). The confession of judgment clause which follows this statement and which was initialed by the defendant is set forth in its entirety below:

“Upon the occurrence of an event of default, maker, without further consent or notice, does hereby irrevocably and unconditionally authorize and empower any attorney o[r] the prothonotary of any court of record of the commonwealth of Pennsylvania or elsewhere to appear for maker in any such court, and with or without a complaint or declaration filed, in an appropriate action brought against maker on this note, to enter and confess judgment against maker in favor of payee or its successors and assigns, for all or any portion of the entire amount due to payee upon such event of default as provided herein, together with costs of suit and attorneys’ commission in an amount equal to ten (10%) percent of the principal amount outstanding under this note, but in no event less than five thousand dollars ($5,000.00); and for so doing this note or a copy hereof verified by affidavit shall be a sufficient warrant. The authority herein granted to appear, enter and confess judgment shall not be exhausted by any one or more exercise thereof or by any defective exercise thereof, but shall continue and be exercisable from time to time until the full payment of all amounts due from maker to payee hereunder and under the loan documents is made. The foregoing right and remedy is in addition to and not in lieu of any other right or remedy available to payee under this note or otherwise.
Maker acknowledges having had the assistance of legal counsel or the opportunity to retain legal counsel in the review and execution of this note for the purpose of explaining the meaning and effect of the foregoing provisions concerning confession of judgment....” (Exhibit a to the respondent’s complaint for confession of judgment, pp. 3-4).

The defendant contended in response to the complaint for confession of judgment that the plaintiff knew at the time of defendant’s purchase of the premises that the latter had intended to use it both as a residence and as a place of business, but that plaintiff had failed to inform him of a township requirement that a sewer hookup was necessary before any portion of the premises could be used commercially. (Petition to open judgment, ¶¶ 7, 10). The defendant additionally averred that the plaintiff had fraudulently misrepresented to him that the premises were being conveyed free of all liens and encumbrances subject only to the mortgage of the plaintiff and that the wiring of the premises was compliant with all local codes. (Id., ¶¶ 8-9, 11). The defendant asserted that, when he attempted, through Artisans Bank in June of 2008, to restructure his financial obligations including the borrowing of sufficient funds with which to pay off the balloon note, Artisans discovered and reported to the defendant that the premises were encumbered by several preexisting obligations of the plaintiff totaling over $350,000.00. (Id., ¶¶ 17-19, 26; Exhibit B - Title Insurance Report dated June 28, 2010). The defendant asserted that, although he had “immediately” notified the plaintiff ofthe bank’s discovery and that he would be unable to restructure his financial obligations through Artisans Bank unless the plaintiff “immediately” satisfied the existing encumbrances, the plaintiff’s refusal or inability to clear the encumbrances rendered defendant’s effort to obtain sufficient financing with which to pay off the balloon note futile. (Id., ¶¶ 20-25). The defendant claimed that the inability to refinance the obligation on the balloon note due to the plaintiff’s failure to convey clear title prevented him from making the payments thereupon during the calendar year, 2010, which lapse on the part of the defendant led to the filing of the complaint for confession of judgment by the plaintiff. (Id., ¶¶ 28-29).

The defenses raised in six counts pleaded by the defendant in his petition to open judgment are: (I) fraudulent inducement of the sale of the premises with misrepresentations that they were being conveyed free and clear of all liens and that the property was electrical code compliant; (II) fraud with regard to the same misrepresentations alleged in count I; (III) rescission of the sale contract for the premises on grounds of the plaintiff’s alleged misrepresentations that he was conveying clear title thereto and that it was electrical code compliant; (IV) breach of the sale contract for the premises on grounds of the plaintiff’s alleged misrepresentations that he was conveying clear title thereto and that it was electrical code compliant; (V) setoff of any damages awarded to the defendant from any judgment awarded by the court; (VI) denial or reduction of the 10% attorney fees allowed pursuant to the balloon note for confession of judgment against the defendant. (Id., ¶¶ 30-69). The defendant sought only the opening, and not the striking, of the within judgment, and the defenses of alleged fraudulent misrepresentations by plaintiff regarding electrical code compliance and sewer service requirements for commercial use of the premises were withdrawn at the hearing on the petition to open judgment. (1/31/11 N.T. 87-88). Since the defendant has admittedly never made any payments to reduce or eliminate the one encumbrance shown to remain on this property, he is not entitled to an award of a set-off. (N.T. 100-102). Further, because the defendant has never submitted evidence in support of a boilerplate claim that the attorney fees allowable for confession of judgment to which he had agreed in executing the balloon note were unreasonable, this contention must be deemed waived.

The plaintiff answered the petition to open judgment with averments that only one encumbrance of the three discovered during Artisan Bank’s title search of June 2008 remains on the premises, a $100,000.00 mortgage lien in favor of Mellon (now Citizens) Bank dated December 17, 1998 and recorded on February 24, 1999 in volume 1839, page 1640 in the office of the recorder of deeds of Delaware County, Pennsylvania that plaintiff expects to have removed in the near future. (Answer and new matter to petition to open judgment, ¶¶ 19, 26). According to the plaintiff, a $150,000.00 mortgage lien in favor of Mellon (now Citizens) Bank dated December 17, 1998 and recorded on March 22, 1999 in Volume 1850, Page 794 was removed on or about September 20, 2010. (Id. ¶23). The third lien, a $100,000.00 mortgage in favor of Freedom Valley Bank (before its merger with Wilmington Trust Company) dated September 22, 1986 and recorded on November 10, 1986 in Volume 398, Page 2171 was paid in full on or about December 17, 1998 but never marked satisfied and plaintiff contended that his efforts to have that lien removed are continuing through the present time. (Id., 26).

The plaintiff countered the defendant’s defenses to the complaint for confession of judgment with contentions that the respondent had waived his rights to perform a title search and to inspect the premises pursuant to paragraphs 14 and 21 of the Agreement of Sale for the premises, and that an integration clause set forth in Paragraph 22 thereof barred all other evidence pertaining to the intentions of the parties from the time of its execution. (Id., new matter, ¶¶ 73-78, 82). The plaintiff averred that the defendant’s allegations of fraud were time barred for not having been sued upon within two years of the discovery of the existence of liens on the premises noted in Artisans Bank’s title search report in June of 2008. (Id., ¶91). The plaintiff also asserted that rescission of a contract for the sale of real estate based upon a breach of warranty of clear title is unavailable where the liens can be removed by the purchaser himself or by the seller upon the demand of the purchaser. (Id., ¶¶84-85).

The “agreement for sale of commercial real estate” appended as “Exhibit A” to the plaintiff’s answer and new matter to the petition to open judgment, and presented as Exhibit P-1 by the defendant at the hearing, sets forth several provisions that are germane to the issues raised in this appeal. Paragraph 3 (c) thereof states that the respondent/ seller of the premises is conveying the property “by fee simple deed of special warranty.” (Id., p. 1). Paragraph 14(a) of the agreement sets forth the respondent/Seller’s promise to convey the premises “free and clear of all liens [and] encumbrances,” and that “title to the subject property shall be good and marketable and such as will be insurable by a reputable title insurance company at the regular rates. Buyer shall pay all title charges and fees as are customary including any cancellation charges, recording fees or endorsement fees.” (Id., p. 4). Two additional provisions of paragraph 14 of the agreement that govern the subject of “Title” to the premises are recapitulated in their entirety below:

“(b) In the event Seller is unable to give good and marketable title and such as will be insurable by a reputable title insurance company at the regular rates, as specified in paragraph 14 (a), Buyer will have the option of taking such title as Seller can give without changing the price, or of being repaid all monies paid by Buyer to Seller on account of purchase price, and Seller will reimburse Buyer for any costs incurred by Buyer for those items specified in item 14 (c) [i.e. surveys required for determining an adequate legal description of the property] and in the later event there will be no further liability or obligation on either of the parties and this agreement will become VOID.
(d) Buyer will supply Seller with a title commitment from a reputable title insurance company within ten (10) days of the effective date of this agreement and advise seller of what title objections are requested to be removed. Seller shall then review the title objections and promptly advise buyer of any title objections that cannot be removed or that they are within the agreed condition of the title specified in paragraph (a). Buyer shall have ten (10) days from the date of Seller’s notice of objections that cannot be removed to elect in writing to terminate this agreement. All title objects not to be removed by seller shall remain at time of closing and shall be the ‘permitted title objections’. This provision shall not modify Seller’s obligation to deliver title at time of settlement free of all monetary liens.” (Id., p. 5)

Paragraph 21 of the Agreement of Sale governing “Representations” states that “it is understood that buyer has inspected the property, or hereby waives the right to do so, and that “[i]t is further understood that this agreement contains the whole agreement between the seller and the buyer and there are no other terms, obligations, covenants, representations, statements, or conditions, oral or otherwise, of any kind whatsoever concerning this sale.” (Id., p. 6). Paragraph 22 of the sale Agreement continues in that light, providing that: “[t]his Agreement sets forth the entire agreement of the parties and no oral modification of or addition to this agreement exists; furthermore, no amendment of this agreement can be made except by writing signed by both buyer and seller....” (Id.). A “Legal Notices” provision appended to the agreement of Sale and initialed by the defendant sets forth the proviso that “buyer and seller acknowledge that agent has advised them to consult and obtain experts concerning the legal and tax effects of this agreement and completion of the sale, as well as the condition and/or legality of the property, including but not limited to, the property’s improvements, equipment, soil, tenancies, title and environmental aspects. (Id., p. 8, ¶ 3).

The defendant gave sworn hearing testimony that, as of December 17, 2007, Artisans Bank professed interest in extending him a loan in the amount of $3.8 million using his parcels of real property, including the premises, as collateral, and that a loan in that amount was approved on July 9, 2008. (N.T. 52-58; Hearing Exhibits P-9, Exhibit A thereto, and P-12). A condition of the loan which would have allowed for the defendant to clear the extant balance remaining on the mortgage for the premises was that the properties collateralizing the loan be capable of being conveyed to Artisans with clear title. (N.T. 58-59). The defendant stated that it was “not long after” he received notice of the approval of the loan on July 9, 2008, that he became aware of an “issue regarding recorded liens” on the premises by way of a July 28, 2008 “commitment for title Insurance Form” report on Artisans title search of the properties intended to collateralize the loan. (N.T. 59-60; hearing exhibit P-14). It was on pages six and seven of that document that four encumbrances, including the extant balloon note, were listed as clouding the title to the premises. (N.T. 59-62). The defendant related that, after he became aware of the remnant liens on the premises, he called the plaintiff’s attorney, who had handled the settlement, and then contacted the plaintiff directly. (N.T. 63-64). The defendant testified that he had bought and sold a number of parcels of real property through the years and had constantly (i.e., “nine out of ten times”) run into the problem of remnant encumbrances, or liens not yet marked as satisfied, existing on properties he was buying or selling. (N.T. 65-66).

The defendant presented as hearing exhibit P-17 a copy of an e-mail sent to him by his attorney on September 4, 2008 informing him that the attorney was suggesting to the banks involved in the defendant’s financial restructuring effort that a $900,000.00 escrow account be established for covering the outstanding balance on the balloon note and that defendant should plant a bug in the plaintiff’s ear to urge him to get the outstanding liens on the premises quickly satisfied to prevent the need for it. (N.T. 68-70; Hearing Exhibit P-17). The defendant replied that he had faxed the plaintiff just such encouragement on September 8,2008 in which he informed the plaintiff: “you still have a problem with liens on the property and my atty. wants to escrow $900,000 until the problem is fixed”, but had never raised the matter with him afterward in written correspondence. (N.T. 95-98; Hearing Exhibit P-18). The defendant presented as hearing exhibit P-19 a copy of a faxed transmission from Artisans Bank dated October 10, 2008 approving a loan in the amount of $2,850,000.00 instead of the originally approved amount of $3.8 million which had included the funding necessary to pay off the subject balloon note. (N.T. 75-78, 81-82; Hearing Exhibits P-21 through P-23). The defendant asserted that this was the first time he had become aware that there was a “bona fide” lien, as opposed to a “remnant lien” on the premises. (N.T. 78). When asked why he had not asked the plaintiff previously why he had informed the defendant that there were no actual liens on the premises, the defendant replied that “during the tenure of my ownership unfortunately everything he told me was untrue...it was pointless to ask him for another lie.” (N.T. 80).

The defendant testified that the parties then attempted to lengthen the period of repayment of the mortgage note until 2013 by means of an addendum to the original balloon note because artisans bank had refused to lend him the money with which to do so immediately because of the liens encumbering the property, an allegation that bore absolutely no mention in the addendum to the balloon note according to defendant’s hearing testimony. (N.T. 80-81, 92-94; hearing exhibits P-2c and P-20). The defendant related that he did not attempt to pay off the encumbrancing liens, but continued to make payments on the balloon note and to reside in the premises until April of 2010, at which point, he simply “gave it back” to the plaintiff. (N.T. 83, 100-102).

On cross-examination, the defendant stated that he had not ordered a title insurance policy, despite the opportunity to do so being suggested in Paragraph 14 of the agreement of sale. (N.T. 88-89). When asked why he had not done so, the defendant’s attorney replied that it was because of the plaintiff’s representations that he was conveying clear title. (N.T. 110). There then ensued a series of remarks among counsel for the parties and the court wherein defendant’s attorney acknowledged that it was “stupidity” for his client not to obtain title insurance when purchasing the premises, but that he had presented a factual issue for a jury to decide as to when the defendant should reasonably have known of “a bona fide problem” with the premises’ title in order for his fraud claim to have been timely filed, and that any inferences supporting timeliness must, perforce, be resolved in favor of the defendant. (N.T. 110-118).

The defendant offered the suggestion in redirect testimony that he had not obtained title insurance at the time of purchasing the premises in order to save the costs of hiring an attorney to handle the settlement and because he relied upon the plaintiff’s assurances that he was passing clear title. (N.T. 122-124). The plaintiff presented his own testimony that, of the two other encumbrances on passing clear title to the premises, only the Mellon (now Citizens) Bank loan for $100,000.00 remains unpaid. (N.T. 132-133; Hearing Exhibit R-l, Satisfaction Piece dated September 10, 2010 for $150,000.00 mortgage from Mellon (now Citizens) Bank).

Following the parties’ submissions of post-hearing memoranda of law, the court issued the order denying the instant petition to open judgment.

The defendant timely appealed from that order and has filed a concise statement of errors and rulings complained of on appeal that is set forth in its entirety below:

“ 1. The trial court erred in failing to view the evidence in the light most favorable to the [defendant] and accepting as true all evidence and inferences following therefrom;
2. The trial court erred in failing to resolve any doubt as to the adequacy of [defendant’s] defense to a confession of judgment in favor of opening the disputed judgment;
3. The trial court erred in finding that [defendant] failed to produce evidence which, in a jury trial, would require the issues to be submitted to a jury;
4. The trial court erred in finding that [defendant] failed to produce evidence which, in a jury trial, would require submittal to a jury regarding [defendant’s] allegations against the plaintiff regarding fraud;
5. The trial court erred in finding that [defendant] failed to produce evidence which, in a jury trial, would require submittal to a jury regarding [defendant’s] allegations against the plaintiff regarding fraudulent inducement;
6. The trial court erred in finding that defendant failed to produce evidence which, in a jury trial, would require submittal to a jury regarding [defendant’s] allegations that the plaintiff misrepresented, or made material omissions regarding the existence of encumbrances on the subject property;
7. The trial court erred in finding that [defendant] failed to produce evidence which, in a jury trial, would require submittal to a jury regarding the [defendant’s] rescission of contract claims;
8. The trial court erred in finding that [defendant] failed to produce evidence which, in a jury trial, would require submittal to ajury regarding [defendant’s] breach of contract claims against the plaintiff concerning the agreement of sale for the subject property;
9. The trial court erred in finding that [defendant’s] claims were time barred;
10. The trial court failed to properly apply the discovery rule in light of the facts and evidence produced by [defendant];
11. The trial court erred in failing to apply the fraudulent concealment doctrine in light of the facts and evidence produced by [defendant];
12. The trial court erred in failing to allow a jury to determine whether the elements of the discovery rule and/or the fraudulent concealment doctrine were met; [and]
13. The trial court erred in failing to reduce or modify that portion of the confession by judgment constituting attorney fees and costs. (Defendant’s statement of errors and rulings complained of on appeal, pp. 2-3).

The issue of attorney fees, as previously noted, having been waived (defendant’s statement of errors and rulings complained of on appeal, paragraph 13), the remaining appellate issues raised by defendant may be fairly summarized as follows: whether the defendant’s defenses grounded in allegations of fraud on the part of the plaintiff with regard to the conveyance of clear title to the premises are time-barred (statement of errors and rulings complained of on appeal, paragraphs 1-12).

The Defendant’s Fraud-Based Defenses to Plaintiff’s Confession of Judgment Are Time-Barred

The defendant’s fraud-based defenses, including allegedly fraudulent misrepresentations and inducements to enter the subject real estate sale agreement being the asserted grounds for his contention of breach of contract and prayer for rescission as a form of relief therefrom as set forth in Paragraphs 1 through 12 of his statement of errors and rulings complained on appeal, are time-barred. It is clear from the evidence, including the defendant’s own hearing testimony, that his discovery of lien encumbrances affecting his ability to secure a mortgage debt using the premises as collateral took place more than two years before the fraud-based defenses to this action were pleaded on October 1, 2010.

The defendant testified that he is a businessman with a significant level of experience in the buying and selling of real property, and that in nine out of ten of his transactions of that nature, he had encountered the problem of remnant, or unsatisfied, liens on the parcels involved. The plaintiff has both consistently pleaded and offered credible testimony that he had forgotten about the three additional encumbrances besides the mortgage on the premises which, at the time of the sale of the premises, were from ten to twenty years old. Moreover, two of these were true “remnant” liens for loan obligations that had been fully remunerated to the lenders but not yet marked as satisfied. A third such lien consisting of a $100,000.00 mortgage on the premises held by Mellon (now Citizens) Bank is still outstanding with assurances from the plaintiff that he is working to retire that obligation in order for it to be marked satisfied as well. Defendant’s claim that the plaintiff had lied to him from the time of the parties’ entry into the agreement of sale about his ability to pass clear title to the premises is simply not credible because it is inconceivable that the plaintiff would do so while the defendant was attempting to secure a mortgage from Artisans Bank that would have permitted him to pay off the balloon note and to retire that obligation to the plaintiff as well.

Moreover, the three smaller encumbrances, only one of which was not a remnant lien and was valued at less than ten percent of the balance due on the balloon note, did not eradicate the defendant’s ownership or ability to convey title to the premises under the circumstances sub judice, but affected only his ability to use it as collateral for a $3.8 million loan with which he intended to pay off his financial obligations including the balloon note. If the defendant had wished to sell this property or to obtain clear title to it, all he had to do was pay the balance on the mortgage lien or demand that the plaintiff do so and the issue presented here would have been resolved. The fact that the plaintiff was unable to pay off the lien at the relevant time did not prevent the defendant from doing so and claiming the sum from the plaintiff in another cause of action or otherwise.

Furthermore, paragraph 14 of the sale agreement allowed the defendant the opportunity for challenging the clarity of title being conveyed following a title search, as well as the right to rescind the sale agreement if his objections thereto could not be resolved. Instead of doing the title search and acquiring title insurance, the defendant waived the right to raise this challenge and went on to remit payments on the balloon note until approximately April of 2010. Therefore, defendant tacitly accepted the title to the premises that could be conveyed with the only remaining remedy of paying off the lien encumbrances himself and seeking reimbursement from the plaintiff, or making a demand on the plaintiff to remove the encumbrances himself.

The statute of limitations for bringing a claim sounding in deceit or fraud is two years. 42 Pa.C.S. §5524 (“The following actions and proceedings must be commenced within two years:...(7).. .any other action or proceeding.... sounding in trespass, including deceit or fraud....”). (Id.). The defendant testified that he had received an e-mail from his attorney on September 4, 2008, admitted into evidence as Hearing Exhibit P-17, advising that it might be necessary to escrow the significant sum of $900,000.00 in order to acquire the $3.8 million loan the defendant had been seeking from Artisans Bank, and that it was imperative for the defendant to encourage the plaintiff to eliminate the liens in order for the defendant to receive the full $3.8 million amount of the loan. The defendant admitted that he had so encouraged the plaintiff via a fax transmission of September 8, 2010. (Hearing Exhibit P-18). More crucial, however, is the defendant’s testimony that he became aware of the existence of the encumbrances not long after the issuance of Artisans Bank’s title search report from July 28, 2008, but the defendant has never shown exactly when he was informed of the existence of that report. Despite his testimonial vagueness, it is clear that the defendant knew that there were questions raised about his ability to include the premises for collateral on a loan he intended to use to pay off his existing financial obligations. Any threat of that nature signaled by Artisans’ reluctance to loan him the full amount he was seeking provided the defendant with sufficient knowledge and notice of grounds for suing the plaintiff for fraud instead of waiting to raise it as a defense to the judgment confessed against him after an additional two years of making the required payments on the balloon note. It is interesting as well that the defendant then decided sua sponte to give the premises back to the plaintiff long after receiving notice back in July of2008 that Artisans Bank was backing away from its original commitment to lend him the money to pay that note off completely, and after entering into a Balloon Note Addendum in November of2008 that would have allowed the defendant to extend payments thereupon through the year 2013. (Hearing Exhibit P-12). For the foregoing reasons, the defendant’s assertion that he needed to be certain that the subject encumbrances were “bona fide” as opposed to “remnant” before he was able to file allegations of fraud against the plaintiff is wholly without merit.

In addition, it strains credulity for the defendant to expect the court to believe that an admitted and experienced buyer and seller of numerous parcels of real estate would willingly forego a title search and the purchase of title insurance in order to unearth and remedy the encumbrances which resulted in a reduced loan to him from Artisans’ Bank. Had the defendant availed himself of those options at the time of sale, he could have avoided the trouble encountered in negotiating the loan for $3.8 million instead of having to settle for significantly less.

“As a matter of general rule, a party asserting a cause of action is under a duty to use all reasonable diligence to be properly informed of the facts and circumstances upon which a potential right of recovery is based and to institute suit within the prescribed statutory period (citations omitted). Thus, the statute of limitations begins to run as soon as the right to institute and maintain a suit arises; lack of knowledge, mistake or misunderstanding do not toll the running of the statute of limitations (citations omitted); even though a person may not discover his injury until it is too late to take advantage of the appropriate remedy, this is incident to a law arbitrarily making legal remedies contingent on mere lapse of time. Once the prescribed statutory period has expired, the party is barred from bringing suit unless it is established that an exception to the general rule applies which acts to toll the running of the statute.
“The ‘discovery rule’ is such an exception, and arises from the inability of the injured, despite the exercise of the due diligence, to know of the injury or its cause. Pocono International Raceway, Inc. v. Pocono Produce, Inc. 503 Pa. 80, 84, 468 A.2d 471 (1983)(emphasis in original).

The failure of the defendant, a sophisticated buyer and seller of real property, to timely pursue a legal remedy against the plaintiff defies all logic. His own testimony and documentation admitted into evidence clearly established that this is not a “discovery rule” case because defendant knew of the existence of prior liens before September 4, 2008 (Hearing Exhibit P-17), yet he delayed for more than two years before asserting any claims and defenses with respect to these liens when he filed on October 1, 2010 his petition to open the judgment confessed against him. Here, the defendant, having the ability to ascertain the cause of action and to institute the suit within the applicable period of limitations, and having failed to do so, the statute bars his claim.

Conclusion

In order to prevail on his petition to open judgment, the defendant was required to respond promptly to the judgment confessed against him, about which no issue has been raised here below, to allege a meritorious defense, and to present sufficient evidence that would allow its submission to a jury. Lambakis v. Exar, 340 Pa. Super. 483, 490 A.2d 882 (1985). The evidence produced must be clear, direct, precise and credible. Germantown Savings Bank v. Talacki, 441 Pa. Super. 513, 657 A.2d 1285 (1995). It has been shown that the defendant failed to meet his burden of raising a defense that was not time-barred, although none of the defendant’s defenses can be said to be meritorious from the evidence presented. Moreover, the defendant presented no evidence whatsoever to establish that the plaintiff’s claim for the attorney fees and costs permitted by the confession of judgment clause approved by the defendant were unreasonable.

For all of the foregoing reasons, the defendant has failed to meet his burden of proving a timely, credible and meritorious defense to the judgment confessed against him that could be deemed presentable to a jury, and this determination must not be disturbed on appeal.

      . The plaintiff’s complaint for confession of judgment was filed, and damages in the amount of $1,177,751.05 were assessed against the defendant on September 2, 2010. The petition to open the judgment was filed with the court on October 1, 2010. The hearing on the petition to open judgment took place on January 31, 2011 and the order now appealed from was issued on February 16, 2011. Plaintiff has expressed no objection to the timeliness of defendant’s prayer for relief. It is here noted that the within petition was assigned for disposition by this court as a miscellaneous matter.

      . The terms of the balloon note executed by the parties on January 3, 2007, required the Defendant to make 360 monthly payments of $8,648.93 over a thirty-year amortization period, as well as two payments in the amount of $100,000.00 on May 1, 2007 and September 1, 2007. The Defendant made the latter two payments and ceased meeting his monthly loan payment obligations to the Plaintiff in the calendar year 2010. (Petition to Open Judgment, ¶¶ 4-5,28; a copy of the Balloon Note is appended as “Exhibit A” thereto).


source: Caselaw Access Project

author: BERNSTEIN, J.,

license: Public Domain

text:
    Morello v. Anastasio

      Aaron C. Finestone, for plaintiff.

      Vernon Anastasio, for defendant.
    April 6, 2011
   BERNSTEIN, J.,

This is an action for wrongful use of civil process and fraudulent misrepresentation brought by pro se plaintiff Celeste A. Morello (hereinafter “Morello”) against defendants Anthony Anastasio, Anthony’s Italian Coffeehouse, Inc., Thomas & Ann Anastasio and Vernon T. Anastasio, Esquire (hereinafter “Vernon Anastasio”). This action arises from a lawsuit filed by Vernon Anastasio, Esquire on behalf of his brother Anthony Anastasio on August 13, 2008 against Morello (hereinafter “Anastasio complaint”) for defamation and intentional infliction of emotional distress. The complaint alleged that Morello, a historian, criminologist and author, produced and published written materials that were defamatory and damaging about Anthony Anastasio, his business and his character within the community. Anthony Anastasio is the owner and sole shareholder of Anthony’s Italian Coffee House Inc. located in the Italian Market District of Philadelphia on South Ninth Street. Morello filed preliminary objections to the Anastasio complaint for failure to follow rules of court and for legal and factual insufficiency. In response to the preliminary objections, Anastasio filed an amended complaint.

Morello once again filed preliminary objections. On January 23, 2009, the court dismissed the preliminary objections for failing to follow the local rules of court. Morello filed a motion for reconsideration which was subsequently denied.

On March 16, 1999, Morello filed an answer with new matter and counterclaim. The counterclaim alleged intentional defamation, negligent defamation and false light- invasion of privacy. On April 21, 1999, Morello filed a motion for judgment on the pleadings. Anastasio did not file an answer to the motion and on June 3, 2009, the court granted Morello’s motion for judgment on the pleadings and dismissed the amended complaint. Additionally, on May 1, 2009, Morello filed a motion for default judgment on the counterclaim based on Anastasio’s failure to answer the counterclaim. Anastasio filed a motion to open judgment. On June 2, 2009, Morello’s motion for default judgment was denied without prejudice. On July 8, 2009, Anastasio’s petition to open judgment was denied.

On July 13, 2009, Morello filed the instant action against Anthony T. Anastasio, Anthony’s Italian Coffeehouse, Inc., Vernon T. Anastasio, Esquire, Thomas Anastasio and Ann Anastasio for wrongful use of process and fraudulent misrepresentation as a result the Anastasio lawsuit. Thomas Anastasio and Ann Anastasio are Vernon T. Anastasio and Anthony T. Anastasio’s parents. Vernon Anastasio, entered his appearance and filed an answer to the complaint for himself as well as the business entity and the other Anastasio defendants. On March 4, 2010, the court granted in part a motion for judgment on the pleadings and dismissed as defendants Thomas and Ann Anastasio. All other aspects of the motion were denied. On August 31, 2010, Morello’s motion for summary judgment was denied.

On December 16, 2010, the matter was tried as a non jury matter and each party presented witnesses and evidence. During the trial, Anthony Anastasio testified that he informed his counsel, Vernon Anastasio, that he wanted to discontinue the Anastasio action. Vernon Anastasio never discontinued the action.

DISCUSSION

The common law cause of action for wrongful use of civil proceedings has been codified at 42 Pa. C. S. A. section 8352 et. seq. The statute is referred to as the “Dragonetti Act.” The tort of wrongful use of civil proceedings is interpreted and applied broadly against those who use legal process as a “tactical weapon to coerce a desired result that is not the legitimate object of the process.”

In order to state a claim for malicious use of process, a plaintiff must prove that defendant initiated or continued civil proceedings against the plaintiff:

(a) without probable cause or in a grossly negligent manner;
(b) for an improper purpose; and
(c) that those proceedings were terminated in favor of the plaintiff.

Under the Dragonetti Act, “probable cause” is defined as follows:

A person who takes part in the procurement, initiation or continuation of civil proceedings against another has probable cause for doing so if he reasonably believes in the existence of the facts upon which the claim is based, and either:
(1) Reasonably believes that under those facts the claim may be valid under the existing or developing law;
(2) Believes as an attorney of record, in good faith, that his procurement, initiation or continuation of a civil cause is not intended to merely harass or maliciously injure the opposite party.

Pennsylvania courts have defined gross negligence to mean the “want of scant care” or “lack of slight diligence or care, or a conscious, voluntary act or omission in reckless disregard of a legal duty and of the consequences to another party”, who may typically recover exemplary damages.

At the time the Anastasio action was initiated, Anthony and Vernon Anastasio possessed a reasonable belief that the claim for defamation was valid. Therefore probable cause existed to bring the action. Sometime in 2008 after the Anastasio complaint was filed, Anthony Anastasio informed his counsel Vernon Anastasio that he longer wanted to continue with the action. Based on Anthony Anastasio’s testimony, the court finds that he and his business, Anthony’s Italian Coffeehouse, Inc., are not liable for wrongful use of civil process for continuing the Anastasio action since he informed his counsel that he wanted to discontinue the action. As such, as it pertains to Anthony Anastasio and his business Anthony’s Italian Coffeehouse, Inc., the court finds in favor of Anthony Anastasio and his business Anthony’s Italian Coffeehouse, Inc. and against Celeste Morello on the claim for wrongful use of civil process.

The same does not hold true for Vernon Anastasio. Vernon Anastasio continued the Anastasio action against Morello even after his client instructed him to discontinue the action. In a letter dated April 28, 2009, instead of informing the court of his client’s discontinuance Vernon Anastasio maintained the facade that his client was continuing to prosecute the action. In the letter, Vernon Anastasio stated as follows:

This letter is to confirm that I represent Anthony Anastasio in the above matter. The settlement conference on this matter is scheduled on June 11, 2009 at 9:00 a.m.
I would like to point out that I believe the defendant is either (sic) the judicial process. A careful review of the defendant’s Answer and Discovery requests should illustrate my point. Further, defendant is now counter suing the plaintiff but points to no specific instance or published material upon which to base her claim. Finally, defendant is acting Pro Se and it is extraordinarily difficult for opposing counsel to engage a Pro Se defendant in the customs and practice of law.
Accordingly, I would also like to inform you that I am willing to withdraw the plaintiff’s case against Ms. Morello if she is willing to do the same thing. I respectfully request that the court intervene in this process so that we can reach the best possible solution for both parties.

In that letter, Vernon Anastasio represented that he was prepared to withdraw the Anastasio action if Morello did the same with the counterclaim. There was no proper action to withdraw since the client Anthony Anastasio had already directed that the action be discontinued. No testimony was presented by either Anthony Anastasio or Vernon Anastasio, both of whom testified, that Vernon advised his brother that their affirmative action should continue until the counterclaim could be dismissed. Vernon Anastasio’s continued prosecution in contravention of his client’s clear instruction to discontinue constitutes a failure of probable cause to continue the action and improper purpose for which liability exists under the Dragonetti Act.

Having found that Vernon Anastasio is liable under the Dragonetti Act, Morello would be entitled to recover damages under 42 Pa. C. S. § 8353. However, Morello failed to prove any damages. Title 42 Pa. C. S. § 8353 provides as follows:

When the essential elements of an action brought pursuant to this subchapter have been established as provided in section 8351 (relating to wrongful use of civil proceedings), the plaintiff is entitled to recover for the following:
(1) The harm normally resulting from any arrest or imprisonment, or any dispossession or interference with the advantageous use of his land, chattels or other things, suffered by him during the course of the proceedings.
(2) The harm to his reputation by any defamatory matter alleged as the basis of the proceedings.
(3) The expense, including any reasonable attorney fees, that he has reasonably incurred in defending himself against the proceedings.
(4) Any specific pecuniary loss that has resulted from the proceedings.
(5) Any emotional distress that is caused by the proceedings.
(6) Punitive damages according to law in appropriate cases.

There was no evidence presented that her reputation was detrimentally harmed. No evidence was presented that Morello’s reputation was in any way decreased after the Anastasio action was instituted than before the Anastasio action was instituted. On the contrary, the testimony established that Morello’s reputation remained unchanged. There was no evidence of any specific pecuniary harm and emotional distress.

In a claim for Wrongful Use of Civil Proceedings, a plaintiff is also entitled to collect attorneys’ fees, “that plaintiff has reasonably incurred in defending himself against the underlying action.” A plaintiff may not, however, receive attorneys’ fees if the party appeared pro se in the underlying litigation. Morello represented herself in the underlying action and therefore no attorney fees are recoverable. The wrongful use of civil process statute also permits the recovery of punitive damages. Any punitive damages award must comport with the requirements of due process. In particular, such punitive damages must bear a reasonable relationship, and must be proportionate, to the compensatory damages awarded. Since no compensatory damages were proven, no punitive damages may be awarded. The court finds in favor of Morello and against Vernon Anastasio on the claim for wrongful use of civil process, however since no evidence of damages was presented no damages are awarded.

Morello also alleges a claim for fraudulent misrepresentation the basis of which is the alleged factual averments contained within the Anastasio complaint. In order to state a claim for fraudulent misrepresentation, a plaintiff must prove: (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 (scienter); (4) with the intent of misleading another into relying on it; (5) justifiable reliance on the misrepresentation; and (6) the resulting injury was proximatelycausedbythereliance. Winning an uncontested motion for judgment on the pleadings in the underlying action does not prove fraudulent misrepresentation. It only demonstrates a failure to produce evidence necessary to prove their allegations. Scienter, or the maker’s knowledge of the untrue character of his representations, is a key element in finding fraudulent misrepresentation. There has been no proof of any essential elements for fraudulent misrepresentation including the Anastasio’s guilty knowledge or knowledge that material facts have been falsely represented or omitted with intent to deceive. On the claim for fraudulent misrepresentation, the court finds in favor of Anthony Anastasio, Anthony’s Italian Coffeehouse, Inc. and Vernon Anastasio.

Finding

The court finds as follows on the claim for wrongful use of civil process:

1. In favor of defendants Anthony Anastasio and Anthony’s Italian Coffeehouse, Inc.
2. In favor of Celeste Morello and against Vernon Anastasio, Esquire on the claim for Wrongful Use of Civil Process. No damages are awarded.

On the claim for fraudulent misrepresentation, the court finds in favor of Anthony Anastasio, Anthony’s Italian Coffeehouse, Inc. and Vernon Anastasio, Esquire.

        . McGee v. Feege, 517 Pa. 247, 535 A.2d 1020, 1026 (1987).

      . 42 Pa. C. S. A. § 8351 (a) (1) and (2); Rosen v. Tesoro Petroleum Corp. 399 Pa. Super. 226, 582 A.2d 27 (1990).

      . 42 Pa. C. S. A. § 8352.

      . Hart v. O’Malley, 781 A.2d 1211, 1218 (Pa. Super. 2001).

      . Trial Exhibits Exhibit D-6- Philadelphia Public Record Article dated 9-18-08; plaintiff’s Exhibit “9”; plaintiff’s Exhibit “10”.

      . Exhibit D-16.

      . The evidence regarding sale of the cook book authored by Morello “Philadelphia Italian Market Cookbook” and removal from Cannuli’s store shelves introduced by Morello fails bear any relationship to the Anastasio action.

      . No evidence was introduced demonstrating any medical treatment received by Morello for any emotional harm suffered because of the Anastasio action.

      . 42 Pa.C.S. §8353(3).

      . See Westmoreland County Indus. Dev. Auth. v. Allegheny County Bd. of Prop. Assessment, Appeals & Review. 723 A.2d 1084, 1086-1087 (Pa. Commw. 1999) (“an award of counsel fees is intended to reimburse an innocent litigant for expenses made necessary by the conduct of his opponent. During the relevant period of this litigation, [plaintiff] proceeded pro se. We conclude that the statute does not provide authority for an award of a pro se equivalent of counsel fees to a pro se litigant.”)

      . State Farm Mut. Auto. Ins. Co. v. Campbell, 538 U.S. 408, 426, 123 S.Ct. 1513, 1524, 155 L.Ed. 2d 585 (“courts must ensure that the measure of punishment is both reasonable and proportionate to the amount of harm to the plaintiff and to the general damages recovered.”)

      . Ira G. Steffy & Son, Inc. v. Citizens Bank of Pa., 7 A.3d 278 (Pa. Super. 2010).


author: WALLACH MILLER, J,

text:
    Maione v. Greenway Center, Inc.

      Joseph Hanyon and John Vivian, for plaintiff.

      John R. Hill, for defendant.

      Maureen E. Kelly, for intervenor.
    March 3, 2011
   WALLACH MILLER, J,

On June 16, 1997, Winco Acquisitions, Inc., d/b/a Greenway Center filed a petition under Chapter 11 in the United States Bankruptcy court for the Middle District of Pennsylvania. On June 23, 1997, Mark Willet was admitted to the Greenway Center Treatment Facility in Henryville, Pennsylvania. Mr. Willet was found dead the next day at the facility.

Plaintiff, Annette Maione, individually and as administrator of the estate of Mark Willet, (“plaintiff’) commenced this action by filing a praecipe for writ of summons on June 23, 1999. On July 7, 1999, the summons was duly served on the person in charge of the Greenway Center in Henryville, Monroe County, Pennsylvania. On November 13, 2000, plaintiff filed a complaint seeking damages resulting from the death.

On June 3, 2002, plaintiff filed a motion to correct name of defendant pursuant to Pa. R.C.P. 1033. Plaintiff requested that defendant’s name be changed to either “Winco Acquisitions, Inc., d/b/a Greenway Center” or “Greenway Center, Inc. as successor in interest to Winco Acquisition, Inc.” On September 17, 2002, the Honorable Peter J. O’Brien, of this court, held a hearing on the motion; by opinion and order dated October 9,2002, Judge O’Brien granted plaintiff’s motion. The court ordered the caption to reflect the name of the defendant as “Greenway Center Inc., as successor in interest to Winco Acquisition Inc.” In his opinion, Judge O’Brien held that the case caption should reflect defendant’s name as “Greenway Center, Inc. as successor in interest to Winco Acquisition, Inc.,” because: 1) Greenway Center, Inc. was created at the same time that Winco Acquisition, Inc. submitted its Reorganization Plan; 2) the party served with the summons on July 7,1999 was an appropriate representative of either or both corporations and was also the person in charge of Greenway Center, Inc. at the facility in Henryville, Pennsylvania; and 3) Greenway Center, Inc. was set up to assume the stock from Winco Acquisition, Inc. when the bankruptcy was closed and to act as its successor in operating the facility in Henryville.

On December 19, 2003, Greenway Center, Inc. filed a declaratory judgment action in this court, No. 10177 CV 2003, to determine if Essex Insurance Company (“Essex”) had a duty to indemnify and defend plaintiff’s action. On grounds of diversity, the declaratory judgment action was removed to the district court for the middle district of Pennsylvania on May 26, 2004. After shuttling between the district court and the United States Court of Appeals for the Third Circuit, the district court determined that Greenway Center, Inc. was not a successor in interest to Winco Acquisitions, Inc. and that Essex has no duty to defend and indemnify Greenway Center, Inc. in this action. On October 12, 2010, plaintiff filed the instant motion to correct name of defendant pursuant to Pa. R.C.P. 1033. plaintiff claims that since the district court and the court of appeals for the third circuit have found that Greenway Center, Inc. is not a “successor in interest” to Winco Acquisition, Inc., the caption in this case may be an inaccurate description of defendant’s identity. Plaintiff claims that the correct party was identified but incorrectly designated in the case caption. Since no new party is being identified, plaintiff argues that the amendment should be allowed. In opposition, intervenor, Winco Acquisition Inc. argues that the amendment should not be granted under the law of the case doctrine, defined as follows:

The law of the case doctrine refers to a family of rules which embody the concept that a court involved in the later phases of a litigated matter should not reopen questions decided by another judge of that same court or by a higher court in the earlier phases of the matter.... The various rules which make up the law of the case doctrine serve not only to promote the goal of judicial economy...but also operate (1) to protect the settled expectations of the parties; (2) to insure uniformity of decisions; (3) to maintain consistency during the course of a single case; (4) to effectuate the proper and streamlined administration of justice; and (5) to bring litigation to an end.

Com. v. McCandless, 880 A.2d 1262, 1267 (Pa. Super. 2005), citing Com. v. Starr, 541 Pa. 564, 574, 664 A.2d 1326, 1331 (1995) (citations omitted). While the law of the case doctrine only applies to decisions by a trial court or appellate court, the related “coordinate jurisdiction” rule, “prevent[s] one trial judge from revising the rulings of another trial judge on the same question.” Gateway Towers Condominium Assn. v. Krohn, 845 A.2d 855, 861 (Pa. Super. 2004), citing Leoni v. Whitpain Twp., 709 A.2d 999, 1001 (Pa. Cmwlth. 1998).

Judge O’Brien, after hearing, held that Greenway Center Inc. was a successor in interest to Winco Acquisition, Inc., based on the reasoning set forth above. Accordingly, under the law of the case doctrine and the “coordinate jurisdiction” rule, we decline to revise the prior ruling of another judge of this court. We, therefore, deny plaintiff’s motion.

ORDER

And now, this March 3, 2011, after oral argument and a review of the briefs submitted by the parties, plaintiff’s motion is denied.


text:
    John S. McManus, Inc. v. Upper Chichester Twp.

      Jason C. Tomasulo, for plaintiff.

      Howard J. Gallagher III, for defendant.
    April 19, 2011
   BURR, S.J.,

The defendant, Upper Chichester Township, has appealed from this court’s order disposing of the issues raised in the above-captioned action brought by the plaintiff, John S. McManus, Inc., under the Political Subdivision (“local”) Tax Collection Law, 72 P.S. 5566 et sequitur, alleging that the defendant township had overcharged for a building permit necessary for the plaintiff’s construction of an Upper Chichester Township elementaiy school building and its renovation of the school district’s administrative office complex. Pursuant to the parties’ agreement that this case should be resolved on the plaintiff’s motion for summary judgment and the defendant’s answer thereto, the court granted judgment for the plaintiff in the amount of $91,356.00 plus interest and costs on count I of its complaint in assumpsit, and dismissed count II thereof alleging Unjust Enrichment as moot.

A complete recapitulation of the facts and circumstances of record that gave rise to this law suit is unnecessary, inasmuch as the sole issue raised in the defendant’s appeal is that the court should not have awarded interest and costs to the plaintiff. However, an objection to the plaintiff’s entitlement to interest and costs was never pleaded, nor argued, by the defendant before the judgment order was entered. Moreover, the defendant’s basis for raising it now has changed from a contention in its motion to vacate/reconsider the appealed from order that the plaintiff lacked entitlement to interest and costs on the court’s award because a building permit fee is not a “tax”, as contemplated in section 5566b(c)(1) of the above-cited local tax collection law, to a claim expressed in the defendant’s concise statement of errors complained of on appeal that plaintiff was not entitled to costs and interest on this award because it is not a “taxpayer”. The relevant sections of the local tax collection statute are set forth in footnote one below.

The defendant filed a timely appeal from the court’s order dated January 21, 2011 which granted a refund of the overcharge to the plaintiff building contractor as well as interest and costs, and has submitted the following concise statement of errors complained of on appeal:

“In an action in assumpsit pursuant to 72 P.S. §5566 et seq. wherein plaintiff, John S. McManus, Inc. alleged that he (sic) paid an over-assessed license fee to defendant, Upper Chichester Township, the judgment order dated January 21, 2011, improperly awarded plaintiff interest and costs. Upon the filing of a written and verified claim, 72 P.S. §5566b allows for a refund for any taxes of any sort, license fees, penalties, fines or any other monies (sic) [to] which apolitical subdivision is not legally entitled and authorizes a refund. 72 P.S. §[5566b(c)(1)] allows interest to a taxpayer who has paid tax money to which the political subdivision is not legally entitled. This matter involved a dispute over the payment by a non-taxpayer of a license fee.” (Id., p. 1).

A thorough, careful, and thoughtful review of the pleadings which have been filed in this action reveals that the defendant township had never obj ected to the plaintiff’s request for interest and costs, nor for any other form of equitable relief to be awarded by the court if the plaintiff were to prevail in receiving a refund of the overcharged amount of the subject building permit fee. There is no mention in the defendant’s answer and new matter to the plaintiff’s complaint of any putative lack of entitlement to interest and costs in the event a refund was awarded. Moreover, the defendant township did not raise this issue in its answer to the plaintiffs motion for summary judgment, nor argued against any such award in its accompanying memorandum of law. It was not until the defendant filed a motion to vacate/reconsider the order that is currently the subject of this appeal that any semblance of the issue now raised in its concise statement ever, in fact, appeared. Even then, the matter was expressed in mere boilerplate fashion accompanied by a two page memorandum of law utterly bereft of supporting legal citations that would lend support to this claim. For these reasons, any issue raised herein must be deemed waived. Pennsylvania Rule of Appellate Procedure 302(a) (“ [i] ssues not raised in the lower court are waived and cannot be raised for the first time on appeal”); Dilliplaine v. Lehigh Valley Trust Co., 457 Pa. 255, 322 A.2d 114 (1974); Slappos v. J’s Development Associates, Inc., 791 A.2d 409 (Pa. Super. 2002)(barebones assertions and argument not appropriately developed by citation to authority are waived); Korn v. Epstein, 727 A.2d 1130, 1135 (Pa. Super. 1999)(appellant bears burden of establishing entitlement to relief by showing that trial court’s ruling is erroneous under the evidence and the law).

The defendant’s motion to vacate/reconsider the order dated January 21, 2011 that granted the plaintiff a refund of the over-assessed portion of the defendant township’s building permit fee as well as interest and costs was denied on February 18, 2011 with a cited reference to the on-point case authority of Skepton v. Borough of Wilson, 755 A.2d 1267 (Pa. 2000), to signal the court’s underlying rationale therefor. Contrary to the alleged error presently contended in this appeal that the plaintiff was not entitled to interest and costs under section 5566b(c)(1) of the Local Tax Collection Law because it was not a “taxpayer”, the defendant’s motion to vacate/reconsider the order on appeal reflected a mere boilerplate allegation accompanied by a short and barebones memorandum of law, completely bereft of citation to appropriate legal authority, that the over-assessed building permit fee charged against the plaintiff was not a “tax” pursuant to section 5566b(a) of the statute.

The defendant’s memorandum of law submitted in support of the defendant’s motion to vacate/reconsider the order dated January 21, 2011 is recapitulated below in its entirety:

“It is the Township’s position that a building permit fee is not a tax. The building permit fee at issue was a license fee designated to compensate Township for the costs that it incurred as regards the inspection of the Hilltop Elementary School. The building permit fee was not a tax and is not revenue enhancing, but was a fee imposed solely to reimburse Township for various costs it would incur during the aforesaid inspection process.
McManus’ complaint references the Local Tax Collection Law, 72 P.S. §5566 et seq. At §5566b(a), it is stated as follows:
‘Whenever any person or corporation in this commonwealth is paid or caused to be paid, or hereinafter pays or causes to be paid, into the Treasurer [sic] of any political subdivision, directly or indirectly, voluntarily or under protest, any taxes of any sort, license fees (emphasis added), penalties, fines or any other moneys to which a political subdivision is not [legally] entitled...”
Again, a license fee is distinguishable from a tax. The la[t]ter is revenue producing authorized under the taxing power of a governmental authority, while the former is imposed solely to reimburse a governmental authority for costs incurred and is authorized under the policing power of the local government. A ‘license fee’ is imposed for regulatory purposes and a ‘tax’ is imposed solely for the purpose of raising revenue. A license fee may be charged to defray the costs of inspections, but the fee cannot be a revenue enhancing measure. The building permit fee assessed in this matter was a fee to defer administrative costs, and was not a tax to raise revenue.
The Local Tax Collection Law at 72 P.S. 5566b(c) (1) specifically authorizes interest to be paid on ‘tax money ’. The statutoiy language in that regard is specific. Likewise, the reference therein to the ‘Fiscal Code’ at §806.1, Title 72 (72 P.S. §806.1), again, specifically refers to the payment of a ‘tax’.
Wherefore, Township respectfully requests that this honorable court enter an order vacating/reconsidering its judgment order of January 21,2011, pending further review by this court. (Defendant’s memorandum of law in support of motion to vacate/reconsider order, pp. 1-2).

Even if the defendant had presented a cognizable issue regarding the efficacy of awarding the plaintiff interest and costs in addition to the refund of an impermissibly over-assessed building permit fee, the relevant interpretative case law of this commonwealth, completely ignored by the defendant here below, currently makes no distinction between a tax and a license fee listed in Section 5566b(a) of the Local Tax Collection Law, nor does it deem a building contractor seeking refund of an overcharge for a building permit fee not to be a “taxpayer” and thus ineligible for interest and costs awardable under section 5566(c) (1) thereof. See: Skepton v. Borough of Wilson, supra (affirmance by the Pennsylvania Supreme Court of refund of building permit fees assessed against a school building contractor pursuant to municipal ordinances subsequently deemed constitutionally invalid and unenforceable, plus interest and costs); The Borough of Malvern v. K.R.I. Corporation, et al., 131 Pa. Cmwlth. 432, 570 A.2d 633 (1990)(building contractor who paid permit fee pursuant to zoning ordinance allowing for building of multifamily dwellings was entitled to refund, with statutory 6% interest, upon revocation of ordinance, even though ordinance was never ruled invalid or challenged in court). It was, therefore, proper and in accord with the evidence of record and the law for the court to refund the plaintiff building contractor the amount of the subject building permit fee to which the defendant was not entitled, plus legal interest and the costs expended in the bringing of this action to recover it. Skepton v. Borough of Wilson, supra; 72 P.S. 5566b(a) and (c)(1).

Conclusion

The appellate standard of review of a contested ruling in an action in assumpsit for a tax refund brought under the Local Tax Collection Law is whether the trial court abused its discretion, committed an error of law, or rendered a decision unsupported by the evidence. Skepton v. Borough of Wilson, supra, 755 A.2d at 1269, citing to Glenn Johnston, Inc. v. Department of Revenue, 556 Pa. 22, 726 A.2d 384, 385 n. 1 (1999). Where the inquiry deals with an allegation as to an error of law, the scope of review is plenary. Id., citing to Phillips v. A-Best Products Co., 542 Pa. 124, 665 A.2d 1167, 1170(1995).

It has been shown, despite the defendant’s clear waiver of any issue raised in this appeal, that there was no error of law, nor abuse of discretion in this court’s award of a refund plus interest and costs to the plaintiff. The evidence of record presented in this action to recover taxes wrongly collected and retained by the defendant, as well as the case law handed down by the courts of this commonwealth interpreting the local tax collection law mandate that this ruling not be reversed.

      . 72 P.S. § 5566b. Refund of taxes, etc., to which political subdivision is not legally entitled; interest
      (a) Whenever any person or corporation of this Commonwealth has paid or caused to be paid, or hereafter pays or causes to be paid, into the treasury of any political subdivision, directly or indirectly, voluntarily or under protest, any taxes of any sort, license fees, penalties, fines or any other moneys to which the political subdivision is not legally entitled; then, in such cases, the proper authorities of the political subdivision, upon the filing with them of a written and verified claim for the refund of the payment, are hereby directed to make, out of budget appropriations of public funds, refund of such taxes, license fees, penalties, fines or other moneys to which the political subdivision is not legally entitled. Refunds of said moneys shall not be made, unless a written claim therefor is filed, with the political subdivision involved, within three years of payment thereof.
      (c)(1) Any taxpayer who has paid any tax money to which the political subdivision is not legally entitled shall receive interest on such sum of money. The political subdivision shall pay interest on such sums at the same rate and in the same manner as the Commonwealth is required to pay pursuant to section 806.1 of the act of April 9, 1929 (P.L. 343, No. 176), known as ‘The Fiscal Code.’” (Id). (Emphasis added).

      . “72 P.S. § 806.1. Interest on overpayments
      (a) “Overpayment” shall mean any payment of tax which is determined in the manner provided by law not to be legally due. Simple interest shall be allowed and paid by the Commonwealth upon any overpayment to the Commonwealth of any tax....” (Id).

      With all due respect to the Defendant Township, the obligation of a taxing authority for the payment of interest on taxes received and to which it was not legally entitled and for which there has been made a formal demand and a ruling of improper detention was judicially determined a long time ago. Girard Trust Co. v. City & County of Philadelphia, 359 Pa. 319, 326, 59 A.2d 124, 128 (1948), citing to Park v. Pittsburgh School District Board of Public Education, 354 Pa. 236, 47 A.2d 222 (1946), and Philadelphia & Reading Coal & Iron Company v. School District Borough of Tamaqua, 304 Pa. 489, 156 Atl. 75, 76 (1931).


author: PICCIONE J.,

text:
    Atlantic Credit & Finance, Inc. v. List

      Joel M. Flink, for plaintiff.

      Norman J. Barilla, for defendant.

      Robert P. List, pro se.
    May 3, 2011
   PICCIONE J.,

Before this court for disposition are preliminary objections filed on behalf of defendant Robert P. List (hereinafter, “defendant”). The current action was commenced on March 5, 2008, when plaintiff Atlantic Credit & Finance, Inc. (hereinafter, “plaintiff’) filed its initial complaint, alleging default by defendant on credit card debt. Attached to the initial complaint is an affidavit indicating that defendant defaulted on a Household Bank account which was charged off on January 31,2007 and subsequently sold to plaintiff with a balance of $3,531.33.

On April 2, 2008, defendant filed his first set of preliminary objections. Plaintiff responded by filing an amended complaint with the same affidavit and a brief account statement attached. In the amended complaint, plaintiff alleges that defendant accumulated a $3,531.33 balance by accepting and using a credit card issued to defendant by plaintiff’s predecessor in interest. Plaintiff further alleges that it has made a demand upon defendant for payment but defendant has failed to pay any part of the remaining $3,531.33 balance. On May 19,2008, defendant filed the instant set of preliminary objections.

No further action was taken in this matter until August 10, 2010, when a notice of proposed termination of court cases was sentto both parties. OnAugust, 25,2010, plaintiff filed a praecipe for argument on defendant’s preliminary objections to the amended complaint. Oral argument in this matter was subsequently scheduled for and held on March 28, 2010. Prior to oral argument, counsel for defendant filed a Petition to Withdraw as counsel on the grounds that the petitioner has had no contact with defendant and has not been requested to continue his representation of defendant. Defense counsel did not appear at oral argument, and defendant represented himself at that proceeding.

During the argument, the parties addressed defendant’s preliminary objections as well as the lack of activity in this matter between May 19, 2008 and August 10, 2010. Plaintiff argues that, based on the local rules, it was defendant’s responsibility to request scheduling of oral argument on his preliminary objections. Plaintiff requests that defendant be penalized for the two year delay. With respect to the preliminary objections, defendant asserts that the amended complaint is insufficiently specific and fails to conform to law or rule of court.

Initially, the court notes that neither defendant nor his attorney should be penalized for the two year delay in moving this matter forward. Rule 211 of the Lawrence County Local Rules of court provides that, upon filing a motion, the moving party shall file a praecipe for argument or praecipe for disposition on written briefs. L211 (b)(2) (i), (iv). However, Rule 211 also permits the non-moving party to file a praecipe for argument within 10 days of being served with the motion if the moving party fails to file a praecipe for argument. L211 (b)(2)(h). If plaintiff desired to move this case forward, plaintiff could have filed a praecipe for argument ten days after it received defendant’s preliminary objections on May 19, 2008. Plaintiff chose not to do so until August 10, 2010, when it was threatened with termination of the case. As a result, plaintiff shares the responsibility for the delay in this matter. It is well-settled that “the application, construction and interpretation of a local rule of court are matters primarily to be determined by the court promulgating the local rule[.]” Patitucci v. Laverty, 576 A.2d 992, 998 (Pa. Super. 1990). The court concludes that the delay did not constitute such an egregious violation of the local rules to warrant sanctions.

In defendant’s first preliminary objection, defendant argues that plaintiff’s amended complaint is insufficiently specific. Pa.R.C.P. 1028(a)(3). “The pertinent question under Rule 1028(a)(3) is ‘whether the complaint is sufficiently clear to enable the defendant to prepare his defense,’ or ‘whether the plaintiff’s complaint informs the defendant with accuracy and completeness of the specific basis on which recovery is sought so that he may know without question upon what grounds to make his defense. ’ ” Rambo v. Greene, 906 A.2d 1232, 1236 (Pa. Super. 2006) (citing Ammlung v. City of Chester, 302 A.2d 491, 498 n. 36 (Pa. Super. 1973)). Rule 1019 of the Pennsylvania Rules of Civil Procedure requires that “[t]he material facts on which a cause of action or defense is based shall be stated in a concise and summary form” and that “[a] verments of time, place and items of special damage shall be specifically stated.” Pa.R.C.P. 1019(a), (f).

Defendant claims that plaintiff’s amended complaint fails to allege the date that defendant entered into a contract with plaintiff’s predecessor, the date the credit card was issued to defendant, the dates that defendant utilized the credit card, and the terms of the contract to which defendant allegedly agreed. Defendant is correct that none of this information appears on or is attached to the amended complaint, but not all of this information is required. At a minimum, however, plaintiff must allege the date at which the account became delinquent. American Express Centurion v. Decker, 9 Pa. D. & C.5th 299 (C.P. Centre 2009). Plaintiff must also attach a copy of a detailed statement of account setting forth the dates and the amounts of the transactions made by defendant. Commonwealth Financial Systems v. Hartzell, 17 Pa. D. & C.5th 176 (C.P. Lawrence 2010). “A defendant is entitled to know the dates on which individual transactions were made, the amounts therefore and the items purchased to be able to answer intelligently and determine what items he can admit and what he must contest.” Remit Corporation v. Miller, 5 Pa. D. & C.5th 43, 48 (C.P. Centre 2008); Marine Bank v. Orlando, 25 Pa. D. & C.3d 264 (C.P. Erie 1982). Because plaintiff has not provided this information, defendant cannot adequately respond to plaintiff’s allegations and prepare a defense. Therefore, defendant’s first preliminary objection must be sustained.

In his second preliminary objection, defendant asserts that the amended complaint fails to conform to law or rule of court in that a copy of the agreement upon which plaintiff’s claim is based is not attached to the amended complaint. Pa.R.C.P. 1028(a)(2). Rule 1019 of the Pennsylvania Rules of Civil Procedure states that “[w] hen any claim or defense is based upon an agreement, the pleading shall state specifically if the agreement is oral or written.” Pa.R.C.P. 1019(h). Rule 1019 further provides that “[w]hen any claim or defense is based upon a writing, the pleader shall attach a copy of the writing, or the material part thereof, but if the writing or copy is not accessible to the pleader, it is sufficient so to state, together with the reason, and to set forth the substance in writing.” Pa.R.C.P. 1019(i). In the context of a debt collection action against a credit card holder, it is generally required that the cardholder agreement and statement of account be produced to establish a right to judgment. Atlantic Credit and Finance, Inc. v. Giuliana, 829 A.2d 340, 345 (Pa. Super. 2003). “The failure to produce the cardholder agreement establishes a meritorious defense and a basis for preliminary objections pursuant to Pa.R.C.P. No. 1019(i).” Hartzell. 17 Pa. D. & C.5th 176.

A review of the amended complaint reveals that plaintiff’s cause of action is based on an agreement between defendant and plaintiff’s predecessor in interest. Plaintiff does not allege whether this agreement is oral or written. If it is written, plaintiff does not attach the agreement to the amended complaint. If it is written and cannot be recovered, plaintiff does not indicate why it cannot be recovered and does not set forth the substance of the agreement in writing. Therefore, plaintiff has failed to comply with Rule 1019, and defendant’s second preliminary objection must also be sustained.

ORDER OF COURT

And now, this May 3, 2011, the court having held oral argument on March 28, 2011 regarding defendant’s preliminary objections to plaintiff’s amended complaint, with Joel M. Flink, Esquire, appearing and representing the plaintiff, and defendant Robert P. List, appearing pro se, the court finds and it is hereby ordered and decreed:

1. Defendant’s first preliminary objection alleging lack of specificity is sustained pursuant to the attached opinion.

2. Defendant’s second preliminary objection alleging non-conformity to law is sustained pursuant to the attached opinion.

3. The amended complaint filed by plaintiff is hereby stricken, and plaintiff may file any further amended complaint within thirty (30) days after notice of this order of court.

4. The appearance of Norman J. Barilla, Esquire, as counsel for defendant in the above-entitled civil action is withdrawn.

5. The prothonotary shall properly serve notice of this order and attached opinion upon counsel of record; and if a party has no counsel, then upon said party at their last known address as contained in the court’s file.


author: FRIEDMAN, J.,

text:
    Tidwell v. Penny Foreclosures LLC

      Douglas C. Hart, for plaintiff.

      Thomas A. Will and George R. Farneth, for defendant.

      Jonathan A. Wakefield, pro se.
    April 29, 2011
   FRIEDMAN, J.,

Defendants have filed a motion for summary judgment in their favor and against plaintiff on all counts of the amended complaint. As to plaintiff’s tort claims, the motion is based on the two-year statute of limitations. As to the contract claims, defendants say that plaintiff has adduced no evidence of any breaches of the five sales agreements at issue. For the reasons stated below we grant defendants’ motion as to most counts, but deny it as to the tort claims related to only one of the five properties at issue.

The undisputed facts, as we understand them, are as follows. The events at issue took place in late 2005 and early January 2006 when plaintiff, a resident of the State of Oregon consulted additional defendant Duane J. Thielen, who also lives in that same general area, in the State of Washington, about purchasing residential real estate that she planned to re-sell or “flip.” Mr. Thielen eventually presented her with photographs of properties in the Pittsburgh area that were owned by defendants.

Those photographs were taken by former additional defendants Wakefield and Reichenbach, who are no longer parties to this action. Plaintiff selected, and eventually purchased, the five properties at issue:

141 Fremont Street in the City of Pittsburgh
1711 Freemont Street in the City of McKeesport
1409 Beech Street in the City of McKeesport
615 Industry Street in the City of Pittsburgh, and
722-722 1/2 Ridge Street in the City of McKeesport.

When plaintiff came to Pittsburgh in November 2006, several months after the sales had closed, she discovered that the properties were in substantially worse condition than she had expected. She filed the instant lawsuit roughly a year and a half after her 2006 visit.

Plaintiff has made several judicial admissions that are crucial to the statute of limitations issue. Plaintiff claims the admissions can be varied pursuant to the general rule that pleadings can be amended to conform to the evidence. However, that rule does not extend so far as to permit a plaintiff to allege one material fact and then to deny it when the fact becomes inconvenient.

A fair reading of plaintiff’s amended complaint indicates that plaintiff admits acquiring title to the various parcels at different dates but says she was not provided “with a fully signed and/or executed sales agreement and/or settlement statement with relation to the sale” of four of the five properties, and only part of the settlement statement for the 722 Ridge Street property. (Amended complaint ¶¶10, 11, 14 and 15.)

Plaintiff contends that, since she did not have these documents, she could not know when she acquired ownership of the parcels she had picked out for purchase. Plaintiff also says that defendants have violated the Pennsylvania Real Estate Seller Disclosure Law, 68 Pa. C.A. §§7301, et seq. Plaintiff says in her amended complaint that an unnamed agent of defendants made various misrepresentations to her on defendants’ behalf regarding the condition of the five properties. At argument it appeared that the unnamed agent is additional defendant Thielen. Plaintiff pleads in ¶20 that, because she resided in the state of Oregon, she was unable to visit the properties prior to purchasing them, the implication being that it was reasonable of her to rely on what Mr. Thielen said about them.

As to the question of Mr. Thielen’s being an agent of defendants, that seems to be a question for a factfinder. Mr. Thielen has admitted that he was a “seller of real estate” who was asked by defendants to sell properties they owned in Western Pennsylvania. Although plaintiff admits that she sought out Mr. Thielen, and although defendants paid Mr. Thielen a commission rather than a salary, we cannot conclude that these facts are dispositive of the agency issue. A factfinder will have to decide whether Mr. Thielen was acting on defendants’ behalf, on his own behalf, or, perhaps, on plaintiff’s behalf, when he relayed information to plaintiff about the properties. We note, however, that the condition of real property in January 2006 is not necessarily proven by showing its condition months later, in November 2006.

There are several undisputed facts related to what plaintiff either actually knew or what she is deemed to have known about the properties at issue. She sent money intended to cover both the purchase price for each of the parcels and the estimated closing costs, near the end of Januaiy 2006. She admittedly signed and returned some of the agreements of sale in February 2006. Her signature is an illegible scrawl and the ones she admits are hers are very similar to some that she denies are hers, as well as at least one she says she is unsure of. Plaintiff, who has the burden in order to defeat the motion for summary judgment, has adduced no expert evidence regarding the signatures she claims are not hers or about which she is unsure. As a result, at this late date, she has lost the opportunity to present such evidence, so for our purposes, all relevant signatures are not disputed and are deemed authentic.

There is no contention that there is any problem with title, so the only actionable defects would have to be those alleged in the physical condition of the houses themselves. However, the sales agreements all state clearly that plaintiff purchased the properties “as is.” Furthermore, the seller disclosure statements were clear and unambiguous: the condition of all the major systems for each parcel is “unknown.” In other words, no promise at all was made in the writings related to the contracts regarding the condition of any of the five properties. There is therefore no question of material fact for the jury to decide as to the contract claims.

As to the tort claims, defendants themselves made no representations to plaintiff beyond the provision in the agreement of Sale that they were selling each property “as is” and the notations on the disclosure forms that they were unaware of the condition of the properties. They might, however, be vicariously liable for the tort claims related to 722-722 1/2 Ridge Street if a factfinder believes Mr. Thielen was their agent and if the factfinder believes Mr. Thielen, knowingly or with reckless indifference, made misrepresentations as to the Ridge Street property which led plaintiff to make that purchase.

Plaintiff admittedly made no effort to inspect the properties until November 2006, ten months after she had sent all the money for the purchase, almost as many months after she had signed the agreements of sale, and five to seven months after the deeds were recorded.

Plaintiff considered the recording dates to be the earliest date for the commencement of the limitations period. Defendants say the closing dates are the latest dates for the limitations period to begin to run. The law supports defendants’ position.

The statute of limitations began to run no later than the dates shown on the deeds, which are also the dates on the settlement sheets:

141 Fremont Street deed dated February 2, 2006
1711 Freemont Street deed dated February 10, 2006
1409 Beech Street deed dated February 20, 2006
615 Industry Street deed dated February 17, 2006
722-722 1/2 Ridge Street deed dated June 30, 2006

Mr. Wakefield’s severed counterclaim against defendants is unaffected by this decision.

CONCLUSION

Plaintiff has not adduced sufficient evidence to raise an issue of material fact as to either the bar of the statute of limitations for the tort claims of misrepresentation related to the sales of four of the five properties or as to the breach of contract claims related to any of the agreements of sale. However, the question of whether or not Thielen was defendants’ agent cannot be decided at this stage as to the property at 722-722 1/2 Ridge Street, since the statute of limitations had not run prior to the date this action was filed.

The trial will proceed as scheduled, limited to the claims based on the allegations that defendants knowingly or negligently misrepresented to plaintiff the true condition of the property at 722-722 1/2 Ridge Street.

ORDER OF COURT

And now, to-wit, this April 29, 2011, for the reasons set forth in the accompanying memorandum in support of order, the defendants’ motion for summary judgment is hereby granted in part and denied in part. The only claims that survive are the tort claims related to misrepresentation by defendants’ alleged agent, additional defendant Duane J. Thielen, as to the condition of the premises at 722-722 1/2 Ridge Street, McKeesport, Pennsylvania. All other tort claims and all the contract claims are dismissed with prejudice.

      . Plaintiff contends that Mr. Thielen was an agent of defendants, a conclusion that is contested.

      . Mr. Wakefield had a counterclaim against defendants for payment of his photography fee, but that claim has been severed as Mr. Wakefield’s involvement has only evidentiaiy value for the rest of this case.