author: TUCKER, J.,

text:
    Abbotts Square Condominium Association, Inc. v. Stobba Residential Association, L.P.

      August 2, 2013—

      Edward J. Hayes, for appellants

      Kenneth Ferris, for appellee
   TUCKER, J.,

I. Procedural History

This matter comes before the court on appeal from an order denying Stobba Residential Associates, L.P. and Stobba Residential GP, LLC’s (hereinafter referred to as “appellants”) petition to strike/open confession of judgment order entered by J. Tucker (05/06/2013). The court, upon consideration of the petition and responses thereto, refused to strike and/or open the confession of judgment entered in favor of Abbotts Square Condominium Association, Inc. (hereinafter referred to as “appellee”) against appellants in the Philadelphia County Court of Common Pleas. Confession of J. filed (01104/2013); order entered by J. Tucker (05/06/2013). The basis of this judgment is on appeal.

On May 24, 2013, appellants timely filed an appeal of the court’s May 5,2013 order. On May 30,2013, this court ordered appellants to file a concise statement of matters complained of on appeal pursuant to Pa. R.A.P. 1925(b) (“1925(b) statement”). On June 17, 2013, appellants timely filed their 1925(b) statement.

Appellant’s 1925(b) statement states that this court erred in several regards. However, after careful review, this court finds these claims to be without merit. Although appellants argue that they were not a party to the warrant of attorney upon which judgment was confessed because they did not sign the declaration of condominium containing the provision, the court finds that appellants knew or should have known that the provision was intended to be incorporated into the agreement based on the language of the contract and the parties’ prior course of dealings. Furthermore, appellants have failed to set forth a meritorious defense with sufficient evidence. Thus, this court did not err in denying appellants’ motion to strike/ open confession of judgment. A discussion ensues:

II. Facts

The Abbotts Square Condominium was created by the recording of a declaration of condominium (hereinafter referred to as “declaration”) executed March 22,1985 and recorded in the Office of the Department of Records of Philadelphia on April 2, 1985. Ans. to pet. to strike/open confessed J. (02/25/2013). Appellee exists as the “Unit Owner’s Association” for the purposes set forth in the declaration. Confession of J. filed (01/04/2013). Article 13.1 of the declaration grants appellee the authority to make common expense assessments and special assessments due on or before the first day of each month. Confession of J. filed (01/04/2013). Furthermore, a delinquent unit owner shall be obligated to pay all such expenses which constitute part of the delinquent assessments. Id.

The Declaration contains the following clause:

13.7 Confession of Judgment. IN ORDER TO EXPEDITE THE EXECUTIVE BOARD’S COLLECTION OF ANY DELINQUENT ASSESSMENTS, EACH UNIT OWNER (BY THE ACCEPTANCE OF THE DEED TO HIS UNIT) SHALL BE DEEMED TO HAVE APPOINTED ANY ONE OR MORE EXECUTIVE BOARD MEMBERS THE ATTORNEY-IN-FACT FOR SUCH UNIT OWNER TO CONFESS JUDGMENT AGAINST SUCH UNIT OWNER IN ANY COURT OF COMPETENT JURISDICTION IN PENNSYLVANIA, FOR ANY SUCH UNPAID ASSESSMENT(S), WHICH APPOINTMENT (BEING FOR SECURITY) SHALL BE IRREVOCABLE; AND FOR SO DOING A COPY OF THIS ARTICLE 13 AND SAID DEED, BOTH VERIFIED BYAFFIDAVIT, SHALLBE SUFFICIENT WARRANT. THE AUTHORITY GRANTED HEREIN TO CONFESS JUDGMENT SHALL NOT BE EXHAUSTED BY ANY EXERCISE THEREOF BUT SHALL CONTINUE FROM TIME TO TIME AND AT ALL TIMES UNTIL THE DECLARATION SHALL BE TERMINATED.

Confession of J. filed (01/04/2013), at ex. A. Appellants are not signatories to the declaration. Motion to strike/ open confessed J. (02/06/2013).

On December 14, 2004, appellant Stobba Residential Associates, LP (hereinafter referred to as “Stobba LP”) took title to the eleven (11) condominium units from Grantor Stobba Associates, LP by way of a recorded deed. Ans. to pet. to strike/open confessed J. (02/25/2013). Appellant Stobba Residential, GP, LLC (hereinafter referred to as “Stobba GP”) is the general partner of Stobba LP. Id. The deed dated December 14, 2004 is signed by Eric Blumenfield on behalf of Stobba LP and Stobba GP. Confession of J. filed (01/04/2013), at ex. B; ans. to pet. to strike/open confessed J. (02/25/2013).

The deed provides:

ALL THOSE CERTAIN CONDOMINIUM UNITS AND THE COMMON ELEMENTS APPURTENANT THERETO DESCRIBED ON EXHIBIT A ATTACHED HERETO AND MADE APART HEREOF

Confession of J. filed (01/04/2013), at ex. B. Exhibit Ato the deed contains a legal description of the condominium units involved in the 2004 transaction and provides, in relevant part:

ALL THOSE CERTAIN UNITS IN THE PROPERTY KNOWN, NAMED AND IDENTIFIED AS ABBOTTS SQUARE CONDOMINIUM LOCATED IN PHILADELPHIA, COMMONWEALTH OF PENNSYLVANIA, WHICH HAS HERETOFORE BEEN SUBMITTED TO THE PROVISIONS OF THE UNIFORM CONDOMINIUM ACT 68 PA. C.A. 3101 ET SEQ. BY THE RECORDING IN THE PHILA. DEPARTMENT OF RECORDS OF ADECLARATION DATED 3/22/1985 AND RECORDED ON 4/2/1985 IN DEED BOOK FHS 112 PAGE 306...

Confession of J. filed (01/04/2013), ex. A.

In 2006, Stobba LP applied to the condominium association to subdivide certain condominium units. In response, the declaration was amended to reflect this subdivision on July 14, 2006 and recorded on July 27, 2006. Confession of J. filed (01/04/2013); confession of J. filed (01/04/2013), at ex. C. The amended declaration states that “the Declaration encumbers certain real estate described in Exhibit A attached hereto and made a part hereof.” Id. Exhibit A to the amended declaration describes the property of Abbotts Square Condominium. This amended declaration is signed only by appellee but references appellants by name (regarding the requested subdivision). Id.

On January 4,2013, appellee, in response to appellants’ failure to make payments for assessments, levied against the units in the amount of one hundred and twenty-three thousand two hundred and twelve dollars and forty-eight cents ($123,212.48), and filed a complaint in confession of judgment against appellants pursuant to the warrant of attorney contained in the declaration. Ans. to pet. to strike/ open confessed J. (02/25/2013). Appellants responded by filing a motion to strike/open confession of judgment, arguing that judgment by confession cannot be entered against them because they are not a signatory to the warrant of attorney; Stobba GP is not a party to the deed; and that the complaint does not set forth sufficient facts to enable the court to determine if they are in default. Mot. to strike/open confessed J. filed (02/06/2013). Appellee subsequently filed an answer to appellants’ motion to strike/open confession of judgment. Ans. to. mot. to strike/ open confessed J. filed (02/25/2013). On May 06, 2013, this court denied appellants’ contested motion to strike/ open confession of judgment. Order entered by J. Tucker (05/06/2013).

III. Legal Analysis

a. The court did not err in denying appellants’ motion to strike confession of judgment because the confession of judgment provision was incorporated into the deed and the conduct of the parties indicates an intention for the incorporation of the declaration into the deed.

This court properly denied appellants’ motion to strike confession of judgment. A motion to strike confession of judgment is governed by Pa. R.C.P. 2959. Pa. R.C.P. 2959. It is well settled that a confessed judgment is properly stricken only when there is a fatal defect in the judgment that is apparent on the face of the record. Rittenhouse v. Barclay White, Inc., 625 A.2d 1208, 1210 (Pa. Super. 1993) (citing Davis v. Woxall Hotel, Inc., 577 A.2d 636, 638 (Pa. Super. 1990) (citations omitted)). In considering the merits of a petition to strike, the court is limited to a review of only the record as filed by the party in whose favor the warrant is given, i.e., only the complaint and the documents which contain the confession of judgment clauses. Atlantic National Trust, LLC v. Stivala Investments, Inc., 922 A.2d 919, 922 (Pa. Super. 2007)(citing Resolution Trust Corp. v. Copley Qu-Wayne Assocs., 683 A.2d 269, 273 (Pa. 1996)). Matters dehors the record filed by the party in whose favor the warrant is given will not be considered. Resolution Trust Corp, 683 A.2d at 273. Therefore, if the truth of the factual averments contained in such record is disputed, then the remedy is by a proceeding to open the judgment and not to strike the judgment. Id. at 273.

A confession of judgment shall not be stricken where the record is self-sustaining. Resolution Trust Corp, 683 A.2d at 273. A record is self-sustaining where the warrant of attorney is in writing; is signed by the person to be bound by the warrant of attorney; and the signature is in direct relation to the warrant of attorney. L.B. Foster Co. v. Tri-W Construction Company, Inc., 186 A.2d 18, 19-20 (Pa. 1962)(citing Frantz Tractor Co. v. Wyoming Valley Nursery, 120 A.2d 303, 306-07 (Pa. 1956)). To be sure, the authority to confess judgment must be clear and explicit; an agreement containing a warrant of attorney must be strictly construed. Solebury Nat’l Bank v. Cairns, 380 A.2d 1273, 1275 (Pa. Super. 1977).

Where a party has signed an agreement with clear and unambiguous language, the plain language of the agreement cannot be ignored. Herman v. Stern, 213 A.2d 594, 598 (Pa. 1967). As such, a general reference in the body of an agreement to a warrant of attorney or confession of judgment clause outside the agreement is insufficient to bind the signatory, unless the signatory signs the warrant of attorney where it appears. L.B. Foster Co., 186 A.2d at 19-20. In addition, a modified contract incorporates a warrant of attorney from the original contract if it is clearly and expressly incorporated into the modified contract. Frantz Tractor Co., 120 A.2d at 306-07. Moreover, when the prior course of dealings between the patties indicates their clear intention to have a warrant of attorney confession of judgment provision incorporated into an agreement, or that the parties knew or should have known that an outside provision was included in the contract, such language is sufficient to put the parties on notice of the inclusion of the provision, and is therefore binding. Westinghouse Electric Co. v. Murphy, Inc., 228 A.2d 656, 661 (Pa. 1967)(giving force to an indemnity clause included in the appendix to a written agreement and comparing indemnity clauses to confession of judgment clauses).

Here, the declaration properly incorporated the confession of judgment clause into the deed to the condominium units. The deed, signed by appellant Stobba LP, makes explicit mention of the recorded declaration and that the property is subject to its provisions. Appellants claim that the motion to strike confession of judgment should be granted because they did not sign the declaration. However, this is impracticable. The declaration was signed and recorded in 1985 when the association was created. It is impracticable for every purchaser of condominium units to sign the declaration, in turn requiring the document to be re-recorded. It is for this reason that the deed for each unit incorporates the declaration, encumbering each unit to its provisions. This puts a reasonable purchaser of a condominium unit on notice of the declaration. Appellants either knew or should have known that this provision was included in the contract.

The Pennsylvania Uniform Condominium Act, 68 Pa. C.S. §3301 et seq. governs the management of condominiums. 68 Pa. C.S. §3302 enumerates the powers of unit owners’ associations. Here, appellee had the authority to enact rules and regulations for the governance of the condominium and the power to levy assessments for common area expenses. 68 Pa. C.S. §3302. Of special note, the association may “exercise any other powers conferred by the declaration or bylaws.” 68 Pa. C.S. §3302(a)(14).

Stobba Associates LP (not to be confused with Stobba LP) took title to the condominium property at some point between 1985 and 2004, then conveyed the units to appellant Stobba LP in December of 2004. During and after this time period, appellants accepted the benefits of common element maintenance services rendered by appellee. These services, as well as the subsequent assessments levied, are made possible for condominium unit owners due to the provisions of the declaration. Furthermore, appellant Stobba LP’s application to subdivide condominium unit in 2006 evidences knowledge of the policies and procedures of the declaration. Appellants’ conduct indicates knowledge of the declaration. As such, they either knew or should have known of the confession of judgment provision.

Appellant Stobba GP claims that they are not a party to the deed and as such, even if appellant Stobba LP is bound by the deed and the declaration, Stobba GP is not. This claim is inapposite. Stobba GP is the general partner of Stobba LP. The courts have consistently held that a partnership is not a legal entity separate and distinct from that of the individuals who compose it. It is, rather, a relation or status between two or more persons who unite their labor or property to carry on a business for profit. Morrison’s Estate, 22 A.2d 729 (Pa. 1941). Moreover, the Pennsylvania Revised Uniform Limited Partnership Act provides that a limited partnership is composed of one or more general partners, and that the general partner has unlimited liability for the obligations of the partnership. 59 Pa. C.S. §8533. Therefore, appellant Stobba GP, as the general partner of Stobba LP, is liable for the partnership’s debts and is a proper party defendant in an action against the partnership.

Based on the declaration’s incorporation into the deed for appellants’ units and the conduct of appellants evidencing knowledge of the declaration, the warrant of attorney confession of judgment clause was properly incorporated in the agreement. This is not a case where a confession of judgment was “foisted upon anyone by implication or by general and non-specific reference.” Franz, 120 A.2d at 305. Rather, appellants either knew or should have known of such a provision. This court properly denied appellant’s motion to strike confession of judgment because there were no fatal defects on the face of the self-sustaining record in this matter.

b. The court did not err in denying appellants’ motion to open confession of judgment because they did not present a meritorious defense.

This court also properly denied appellants’ motion to open confession of judgment. Like a motion to strike confession of judgment, a motion to open confession of judgment is also governed by Pa. R.C.P. 2959. Pa. R.C.P. 2959. The decision whether to open a confessed judgment involves an exercise of the court’s equitable powers. Rittenhouse, 625 A.2d at 1210 (citing Continental Bank v. Axler, 510 A.2d 726, 728 (Pa. Super. 1986)). In reviewing a petition to open judgment, the trial court should view the proffered evidence in the light most favorable to the petitioner. Rittenhouse, 625 A.2d at 1210. A judgment taken by confession will only be opened if the petitioner acts promptly, alleges a meritorious defense, and presents sufficient evidence of that defense to require submission of the issues to the jury. Id. A meritorious defense is a defense that if proven at trial would justify relief. Smith v. Morrell Beer Distribs., 29 A.3d 23, 26-28 (Pa. Super. 2011). Evidence of a meritorious defense must be “clear, direct, and precise, and believable.” Germantown Savings Bank v. Talacki, 657 A.2d 1285, 1289 (Pa. Super. 1995).

Here, appellants do not seriously dispute the fact that amounts are owed. Rather, they claim that appellee did not properly itemize the amounts allegedly due. This does not constitute a meritorious defense to a confession of judgment. In interpreting the sufficiency required of a confessed judgment, the Superior Court has held that Pa.R. C.P. 2952(f) (pertaining to confessions of judgment) does not require the party seeking confession of judgment to itemize the monthly rentals represented in the judgment. Woxall Hotel, 577 A.2d at 638.

Nevertheless, the complaint sufficiently itemizes the amounts allegedly due. Article 13.6 of the declaration provides that a delinquent unit owner shall be obligated to pay all expenses, including attorney’s fees, incurred in the collection of delinquent assessments and that such expenses constitute part of the delinquent assessments that are collectible. Confession ofJ. filed (01/04/2013), at ex. A. Here, appellee confessed judgment for one assessment, in two types: assessments in arrears and a special assessment for roof repair. Id. Specific money amounts are provided for each condominium unit, totaling one hundred and twenty-three thousand two hundred and twelve dollars and forty-eight cents ($123,212.48). Confession of J. filed (01/04/2013).

This court did not err in denying appellants’ motion to open confession of judgment because appellants’ have failed to assert a meritorious defense.

IV. Conclusion

The court properly denied appellants’ motion to strike confession of judgment because the confession of judgment provision was properly incorporated in the agreement. Therefore, there were no fatal defects on the face of the record. With regard to the motion to open confession of judgment, appellants failed to allege a meritorious defense in response to the assessments. The court’s ruling should stand.

      .68 Pa. C.S.A. §3302 and §3314 permit a condominium association to levy and collect regular monthly assessments and special assessments for the maintenance of the common elements, and to levy expense assessments as to units where the expense is caused by negligence or misconduct on the part of a unit owner.

      . Neither appellants nor appellee indicate when Stobba Associates LP took title to its units. Neither party discusses the relationship between Stobba Associates LP and Stobba LP.


source: Caselaw Access Project

license: Public Domain

text:
    Bank of N.Y. Mellon v. Tarboro

      August 2, 2013—

      Christian C. Nduka, for appellants

      Chandra M. Arkema, for appellee
   TUCKER, J.,

I. PROCEDURAL HISTORY & FACTS

This matter comes before the court from the granting of The Bank of New York Mellon’s (hereinafter referred to as “appellee”) motion to enforce settlement against Robert Lee Tarboro, Jr. (deceased), Robert Tarboro III, and Stacie Tarboro (hereinafter collectively referred to as “appellants” and separately as named). On July 21, 2010, appellee, serving as trustee for the holders of the certificates, First Horizon Mortgage Pass-Through Certificates Series FH06-FA3, by First Horizon Home Loans, a division of First Tennessee Bank National Association, Master Servicer, in its capacity as agent for the trustee under the pooling and servicing agreement, filed a complaint in mortgage foreclosure against the appellants for a property located in Philadelphia, PA. Compl. filed (07/21/2010).

On March 27, 2006, in consideration of a loan, Robert Lee Tarboro, Jr., executed and delivered to First Horizon Home Loan Corporation, an “Interest First Note” with a principal amount of one hundred and twenty-seven thousand five hundred dollars ($127,500.00) and initial monthly installments of seven hundred seventeen dollars and nineteen cents ($717.19) payable as to the principal and interest for the first one hundred twenty (120) months. Compl. filed (07/21/2010). Thereafter, the monthly installments were to increase to nine hundred sixty-nine dollars and forty-seven cents ($969.47), commencing on May 1, 2006, with a maturity date of April 1, 2036. Id. This “Interest First Note” was secured by a mortgage on the Philadelphia, PA subject to appellee’s compliant in mortgage foreclosure. Id.

Mortgager, Robert Lee Tarboro Jr. died intestate on December 25, 2009. Compl. filed (07/21/2010). By letter of administration dated January 12, 2010, Stacie Tarboro, the daughter of Robert Lee Tarboro, Jr., and Robert Tarboro III, the son of Robert Lee Tarboro, Jr., were appointed co-administrators of the estate of Robert L. Tarboro, Jr. Id. Appellee’s complaint in mortgage foreclosure seeks the balance of the principal and accrued but unpaid interest from January 1, 2010 through July 23, 2010. Id.

Appellants filed their answer to the complaint in mortgage foreclosure on August 18, 2010 and the matter proceeded to litigation. Ans. (08/18/2010). Appellants’ answer was filed by Michael H. Gaier, Esq. (hereinafter referred to as “Attorney Gaier”) on behalf of all appellants. Id. Depositions for this matter were scheduled for March 13, 2012. Mot. to enforce settlement (01/30/2013). The deposition evolved into settlement discussions and a resolution to the underlying action in mortgage foreclosure was reached. Id. A resolution was reached as a result of these discussions; both Stacie Tarboro and Attorney Gaier participated in the deposition/settlement discussions. Id. On April 12, 2012, the court sustained a number of preliminary objections filed by appellee against appellants’ counterclaims to the mortgage foreclosure action. Order entered by J. Panepinto (04/12/2012).

On August 22, 2012, almost five (5) months after the depositions, appellants executed a settlement and release agreement memorializing the terms of the March 2012 deposition settlement. Mot. to enforce settlement (01/30/2013). Appellee remitted fifteen thousand dollars ($15,000.00) to appellants pursuant to the settlement argeement. Id. The appellants failed to comply with the terms of the settlement agreement. Id. On January 9,2013, Christian C. Nduka, Esq. entered his appearance on behalf of appellants (hereinafter referred to as “Attorney Nduka”). Withdraw/entry of appearance of counsel. (01/09/2013).

On January 30, 2013, appellee filed a motion to enforce settlement; the response date was February 21, 2013 pursuant to the Philadelphia County Rules of Court. Mot. to enforce settlement (01/30/2013). Instead of filing an answer to appellee’s motion to enforce settlement, Attorney Nduka inadvertently filed a separate motion to enforce settlement with an entirely different control number. Mot. to enforce settlement (02/19/2013); N.T. (04/18/2013) at 2-3. Unfortunately, this action resulted in the cumbersome disposition of appellee’s January 2012 motion to enforce settlement.

Essentially, the court granted both appellants and appellee’s’ uncontested motions to enforce settlement, thereby entering conflicting relief. Order entered by J. Tucker (02/28/2013); order entered by J. Tucker (03/14/2013). Appellee filed a motion for reconsideration of the court’s order granting appellants’ motion to enforce settlement. Mot. for reconsideration (03/25/2013). On April 2, 2013, the court issued a rule for the parties to show cause why appellee’s motion for reconsideration should not be granted. Rule issued (04/02/2013). The rule was returnable April 18, 2013 at 10:00 am, Courtroom 675, City Hall, Philadelphia, PA. Id. A Pa.R.C.P. 236 notice of the rule was sent via the Philadelphia County Civil Administration electronic filing system the same day. Notice Given Under Rule 236 (04/02/2013).

On April 18, 2013, the court crier called the instant matter for disposition; although appellants’ counsel was present, Ms. Tarboro was not present. N.T. (04/18/2013). After the rule was disposed, the court entered an order vacating the March 2013 order and granted appellee’s motion to enforce settlement. Order entered by J. Tucker (04/18/2013). The court notes irregularities on this order, which states, “Plaintiffs motion for reconsideration and vacate the March 14, 2013 docketed Order is Granted. Defendants motion to Enforce Settlement is Granted.” Id. Clearly, the court meant to grant appellees’ motion to enforce settlement and not appellant’s motion to enforce settlement. Id.

Appellants filed their own motion for reconsideration of the court’s April 18, 2013 order, wherein seeking the following relief: 1) that the settlement and release agreement be set-aside; 2) a reversal of a prior court’s ruling on appellee’s preliminary objections; and 3) a rescission of the settlement and release agreement via a refund of the fifteen thousand dollar ($15,000.00) check remitted to appellants by appellee. Mot. for reconsideration (04/25/2013). On April 30, 2013, the court granted appellants’ motion for reconsideration and reiterated that the March 2013 granting of their motion to enforce settlement agreement was vacated and the granting of appellee’s February 2013 motion to enforce settlement was reinstated.

It is from this order that appellants appeal to the Superior Court. Superior Court Appeal (5/20/2013). On May 23, 2013, the court ordered appellants to file of record a concise statement of matters complained of on appeal pursuant to Pa.R.A.P. 1925(b) (“1925(b) statement”). Order entered by J. Tucker (05/23/2013). Appellants complied; appellants allege the following errors committed by the court, verbatim:

1. The Notice of Motion Hearing, dated April 3, 2013, never indicated that Defendant Stacie Tarboro must be present to testify at the motion hearing scheduled on April 18, 2013 at 10:00 A.M. in Courtroom 675, City Hall, Philadelphia, PA 19107. Attached as Exhibit “A” see copy of Notice of Motion Hearing.
2. The Court denied Defendant, Stacie Tarboro, her constitutional rights of notice and opportunity to be heard.
3. That same Court Order did not put Defendants on notice that Defendants’ former counsel, Michael Gaier,. Esquire would be called as a witness by the Plaintiff, Bank of New York Mellon, to testify against Defendants and divulge attomey/client privileged information.
4. At about 10:15 A.M., when the case was called, Defense counsel, Christian C. Nduka, Esquire informed Judge Leon W. Tucker, that Defendant Stacie Tarboro, was running late and that her testimony was crucial. That notwithstanding, the hearing went ahead and Defendant’s former counsel, Michael Gaier, Esquire was allowed to testify for the Plaintiff, over Defendants counsel’s objection.
5. Defendant, Stacie Tarboro, made some serious allegations against her former counsel, Michael Gaier, Esquire, that he defrauded her and duped her into signing the Settlement Agreement.
6. Defendant, Stacie Tarboro, also made a serious allegation of fraud against Plaintiff, Bank of New York Mellon, its Counsel and agents that despite their knowledge that both her and her brother, did not have good credit and would not be able to repair their credits within 120 days, they connived and conspired with Defendant’s former Counsel, Michael Gaier, Esquire, to draft a Settlement Agreement which was designed to transfer the property to the Bank after 120 days.
7. These allegations made by Defendant, Stacie Tarboro, are serious enough that if found to be true, would have warranted a Denial of Plaintiff’s Motion to Enforce Settlement.
8. The Court erroneously permitted Defendants’ former counsel, Michael Gaier, Esquire to testify for Plaintiff and against Defendants, in the absence of Defendant Stacie Tarboro. After the Transcript of the hearing, held on April 18, 2013, in Court Room 675 City Hall, Philadelphia, Pennsylvania, was read to Defendant, Stacie Tarboro, she believes that her former counsel, Michael Gaier, Esquire, in his testimony in Court on that day, made some serious misrepresentation of facts, that if present, that she would have successfully refuted, and would have swayed the Court to Deny Plaintiff’s motion.
9. Defendant, Stacie Tarboro, believes that her former counsel, Michael Gaier, Esquire, in his testimony at the hearing in Court on April 18, 2013, divulged some confidential information about defendants without their waiver, thereby breaching attomey/client confidentiality rule.
10. The hearing on Plaintiff’s Motion to Enforce Settlement, held on April 18, 2013, ended at about 10:30 A.M., with Judge Tucker stating that he will take the matter under advisement. However, at 10:40 A.M., when Defendant, Stacie Tarboro walked into the Courtroom, she was handed a copy of the Order Granting Plaintiff’s Motion to Enforce Settlement.
11. Since Judge Tucker did not wait for Defendant, Stacie Tarboro to arrive in Court before her former counsel was permitted to testify as a witness for Plaintiff, Judge Tucker, should have at least taken the matter under advisement, by reading Stacie Tarboro’s Affidavit, contained in her answer to Plaintiff’s Motion to Enforce Settlement. The rapidity with which Judge Tucker entered the Order (within 10 minutes after the hearing ended) shows that Stacie Tarboro’s Affidavit was not read by the Court before decision was rendered.

1925(b) statement (06/08/2013). A discussion ensues:

II. LEGAL ANALYSIS

A. Appellants failed to comply with Pa.R.A.P. 1925(b); therefore all claims on appeal are waived.

It is well settled that when the trial court orders an appellant to submit a 1925(b) statement, it is a crucial component of the appellate process. Commonwealth v. Lord, 553 Pa. 415, 417 (1998). Pa.R.A.P. 1925(b) requires that the statement of issues complained of shall be concise and set forth only those rulings or errors that appellant intends to challenge. Pa.R.A.P. 1925(b)(4)(i). Issues not raised in accordance with the provisions of Pa.R.A.P. 1925(b) are waived. Pa.R.A.P. 1925(b)(4)(vii). The issues raised in the 1925(b) Statement must be “non-redundant” and “non-frivolous.” Pa.R.A.P. 1925(b)(4)(iv). Here, appellants submitted an eleven (11) paragraph 1925(b) statement essentially claiming that the court, somehow committed errors while presiding over the previously scheduled time certain rule returnable. 1925(b) statement (05/23/2013). For example, apparently the court ruled on appellants’ motion for reconsideration too quickly. Id. Such claims are frivolous. Indeed, appellants’ 1925(b) statement is a play-by-play of everything appellants did not like about the rule returnable hearing. Id. Furthermore, appellants did not claim that the court erred on ruling in the underlying motions to enforce settlement. Id. Therefore, any issue with underlying ruling on the motion to enforce settlement is waived. For these reasons, the court recommends that this appeal be dismissed.

B. Nevertheless, the court did not err in presiding over the rule returnable for the motions to enforce settlement.

The court will respond to appellants’ allegations of error in turn, combining and summarizing issues to aid in ease of disposition:

1. The court’s Pa.R.C.P. 236 notice did not specify that Ms. Tarboro needed to be present at the rule returnable hearing; did the court deny Ms. Tarboro her constitutional right of notice and opportunity to be heard?

Philadelphia County courts are governed by the Philadelphia County Court Rules and the Pennsylvania Rules of Civil Procedure. Pursuant to these rules, the court may electronically serve notice of the entry of orders or judgments. Pa.R.C.P. 205.4; Pa.R.C.P. 236; Phila. Civ. R. *205.4. Rule 236 states in relevant part:

(d) The prothonotary may give the notice required by subdivision (a) or notice of other matters by facsimile transmission or other electronic means if the party to whom the notice is to be given or the party’s attorney has filed a written request for such method of notification or has included a facsimile or other electronic address on a prior legal paper filed in the action.

Pa.R.C.P. 236(d). The purpose of Rule 236 is to give notice to litigants of the entry of an order or judgment. Id. In addition, it is axiomatic that service upon counsel for a represented party is service upon the party. Pa.R.C.P. 440.

Here, appellants claim that the Rule 236 order of April 2, 2013 did not specify that Ms. Tarboro should appear at the rule returnable hearing. First, the court did not send out the April 2, 2013 Rule 236 notice; the prothonotary electronically sent appellants’ counsel notice pursuant to the Philadelphia and Commonwealth Rules of Civil Procedure. Notice under Rule 236 (04/02/2013). The Rule 236 notice is standardized. Second, the April 2,2013 Rule 236 notice was actually notice of the court’s previously scheduled March 27, 2013 rule to show cause order. The rule to show cause order specified the date, time certain, location and subject matter of the Rule. Rule issued (04/02/2013). Third, the record is clear that attorney Nduka expected Ms. Tarboro to be present at the rule hearing; she simply arrived too late. N.T. (04/18/2013) at 7, 19-21. To now claim on appeal that Ms. Tarboro was somehow not notified of the rule hearing is disingenuous. Furthermore, counsel is allowed to proceed, as counsel desires, with the witnesses counsel desires.

Fourth, even though Ms. Tarboro was not present at the rule hearing, her due process rights were not violated because: 1) Attorney Nduka entered his appearance on behalf of appellants on January 9, 2013; 2) Attorney Nduka was served notice of the issuance of the rule via electronic Rule 236 Notice; 3) Attorney Nduka appeared at and participated in the rule hearing. N.T. (04/18/2013).

Fifth, this court will not advise counsel how to prepare for and litigate their cases. Counsel is free to decide how to proceed, which usually involves a determination of whether or not witnesses need to be called in order to obtain the relief counsel seeks. It was not incumbent upon the court here to specify which witnesses were to be present to dispose of a rule to show cause why a motion to enforce settlement should or should not be granted. Either Attorney Nduka didn’t advise Ms. Tarboro that her testimony was necessary, or she simply arrived too late. Either way, no error can be ascribed to the court for these occurrences.

2. The court’s Pa.R.C.P. 236 notice did not specify that appellants’ former counsel, Attorney Gaier, would be called as a witness by opposing counsel; therefore, did the court fail to put appellants’ on notice of Attorney Gaier’s testimony?

The court incorporates the reasoning above in response to this “allegation” of error. The court does not control which witnesses are called, neither for plaintiff nor for defendant. Again, the Rule 236 notice is standardized and counsel is free to litigate their cases and motions however they see fit. The court does not err when counsel is caught off guard by opposing counsel. This claim is without merit.

3. The rule returnable hearing commenced promptly at the scheduled time and place. Ms. Tarboro was not present when former counsel Attorney Gaier was called to testify; therefore, did the court err in allowing Attorney Gaier to testify in the absence of Ms. Tarboro?

The court is responsible for presiding over its courtroom in a manner to provide the efficient administration of justice. This court presides over civil motions court; the cases are listed for hearing every other week and are called according to the hearing list. Most litigants arrive early and check in with the court officer. To the extent that a party is not ready to proceed when called, it is within the court’s discretion to dismiss the matter outright, on its own motion. Pa.R.C.P. 218 (“Party Not Ready When Case is Called for Trial”). Where the defendant in not ready when the case is called, the plaintiff may proceed. Id. Lastly, “the person seeking the order applied for shall argue first....” Pa.R.C.P. 21 l(“Oral Arguments”).

Here, the appellee-initiated rule was returnable at 10:00 A.M. on April 18, 2013. First, the matter was called at or around 10:15 A.M. N.T. (04/18/2013) at 7, 20. The record is clear that appellants, defendants in this matter, were not ready to proceed when the case was called. Id. at 7-10. Therefore, the court allowed appellee, the plaintiff, to move forward with the disposition of the rule. Id. This is proper; the petitioner puts on its case first. The respondent follows.

Second, although Ms. Tarboro was not present in the courtroom when Attorney Gaier testified, it was not court error to proceed. Ms. Tarboro was represented by counsel; there is no rule of court or civil procedure that states that the court must halt proceedings until the party arrives. Third, the record is clear that appellant’s counsel, Attorney Nduka did not raise an objection to the testimony of Attorney Gaier, presumably because he thought Ms. Tarboro would arrive before the conclusion of the hearing. N.T. (04/18/2013) at 10. Testimony received without objection is waived. To the extent that Appellants claim that Attorney Gaier was allowed to testify over their objection, the record speaks for itself; there is no objection of record. Id.

Fourth, and last, the court’s practice is to administer justice in an efficient and fair manner. Had appellants requested more time at the beginning of the hearing, the court would have heard other cases and. recalled the instant case. N.T. (04/08/2013). The court’s policy is not to proceed in a “got-cha” manner aimed at being harsh to litigants. However, the court will not litigate on behalf of parties, and expects counsel to conduct themselves in a professional manner. The record supports the court’s observation that Attorney Nduka may have been unprepared in respect to the necessity of Ms. Tarboro’s testify to refute that of former counsel Attorney Gaier. N.T. (04/08/2013). There’s no other reason to claim court error for not notifying appellants that Attorney Gaier would testify. This claim is without merit.

4. Did the court err in allowing appellant’s former counsel Attorney Gaier to testify about the circumstances of the settlement agreement, even though Attorney Nduka did not formally object to the questions put forth to Attorney Gaier?

It is well settled that where a party fails to object to evidence, the party waives any claims to error on the admission of evidence on appeal. Hong v. Pelagatti, 765 A.2d 1117, 1123 (Pa. Super. 2000). Here, despite averments to the contrary, Appellants did not object to Attorney Gaier’s testimony. There is no ruling on the record regarding Attorney Gaier’s testimony. Instead, appellee questioned Attorney Gaier and then appellants, through counsel Attorney Nduka, cross-examined Attorney Gaier about the circumstances leading up to the settlement agreement. N.T. (04/18/2013) at 9-10; 16-19. The court found Attorney Gaier’s testimony to be credible. The claim that the court somehow erred in allowing Attorney Gaier to testify is without merit; Appellants waived any such error by not objecting to the testimony.

5. Did the court err in allowing Attorney Gaier to testify to matters allegedly protected by the attorney-client privilege?

In regard to settlement agreements, it is well settled that “[t]he enforceability of settlement agreements is determined according to principles of contract law. ” Ragnar Benson, Inc. v. Hempfield Tp. Mun. Authority, 916 A.2d 1183, 1188 (Pa. Super. 2007), citing Kramer v. Schaeffer, 751 A.2d 241, 245 (Pa. Super. 2000). Furthermore,” ‘ [w]here the parties, without any fraud or mistake, have deliberately put their engagements in writing, the law declares the writing to be not only the best, but the only, evidence of their agreement.... [U]nless fraud, accident or mistake be averred, the writing constitutes the agreement between the parties, and its terms and agreements cannot be added to nor subtracted from by parol evidence.’” Id. (quoting Yocca v. Pittsburgh Steelers Sports, Inc., 854 A.2d 425 (Pa. 2004). It follows, where fraud is averred, as here, the writing does not constitute the agreement between the parties and parol evidence is allowed.

In regard to attorney-client privilege, pursuant to the Pennsylvania Rules of Professional Conduct governing the confidentiality of information:

(a) A lawyer shall not reveal information relating to representation of a client unless the client gives informed consent, except for disclosures that are impliedly authorized in order to carry out the representation, and except as stated in paragraphs (b) and (c).
(b) A lawyer shall reveal such information if necessary to comply with the duties stated in Rule 3:3. [“Candor Toward the Tribunal”]
***
(c) A lawyer may reveal such information to the extent that the lawyer reasonably believes necessary:
(4) to establish a claim or defense on behalf of the lawyer in a controversy between the lawyer and the client, to establish a defense to a criminal charge or civil claim or disciplinaiy proceeding against the lawyer based upon conduct in which the client was involved, or to respond to allegations in any proceeding concerning the lawyer’s representation of the client;

Pa. Rules of Prof. Conduct 1.6 (commenting at [5] that “a lawyer has duties of disclosure to a tribunal under Rule 3.3(a) that may entail disclosure of information related to the representation”)(emphasis added). At the same time, “[i]n a civil matter counsel shall not be competent or permitted to testify to confidential communications made to him by his client, nor shall the client be compelled to disclose the same, unless in either case this privilege is waived upon the trial by the client.” 42 Pa. C.S. §5928.

To start, the record is clear that appellants do not contest the fact that they entered into a settlement agreement. To be clear, appellants, in their own motion for reconsideration, essentially asked the court to rescind the settlement agreement by granting appellants leave to return the fifteen thousand dollar ($15,000.00) check. Mot. for reconsideration (04/25/2013). Instead, appellants are claiming fraud, specifically that they were defrauded and duped into signing the contested settlement agreement by Attorney Gaier. Ans. (Mot/pet. filed (04/16/2013); N.T. (04/18/2013) at 6, 8, 16-19. Normally, the court would accept the terms to the settlement agreement as fully integrated; however, due to appellants’ allegation of fraud, the court determined that the testimony of Attorney Gaier was necessary to resolve the motion to enforce settlement. N.T. (04/18/2013) at 6-10.

Second, in allowing testimony about the allegation of fraud, the court did not elicit, nor allow Attorney Gaier to breach the attorney-client privilege. N.T. (04/18/2013) at 10-11). Indeed, Attorney Gaier only testified to what he said in the deposition/settlement discussions and what happened between him and appellee’s counsel. Id.

Third, the record is clear that Ms. Tarboro, Attorney Gaier and appellee’s attorney were physically present, while Mr. Tarboro was present at some point in the discussion via phone. Id. at 10-15. To the extent that Attorney Gaier may have disclosed confidential information concerning the reasons why appellants were engaging in settlement discussions, confidentiality was waived by Ms. Tarboro’s presence along with opposing counsel during the settlement negotiations. The fact that Attorney Gaier testified as to what was said at settlement at the Rule hearing is not a breach of the attorney-client privilege.

Fourth, Attorney Gaier testified at the rule hearing in response to allegations that he defrauded and duped Appellants, which is an exception to the rule of professional conduct governing confidential communication. Pa. Rules of Prof. Conduct 1.6 (c)(4). Ultimately, the court, sitting as the fact-finder, found Attorney Gaier credible and ruled in favor of appellees. Pa.R.C.P. 1038 (“Trial without Jury”).

6. The court concluded its rule returnable hearing in thirty minutes; ten minutes later, the court entered an order granting appellee’s motion to enforce settlement and denying appellant’s motion to enforce settlement. Did the court err in making its ruling too quickly?

Pursuant to the Pennsylvania Code of Judicial Conduct, “judges should dispose promptly of the business of the court.” Pa. Code of Judicial Conduct Canon 3(A)(5). There is no prohibition against acting promptly, unless, perhaps where a court enters a ruling prior to calling the case for a scheduled hearing. Here, appellants claim that the court erred in issuing its ruling too quickly. Ms. Tarboro was not present when the rule hearing commenced; Ms. Tarboro was not present at the conclusion of the rule hearing, wherein the court stated it would take the matter “under advisement.” N.T. (04/18/2013) at 6-7, 19. Ms. Tarboro showed up after the Rule hearing and after her counsel and all parties left City Hall. Id. at 19-21. Clearly, the court took the matter under advisement and issued its ruling on the underlying Motions to Enforce Settlement between the conclusion of the Rule hearing and Ms. Tarboro’s arrival. Id. at 19; 1925(b) Statement. This court prepares for all of its hearings prior to the hearing date; the Court reviewed all documentation properly and timely submitted to the court. This includes Ms. Tarboro’s five (5) page affidavit, filed two (2) days before the scheduled hearing. Ans. filed (04/16/2013). Simply put, the court took the motion to enforce settlement, the answer, affidavit and hearing into consideration in ruling on the motion to enforce settlement. There is no court error for making a swift determination.

III. CONCLUSION

Appellants did not comply with Pa.R.A.P. 1925(b); therefore, their claims on appeal are waived. Second, the court notes that appellants did not raise any error in the actual disposition of the underlying motion; therefore, any claims of error related to the court’s granting of appellee’s motion to enforce settlement are waived. Third, to the extent that appellants’ claim error in the manner in which the court presided over the attendant rule to show cause hearing on appellee’s motion enforce settlement, these claims are without error. The court presided over a rule hearing where appellants claimed that their previous attorney committed fraud during settlement negotiations. The court took testimony as to the fraud allegations and ruled accordingly. The court’s ruling should stand.

      . The Philadelphia County Court of Common Pleas links motions and answers by the control number within the electronic filing system. Where a litigant fails to file an answer to a motion, that motion is considered “uncontested.”

      . This policy goes for both sides. The court ordered appellee’s counsel in this matter to refrain from seeking to engage the court and court staff in ex parte communications. Order entered by J. Tucker (04/30/2013).

      . The court is not in any way making a determination that Attorney Gaier breached the attorney-client privilege.

      . The court notes that the settlement and release agreement contains a confidentially clause. Mot for reconsideration (03/25/2013). However, since fraud is asserted in this matter, and since appellee called Attorney Gaier to testify without objection, confidentially is waived.


author: RIZZO, J.,

text:
    Vandelay Holdings, LLC v. Jackson

      August 2, 2013

      Walter S. Zimolong, III and Jessica Walker, for appellant

      Alfonso G. Madrid, for appellee
   RIZZO, J.,

— The appellant, Vandelay Holdings, LLC (“Vandelay Holdings”) appeals from the court’s order of June 14, 2013, denying appellant’s requested post-trial relief from the court’s findings of fact and conclusions of law issued on April 1, 2013, in which the court found in favor of the appellee, Dwight Jackson, and against appellant Vandelay Holdings on an ejectment action brought by appellant, and found in favor of the appellee on his counterclaim quiet title action against Vandelay Holdings.

FACTS AND PROCEDURAL HISTORY

Plaintiff and counter-claim defendant, Vandelay Holdings, commenced this action on August 21, 2009, against defendant and cross-claim/counter-claim plaintiff Dwight Jackson. Jackson joined cross-claim defendants Pamela Carpenter, Steven K. Lloyd, and James Melasecca as additional defendants on November 16, 2009. These claims arise out of an action to eject Jackson from the premises at 2028 N. 15th St., Philadelphia, PA 19121 (“the property”), where Jackson resides. Jackson instituted a counterclaim against Vandelay Holdings to quiet title to the property and alleging both conspiracy to commit fraud/theft by deception and unfair or deceptive practices. Jackson also asserted cross-claims against additional defendants Carpenter, Lloyd, and Melasecca for conspiring to commit fraud/theft by deception with Vandelay Holdings.

On October 11, 2011, cross-claim defendants Lloyd and Melasecca filed a motion for summary judgment, which was denied on December 22, 2011.

A bench trial commenced on February 13, 2012, and on April 1, 2013, this court found in favor of the appellee, Dwight Jackson, and against the appellant, Vandelay Holdings, on appellant’s action for ejectment. The court also found in favor of Jackson on his counter-claim to quiet title, making him the lawful legal owner of the property.

The court found in favor of cross-claim defendants Lloyd and Melasecca and against cross-claim plaintiff Jackson on all counts of Jackson’s amended joinder complaint. The court found against cross-claim defendant Pamela Carpenter pursuant to Pennsylvania Rules of Civil Procedure 218 — Party Not Ready When Case is Called for Trial. The court also found in favor of counter-claim defendant Vandelay Holdings and against counter-claim plaintiff Jackson as to Jackson’s claims of conspiracy to commit fraud/theft by deception and for unfair or deceptive practices.

The plaintiff Vandelay Holdings subsequently filed a timely motion for post-trial relief on April 11, 2013. Following oral argument on May 31, 2013, this court denied said motion on June 14, 2013. Appellant then filed the instant appeal on June 18, 2013. On June 20, 2013, this court requested a statement of matters complained of on appeal in accordance with Rule 1925(b) of the Pennsylvania Rules of Appellate Procedure. On June 26, 2013, Appellant submitted eight issues for appeal that are summarized below into two categories.

The facts of the case are as follows:

The instant dispute concerns two parties who each claim to have legal ownership of the property. Vandelay Holdings, a Pennsylvania registered limited liability company doing business in real estate development, claims ownership through purchasing the property from Pamela Carpenter on August 6,2009, for $22,500.00. (Am. compl. ¶4; pl.’s ex. 1.). The deed conveying the property to “Vandelay Holdings, LLC” is dated the same and was duly recorded in the Office for the Recorder of Deeds of Philadelphia County on or about August 10, 2009. (Id.)

Seventeen years prior, however, on or about July 2, 1992, Dwight Jackson bought the property from Carpenter for $1,000.00. (Second am. answer to the compl. (“Am. Answer”) ¶¶19, 21.) Jackson received a deed to the property from Carpenter, (Pl.’s ex. 6), which was produced at trial, though never recorded. (Am. Answer ¶22.) Jackson paid Carpenter in installments over the course of five months. (Trial tr. vol. 1, 165:4-167:3, February 14, 2012.) Jackson also produced at trial five separate receipts for his transactions with Carpenter. (Jackson Ex. 8.) Four are signed by Jackson and Carpenter; one is signed by Jackson and Carpenter’s alleged husband. (Id.)

Carpenter was operating under letters of administration issued to her from the estate of Dorothy Jones, her deceased mother. (Am. Answer ¶20.) Carpenter failed to appear for any proceedings in the instant case and her attorney has been unable to get into contact with her.

Under Carpenter’s ownership, the property was in a state of extraordinary disrepair, was a known eyesore in the community, (Trial tr. vol. 1, 86:11), and was inhabited by drug users and known as a “hit house”. (Id. at 105:6-18.) Prior to living in the property, Jackson made improvements to render the dilapidated property habitable and was seen in the property on multiple occasions. (Id. at 97:18-23, 104:18-24.) Jackson testified that because drug users had inhabited the property, he had to clean each room of the house individually. (Id. at 168:18-20, 169:11-15.) The property was therefore not fit for immediate occupation. (Id. at 168:21-169:2.)

Jackson and his late wife, Marilyn Miller-Thompson, began living in the property in 1996. (Am. answer ¶23.) Jackson has continually resided there from 1996 until the time of this trial. (Am. answer ¶24.) Over the years, the City of Philadelphia sent property tax bills in the name of the late Dorothy Jones to the property, notwithstanding Jackson’s presence in the property. (Trial tr. vol. 1, 69:10-16.) Jackson has paid these bills consistently, (Am. answer ¶26), but never alerted the city that he was the owner of the property. (Trial tr. vol. 1, 69:21-25.) Though Jackson does have electric service to the property provided by PECO, (Id. at 73:8-14), he has been inconsistent in payment for water services from the City of Philadelphia. Even though he has used water and sewage at the property since at least 1996, he did not receive a bill until 2009. (Id. at 70:7-73:4.)

Jackson’s open possession is evidenced by the series of improvements made to the property. Jackson produced two witnesses at trial attesting to the improvements rendered by him to the property, the condition of the property at the time he alleges to have purchased the property, and his long-standing residence of the property. Said witnesses were Estelle Wilson, a longtime neighbor of Jackson and the local block captain, (Id. at 85:8-22), and Vera Moore, whose house is directly across the street from the property. (Id. at 103:14-16.) Both Wilson and Moore have lived in their respective properties for over 65 years. (Id. at 82:21-23, 104:13-14.)

Wilson testified that she has known Jackson for more than 16 years. (Id. at 85:20-22.) Prior to Jackson residing there, trash covered the abandoned Property, it was missing windows, and it was in a general state of disrepair. (Id. at 86:7-12, 87:2-88:10.) She testified that Jackson put new windows in himself, (Id. at 87:11-19), that the windows contained curtains, (Id. at 92:10-19), and that these windows and dressings were present at the time of the filing of this lawsuit and in 2009. (Id. at 89:1-9,92:10-19.) She also testified that the front door was present in 2009. (Id. at 91:25-92:6.) Wilson stated that Jackson “worked hard” on the house, (Id. at 96:14-17), that he kept the property clean, and that he participated in neighborhood events such as clean-ups. (Id. at 98:2-9.)

Moore testified that she met Jackson roughly 17 to 18 years ago, when he took control of the property. (Id. at 104:15-17.) Moore explained that the property was “a mess” when Jackson began appearing at it and fixing it, (Id. at 106:3-10), partially because after Carpenter’s mother vacated the property, it was used by drug users as a place to abuse drugs. (Id. at 105:6-18.) Moore further testified that the property did not look like it does now: the front door was a different color and many windows that were missing or broken had been replaced. (Id. at 106:6-10.) She remembered that Jackson replaced the windows at least 10 years prior to her testimony in 2012. (Id. at 107:16-18.) Moore also explained that the property looked occupied in 2009: she regularly saw Jackson, his wife, his son, and grandson at the property; lights on in the windows; and Jackson cleaning things up around the yard. (Id. at 108:8-12, 109:2-111:4.)

Vandelay Holdings became interested in purchasing the property when a competitor, Cornerstone Properties, could not complete the sale of the property and contacted James Melasecca to buy it instead. (Id. at 55:3-22.) Melasecca, one of the principals of Vandelay Holdings, testified that Cornerstone Properties told him the property was a shell. (Id. at 56:7-10.) At all times relevant hereto, Melasecca and Steven K. Lloyd were members of Vandelay Holdings. Vandelay Holdings simply adopted the terms of the contract that Cornerstone Properties had negotiated with Carpenter. (Id. at 64:7-14.) No evidence was presented at trial that Cornerstone Properties inspected the property or made any investigation as to the condition of the property.

Prior to the closing date with Carpenter, Vandelay Holdings hired Horizon Abstract to perform a title search for the property. (Id. at 36:3-18.) The title report stated that the record owner of the property was Pamela Carpenter, administratrix under the will of Dorothy Jones, and that the last previous transfer of the property occurred in 1948. (Id. at 37:2-13.) The first time a representative of Vandelay Holdings spoke to Carpenter was at the settlement on the closing date of the sale of the property, August 9, 2009. (Id. at 43:2-7.)

Vandelay Holdings’ amended complaint states that, “Prior to purchasing the property, a representative of the plaintiff visited the subject property on several separate occasions and did not see any occupants residing therein.” (Am. compl. ¶6.) Contrary to such allegations, Melasecca testified at trial that he only physically observed the property once (he did not go inside, or try to go inside) and that he had driven by the property. (Trial tr. vol. 1, 38:15-22, 39:1-3.) The amended complaint further states, “Prior to purchasing the property, a representative of the plaintiff visited the subject premises and observed the windows of the first floor replaced with cinderblocks and entrance barricaded shut.” (Am. compl. ¶7.) Testimony at trial, however, supports that although the property’s back windows are cinder-blocked and the rear door boarded up, (Trial tr. vol. 1, 41:5-10), the front of the property has fairly new windows with window dressings, and electric lights can be seen going on and off inside the house. (Id. at 91:1-92:20, 93:14-94:3.) Jackson testified that he bought windows through a program offered by the Church of the Advocate, a local church that gave homeowners the chance to buy windows in bulk. (Id. at 170:23-171:4.) He bought them around 1996 or 1997 and installed them over time. (Id.)

Roughly three or four days after the closing, representatives of Vandelay Holdings visited the property. (Id. at 43:20-44:6.) Melasecca testified that he intended to change the locks. (Id. at 43:24-44:2.) While at the door attempting to gain entry, Jackson, being at home, immediately stuck his head out of the second story window to see what was occurring. (Id. at 44:3-6.) Melasecca stated to Jackson that he was the owner of the property; Jackson disputed this and stated that he, in fact, was the owner. (Id. at 45:4-10.)

Melasecca had no keys to the property because Carpenter had no keys to provide to him. (Id. at 159:5-8.) He testified that he had asked Carpenter if she had any belongings or personal things in the property, and that she had told him no. (Id. at 159:9-17.) He did not ask if anyone was living in the property, but testified she told him the property was vacant. (Id. at 159:18-23.)

After Melasecca left, Jackson and his wife confronted Carpenter. (Am. answer ¶¶33-5.) Jackson testified that she confirmed she had sold the property to him and that Carpenter claimed she told someone Jackson owned the property. (Id.-, Trial tr. vol. 1,74:12-75:2.) Carpenter never identified the people involved in the sale or to whom she spoke as a representative of Vandelay Holdings. (Trial tr. vol. 1, 74:12-75:2.)

ISSUES ON APPEAL

The matters complained of on appeal are summarized below.

1. The trial court committed an error of law by finding against appellant in the action for ejectment and in favor of appellee to quiet title.
a. The trial, court committed an error of law by finding that Vandelay Holdings was not a bona fide purchaser for value.
b. The trial court committed an error of law in not applying the clear and convincing standard to the issue of constructive notice.
2. The trial court abused its discretion by permitting Vera Moore and Estelle Wilson to testify at trial.

LEGAL DISCUSSION

I. THE TRIAL COURT CORRECTLY FOUND AGAINST APPELLANT IN THE ACTION FOR EJECTMENT AND IN FAVOR OF APPELLEE TO QUIET TITLE BECAUSE APPELLANT WAS UNABLE TO ESTABLISH SUPERIOR TITLE TO THAT OF APPELLEE.

An action for ejectment can be maintained by an out-of-possession plaintiff if they have a “right to immediate possession with the concomitant right to demand that the defendant vacate the land.” Plauchak v. Boling, 653 A.2d 671, 674 (Pa.Super. 1995) (citing Grossman v. Hill, 122 A.2d 69, 71 (Pa. 1956)). To succeed at an action for ejectment:

[Pjlaintiff must show title at the commencement of the action and can recover, if at all, only on the strength of his own title, not because of weakness or deficiency of title in the defendant. This rule places upon the plaintiff the burden of proving a prima facie title, which proof is sufficient until a better title is shown in the adverse party.

Hallman v. Turns, 482 A.2d 1284, 1287 (Pa.Super. 1984) (citations omitted).

This same burden shift is applicable to an action to quiet title. See Commonwealth, Pa. Game Comm’n v. Ulrich, 565 A.2d 859, 861 (Pa.Cmwlth. 1988) (quoting Hallman, 482 A.2d at 1287). The plaintiff need only demonstrate title “by a fair preponderance of the evidence.” Poffenberger v. Goldstein, 776 A.2d 1037, 1041 (Pa.Cmwlth. 2001).

In the instant dispute, both parties claim title by way of individual deeds to the property transferred by Pamela Carpenter. Since Jackson never recorded his deed, Vandelay Holdings argued at trial that their deed is protected under the Pennsylvania Recording Statute, 21 Pa.C.S.A. §351 (“Recording Statute”), and thus superior to that of Jackson. In finding that Vandelay Holdings does not have superior title, this court correctly found that Vandelay Holdings is not a bona fide purchaser, and thus not entitled to protection of the Recording Statute. This court also correctly refused to apply the “clear and convincing” standard to the issue of whether Vandelay Holdings had constructive notice of Jackson’s possession because Jackson did not adversely possess the property, but rather had a deed to the property, and the burden of proof to win an action to quiet title is much lower than that of an ejectment action.

A. THE TRIAL COURT CORRECTLY FOUND THAT VANDELAY HOLDINGS IS NOT A BONA FIDE PURCHASER FOR VALUE ENTITLED TO PROTECTION UNDER THE RECORDING STATUTE.

The Recording Statute “protects subsequent purchasers by giving a subsequent bona fide purchaser for value without notice of a prior transaction priority over the equitable estate of the first owner.” Long John Silver’s, Inc. v. Fiore, 386 A.2d 569, 573 (Pa. Super. 1978) (citing Lund v. Heinrich, 189A.2d 581 (Pa. 1963)). A bona fide purchaser is defined as “one who pays valuable consideration, has no notice of outstanding rights of others, and acts in good faith.” Carnegie Natural Gas Co. v. Braddock, 597 A.2d 285, 288 (Pa.Cmwlth. 1991). “Either actual or constructive notice is sufficient to prevent the subsequent purchaser from acquiring the status of a bona fide purchaser.” Long John Silver’s, 386 A.2d at 573 (emphasis added) (citing Ovelryv. Hixson, 82A.2d 573 (Pa.Super. 1951)).

The laws of the Commonwealth of Pennsylvania recognize open and continuous possession of the premises as constructive notice to subsequent purchasers. See Kinch v. Fluke, 166 A.905 (Pa. 1933); Malamed v. Sedelsky, 80 A.2d 853(Pa. 1951). In Kinch v. Fluke, the prior vendor of the property had taken out mortgages on the property after having sold the property via written agreement (unrecorded) to appellants. Upon discovery of the mortgages some years later, appellants brought an action to remove a cloud on the title against the subsequent mortgagees who had placed liens on the property. At the outset of their analysis, the court noted that:

[0]pen, notorious, and continued possession...is evidence of title, and, in a certain sense, is a substitute for recording the agreement of purchase, and is sufficient to put a subsequent purchaser or mortgagee on inquiry. A prospective purchaser is required to make inquiry of those in possession, and, failing to do so, is affected with constructive notice of all that such inquiry would have disclosed.

Id. at 906 (citations omitted). Having never inquired of the appellants, who were in possession, as to the nature of their title, the mortgagees took constructive notice of appellants’ rights. Id.

The court reaffirmed this rule in Malamed v. Sedelsky. In Malamed, a judgment creditor brought an action to quiet title against defendants who, unbeknownst to the plaintiff, had an unrecorded deed at the time of judgment and were in exclusive possession of the property. In denying the plaintiff protection of the Recording Statute, the court held that:

Such possession by the [defendants] was sufficient constructive notice, for it has long been settled that it is the duty of a purchaser of real property to make inquiry respecting the rights of the party in possession and failing to do so they are affected with constructive notice of such facts as would have come his knowledge in the proper discharge of that duty.

80 A.2d at 855 (citations omitted). As such, the Recording Statute did not protect the record titleholder and the court found for defendants. Id.

In the instant case, appellant cites to Pato v. Cernuska, 493 A.2d 758 (Pa.Super. 1985), for the proposition that constructive notice does not defeat a purchaser’s status as a bona fide purchaser for value. (Post-trial mot. of pi. ¶9.) Appellant contends that the court in Pato rejected Malamed's argument. (Post-trial mem. of pi. 4.) To the contrary, however, Malamed is distinguishable: Malamed concerned the effect of constructive notice from possession negating the status of a bona fide purchaser. The issue at hand in Pato, however, was a dispute over the size of a tract of land conveyed in two separate deeds. The deeds incorrectly stated the distance between two monuments on the property. In resolving who had superior title, the question of whether the later-in-time purchaser was a bona fide purchaser was a marginal issue “irrelevant to the issue in this case.” Pato, 493 A.2d at 760. The Pato court actually cites Malamed authoritatively for the position that appellant opposes here: that “it is the duty of a purchaser of real property to make inquiry respecting the rights of the party in possession and failing to do so they are affected with constructive notice of such facts as would have [been disclosed].” Id. at 760 (quoting Malamed, 80 A.2d at 855) (internal quotation marks omitted).

Appellant also disputes the existence of a duty to inquire as to the property interests of those in possession. This rule was recently discussed at the federal level in In re Fowler, 425 B.R. 157 (Bankr. E.D. Pa. 2010). The court there had to determine whether subsequent purchasers/mortgagees were indeed bona fide purchasers for value without notice of plaintiffs’ unrecorded interest in the property. In applying Pennsylvania common law, including Kinch and Malamed, the court noted the long line of Pennsylvania cases that hold:

[A]s part of the duty to exercise ordinary diligence in the purchasing process, a buyer of real property is obliged to ask those in physical possession of property (who are not also the current record titleholders) if they have some title to, or interest in, the occupied property that is adverse to the prospective buyer’s title.

Id. at 198 (emphasis in original). The court held that the subsequent purchasers/mortgagees had a duty to ask those in possession whether they claimed any rights to the property, and, having not discharged that duty, were “charged with notice of facts they would have learned in the proper discharge of that duty.” Id. at 203 (citing Malamed, 80 A.2d at 855).

In the present case, there was no evidence at trial that either Vandelay Holdings or their agents made any inquiry of the appellee concerning his interest in the property. Vandelay Holdings’ amended complaint asserts that Vandelay Holdings made numerous trips to the premises. (Am. compl. ¶6.) At a minimum, Melasecca testified at trial that he personally visited once. (Trial tr. vol. 1,38:15-18.) At no point, however, did Vandelay Holdings contact Jackson before the sale was completed. Both Ms. Wilson and Ms. Moore testified to facts that support the conclusion that Jackson’s possession was open and continuous during this time. Under these facts and the controlling case law, the instant trial court determined that Vandelay Holdings had a duty to inquire of Jackson who was in possession, and that in failing to do so, had constructive notice of Jackson’s claim on the property.

B. THE CLEAR AND CONVINCING STANDARD IS INAPPLICABLE TO A QUIET TITLE ACTION.

As noted above, an action to quiet title “places upon the plaintiff the burden of proving a prima facie title”- by a “preponderance of the evidence.” Poffenberger, 776 A.2d at 1041. Once met, the burden shifts to the opposing party to show superior title. See id. As previously stated, “open, notorious, and continued possession...is evidence of title...and is sufficient to put a subsequent purchaser or mortgagee on inquiry.” Kinch, 166 A. at 906 (citations omitted).

Pennsylvania courts apply a clear and convincing evidentiary standard to claims of property rights acquired through possession. As such, Vandelay Holdings directs the instant court to case law regarding the standard for prescriptive easements and adverse possession, which is inapplicable to the action in this case. The present action involves a counterclaim brought by Jackson to quiet title, in which he is asserting his proper title, not attempting to wrest title from Vandelay Holdings. “Pennsylvania recording laws...do not render invalid an unrecorded interest in land.” Ulrich, 565 A.2d at 862 (Pa.Cmwlth 1989) (citations omitted).

Counsel presented demonstrative photographic evidence at trial showing clear signs of occupancy. (See Jackson’s exs. 1-5.) Witnesses Moore and Wilson verified the accuracy of the demonstrative evidence and testified as to signs of occupancy they observed from their homes, which they testified were in clear view of Jackson’s property. (Trial tr. vol. 1, 83:21-84:4, 103:14-16.) In accordance with case law and the evidence presented, the instant trial court determined that the proper standard by which to judge Jackson’s possession was whether possession was open and continuous, that Jackson met these requirements, and that this put Vandelay Holdings on constructive notice.

II. PERMITTING VERA MOORE AND ESTELLE WILSON TO TESTIFY AT TRIAL IS WITHIN THE DISCRETION OF THE COURT.

Evidence is relevant if it tends to “make the existence of any fact that is of consequence to the determination of the action more probable or less probable than it would be without the evidence.” Pa.R.E. 401. Competency is similarly set at a low bar: “Every person is competent to be a witness except as otherwise provided by statue or in these Rules.” Pa.R.E. 601. Vandelay Holdings cites no statute or rule that disqualifies Moore or Wilson from testifying. In this case, Jackson’s possession of the property is at the crux of the dispute. Both witnesses testified to having resided in clear view of Jackson’s property for over 65 years, and testified as to signs of occupancy that they routinely observed in 2009. Such evidence was clearly relevant to show possession of the property and thus relevant to Vandelay Holdings’ duty to inquire about Jackson’s interest. The appellant’s objection to their testimony is thus unsubstantiated and unwarranted.

CONCLUSION

Appellant had a duty to inspect the premises and to inquire of the person in possession about the state of the title to the property. Appellee was living in open and continuous possession of the property during all relevant periods, but was never approached by appellant or its agents. Appellant thus had constructive notice of appellee’s interest in the property. Therefore, appellant was not a bona fide purchaser for value and was not entitled to the protection of the Recording Statute. As such, appellant was unable to show superior title to that of appellee, and the court found against appellant’s action for ejectment and in favor of appellee’s action to quiet title. Therefore, this court’s denial of appellant’s request for post-trial relief, affirming the findings of fact and conclusions of law issued on April 1, 2013, should be upheld.

STATEMENT OF ERRORS COMPLAINED OF ON APPEAL

Appellant, Vandelay Holdings, LLC (“Vandelay”), by and through its counsel, files the following concise statement of errors complaint of on appeal in the above matter, and avers as follows:

1. Whether the trial court erred in finding that Vandelay was not a bona fide purchaser for value of the property located at 2028 North 15th Street, Philadelphia, PA 19121 (the “Property”).
2. Whether the trial court erred in finding that Vandelay was not entitled to the protections of 21 Pa.C.S.A §351 (the “Recording Statute”).
3. Whether the trial court erred in finding that actual possession of a property is construction notice that defeats a purchaser’s bona fide purchaser for value status, even when there is no evidence that the purchaser had actual notice of the possession.
4. Whether the trial court erred in finding that Vandelay had an affirmative duty to inspect the Property to assure that it was unoccupied in addition to reviewing the chain of title to the Property.
5. Whether the trial court erred in failing to apply the clear and convincing standard to the issue of whether Vandelay had constructive notice of Jackson’s actual possession of the Property.
5. Whether the trial court erred in finding against Vandelay and in favor of Dwight Jackson (“Jackson”) on Jackson’s claim to quiet title.
4. Whether the trial court erred in finding against Vandelay and in favor of Jackson on Vandelay’s claim for ejectment?
5. Whether the trial court abused its discretion in permitting Vera Moore and Estelle Wilson to testify at trial.

      . The original caption named “Dwight Jackson and all Occupants” as defendants. The only other occupant was Jackson’s wife, Marilyn Miller-Thompson. Counsel for Jackson filed a suggestion of death for Ms. Miller-Thompson on February 11, 2012.

      . Cross-claim defendant Pamela Carpenter never appeared at trial. Pursuant to section (c), this court found that Carpenter was not ready without satisfactory excuse and entered a nonsuit judgment against her. See Bostick v. Schall’s Brakes and Repairs, Inc., 725 A.2d 1232 (Pa. Super. 1999) (“It is well settled that the mere failure to appear for trial is a ground for the entry of nonsuit.”), reargument denied, appeal denied, 743 A.2d 912.

      . Plaintiff did not file an accompanying memorandum of law as required by this court’s scheduling order dated April 18,2013.

      . This court ordered a statement of matters complained of on appeal pursuant to Pa.R.A.P. 1925(b). This was timely received and is attached hereto as exhibit “A”.

      . An action to remove a cloud on the title was the predecessor to the modern Pennsylvania Rules of Civil Procedure’s action to quiet title. Bruker v. Burgess and Town Council, 102 A.2d 418, 420 (1954) (“The action to quiet title is a new form of action, created as a consolidation of a large number of independent actions and proceedings, mostly statutory, designed to remove clouds on title....”).

      . Subsequent “holders of a judgment” receive the same protection under the Recording Statute as subsequent purchasers and mortgagees. 80 A.2d at 855.


author: PICCIONE, J.,

text:
    Caterpillar Financial Commercial Account Corporation v. East Coast Paving & Seal Coating, Inc.

      August 7, 2013

      Kelly M. Ariosto, for plaintiff

      Jared Diciccio, for defendants
   PICCIONE, J.,

— Before this court for disposition is the plaintiff’s preliminary objections to counterclaim (hereinafter the “preliminary objections”). This current action was commenced on July 30, 2012, when the plaintiff, Caterpillar Financial Commercial Account Corporation, formerly Cat Access Account Corporation (hereinafter, the “plaintiff’), filed the complaint against the defendants, East Coast Paving & Seal Coating Inc. (hereinafter, “defendant East Coast Paving”), and Barbara S. Hasson (hereinafter, “defendant Hasson”) (hereinafter, collectively, the “defendants”). The complaint avers that the plaintiff had provided credit to defendant East Coast Paving to purchase goods, wares, and merchandise from Cleveland Brothers. The complaint also avers that defendant Hasson delivered a guaranty of payment to the plaintiff in order to induce the extension of credit to defendant East Coast Paving. The plaintiff alleges that the defendants failed to make payment on the amount owed and, as a result, breached the contracts of the credit agreement and the guaranty of payment. Copies of the contracts signed by the parties are attached to the complaint.

On September 17, 2012, the defendants filed the answer, in which they deny owing the debt to the plaintiff. Instead, the defendants claim they were led to believe that the debt is owed directly to Cleveland Brothers. As such, the defendants filed the counterclaim against the plaintiff The first two counts of the counterclaim allege fraud against the plaintiff claiming that the plaintiff perpetuated the belief that the debt was owed to Cleveland Brothers. Furthermore, the defendants claim that the plaintiff’s agent, Mr. Tim Mallon (hereinafter, “Mallon”), told the defendants that the debt would be removed due to defects with the merchandise. The defendants assert that they relied on Mallon’s statements. The defendants assert that because of this reliance, the defendants stopped making payments with the belief that they were no longer indebted to the plaintiff. The defendants’ third count in the counterclaim is for declaratory judgment. In this claim, the defendants seek to have the court interpret the contracts to identify which entity the defendants are obligáted to pay.

On April 1, 2013, the plaintiff filed the instant preliminary objections. The first preliminary objection is in the form of a demurrer, objecting to the first count of fraud alleged in the counterclaim. The first preliminary objection asserts that the first count of fraud is legally insufficient pursuant to Pa.R.C.P. 1028(a)(4). The second preliminary objection is in the form of a demurrer. The plaintiff argues that the second count of fraud is legally insufficient under Rule 1028(a)(4). The third preliminary objection alleges that both the first and second counts of fraud are insufficiently pleaded pursuant to Pa.R.C.P. 1019(b). The final preliminary objection is in the form of a demurrer and claims that the request for declaratory judgment is legally insufficient pursuant to Rule 1028(a) (4).

On April 25, 2013, the court ordered oral argument on the matter and ordered both parties to submit briefs in support of their positions. The plaintiff had submitted its brief in support of its preliminary objections, on April 1, 2013. The defendants filed a brief on June 7, 2013. Oral argument was heard before this court on June 24, 2013.

The court begins its examination of the instant preliminary objections by considering the first two preliminary objections. Rule 1028(a)(4) of the Pennsylvania Rules of Civil Procedure provides that preliminary objections in the nature of a demurrer may be raised alleging that a claim is insufficient as a matter of law. Pa.R.C.P. 1028(a)(4). A preliminary objection in the nature of a demurrer is properly granted when the court finds, based on the complaint alone, that there are no legal grounds upon which the claim can stand. Weiley v. Albert Einstein Med. Ctr., 51 A.3d 202, 208 (Pa. Super. 2012). When making this analysis, all statements made in the complaint are taken to be true. Id.

Pennsylvania is a fact pleading jurisdiction, which requires a complaint to be sufficiently specific to permit the defendant notice to defend itself. Youndt v. First Nat. Bank of Port Allegany, 868 A.2d 539, 544 (Pa. Super. 2005) (citing Sevin v. Kelshaw, 611 A.2d 1232, 1235 (Pa. Super. 1992)). The complaint must also summarize the facts essential to support the claim. Id. Fraud must be pleaded with particularity. The pleadings must both “adequately explain the nature of the claim to the opposing party,” and “be sufficient to convince the court that the averments [of fraud] are not merely subterfuge.” Id.

In determining whether the allegation of fraud is pleaded with particularity, the court ought to consider each element of fraud and whether the claimant pleads each element specifically. Id. This does not necessarily mean that the claimant must show actual evidence to support the claim. Maleski by Taylor v. DP Realty Trust, 653 A.2d 54, 65 (Pa. Commw. Ct. 1994). The claimant must provide specific detail as to what facts were misrepresented, what misinformation was given, and how it was “tricked.” Dwyer v. Rothman, 431 A.2d 1035, 1037 (Pa. Super. 1981).

The elements of fraud that the claimant must plead with particularity are as follows: “(1) a misrepresentation; (2) a fraudulent utterance; (3) an intention by the maker that the recipient will thereby be induced to act; (4) justifiable reliance by the recipient upon the misrepresentation; and (5) damage to the recipient as a proximate result.” Weiley v. Albert Einstein Med. Ctr., 51 A.3d 202, 208 (Pa. Super. 2012).

In the instant action, the defendants asserts, through their counterclaim, two counts of fraud. In count one of the counterclaim, the defendants allege that the they were misled by the plaintiff into believing that Cleveland Brothers was extending the credit rather than the plaintiff.

As stated above, in order to maintain a claim for fraud, a claimant must first aver that there was a misrepresentation. Id. Upon review of the contract for credit, the court cannot find a misrepresentation. The contract for credit states on the first page, above the signature line, that the plaintiff may provide the credit. Defendant East Coast Paving signed this contract. In addition, the guaranty of payment, signed by defendant Hasson, states that the debt will be paid to the plaintiff if defendant East Coast Paving fails to pay.

The defendants have not alleged that they were “misled,” as to the content of the contracts or “tricked,” into signing the contracts. Although the defendants state that the contracts were made to mislead them, the language on the face of the contracts contradicts this claim. Parties are responsible for reading a contract that they sign. T. W. Phillips Gas & Oil Co. v. Kline, 84 A.2d 301, 302 (1951) (citing Berardini v. Kay, 192 A. 882 (1937); Schoble v. Schoble, 37 A.2d 604 (1944); Silberman v. Crane, 44 A.2d 598, 599 (Pa. Super. 1945)). Failure to read a contract does not give rise to a cause of action for fraud. Id. As such, the court cannot find that the plaintiff has misrepresented itself because the defendants failed to examine thoroughly the contracts that they signed. Because the defendant failed to satisfy this element, the court need not further analyze the sufficiency of the first count of fraud. Therefore, the plaintiff’s first preliminary objection to the counterclaim is hereby sustained.

The plaintiff, in its next two preliminary objections, argues that the second count of fraud is legally insufficient pursuant to Pa.R.C.P. 1028(a)(4). The defendants aver that Mallon told the defendants that the charges for the defective merchandise, totaling $20,020.00, would be “taken care of.” The defendants claim that Mallon’s promise was either fraudulent or made recklessly. When deciding preliminary objections, the court must accept the claims of the non-moving party to be true. Therefore, the court must consider whether the defendants’ allegations satisfy the standard of pleading proscribed by Rule 1028(a)(4).

The first two elements that the defendant must allege to establish a claim for fraud are a misrepresentation and a fraudulent utterance. Weily, 51 A.3d at 208. The defendants allege that Mallon, as an agent of the plaintiff, made a misrepresentation to the defendants by informing them that the defendants’ debt owed to the plaintiff would be removed from the account. Therefore, the defendants have specifically alleged a misrepresentation and a fraudulent utterance.

Next, the defendant must allege an intention by the maker that the recipient will be induced to act. Id. For the purposes of surviving a preliminary objection, the complaint must only aver that a material misrepresentation of fact was made and that the maker intended to make the misrepresentation. Borelli v. Barthel, 211 A.2d 11, 13 (Pa. Super. 1965). The defendants avers both factors in the counterclaim by alleging that Mallon told the defendants that Mallon would “take care of’ the debt and that he said this fraudulently. Therefore, the third factor is sufficiently pleaded.

The defendants must also allege that they reasonably relied on the misrepresentation. Weily, 51 A.3d at 208. At several points in the answer, the defendants state that they stopped payment on the debt that they owed to the plaintiff due to Mallon’s promise to “take care of’ the debt. Stating this reliance is sufficient to satisfy the pleading standard for the fourth element of fraud.

Finally, the defendants must plead that damages resulted from their reliance on the misrepresentation. Id. The defendants state in the counterclaim that they have been damaged through having to defend a lawsuit and through the plaintiff’s collection efforts, which has damaged the defendants’ credit rating. Therefore, the final element is satisfied. As such, the defendants have sufficiently pleaded each element of a claim for fraud and the plaintiff’s second preliminary objection to the counterclaim is hereby overruled.

The third preliminary objection objects to both count one and count two of the counterclaim, alleging that the defendants have not provided sufficient factual allegations to satisfy the pleading standard of Pa.R.C.P. 1019(b). Rule 1019(b) proscribes that parties must plead fraud with particularity. Pa.R.C.P. 1019(b). In order to satisfy this standard, an allegation of fraud does not need to contain explicit detail of all of the evidence that the claimant plans to present at trial. Estate of Gallagher, 400 A.2d 1312, 1314 (1979). An allegation of fraud is sufficient when the claimant makes claims that specifically state the alleged act of fraud and are more than a mere declaration of fraud. Id.

In the case sub judice, the court need not examine count one as this count has already been dismissed as explained supra. Regarding count two, the court finds that the defendant has sufficiently pleaded this allegation of fraud as required to satisfy Rule 1019. The counterclaim specifically alleges the fraudulent act and the actors involved with the alleged fraud. The defendant does not merely state that fraud has occurred but illustrates the details of the fraud to the court. In the counterclaim, the defendants identify Tim Mallon as an agent of the plaintiff and explain that he informed them that the charges would be “taken care of,” due to defects in the product. This is sufficiently specific to satisfy Rule 1019’s requirements. As such, the plaintiff’s third preliminary objection to the counterclaim is hereby overruled.

Count three of the counterclaim is for declaratory judgment. The defendants request this court to interpret the contracts between the plaintiff and defendants to determine whom the defendants are obligated to pay. In the fourth preliminary objection, the plaintiff argues that the defendants have failed to state a claim for declaratory judgment by failing to show actual controversy.

Declaratory judgment serves as “judicial searchlights switched on at the behest of a litigant to illuminate an existing legal right, status or other relation.” Wagner v. Apollo Gas Co., 582 A.2d 364, 365 (Pa. Super. 1990) (quoting Doe v. Johns-Manville Corp., 471 A.2d 1252, 1254 (Pa. Super. 1984)). Declaratory judgment actions are governed by Pennsylvania’s Declaratory Judgments Act (hereinafter, the “Act”). 42 Pa.C.S.A. §§7531-7541. Specifically, the Act provides that:

Courts of record, within their respective jurisdictions, shall have power to declare rights, status, and other legal relations whether or not further relief is or could be claimed. No action or proceeding shall be open to objection on the ground that a declaratory judgment or decree is prayed for. The declaration may be either affirmative or negative in form and effect and such declarations shall have the force and effect of a final judgment or decree.

42 Pa.C.S.A. §7532.

A party may seek a declaratory judgment in order to declare the legal rights, duties, or status of the parties to an action if such a declaration will assist in the determination of an actual controversy. Warner v. Continental/CNA Ins. Cos., 688 A.2d 177, 180 (Pa. Super. 1996). Furthermore, “where there is a dispute between two parties to a contract as to their rights and obligations under that contract, an appropriate and adequate legal remedy is available under the [Act].” York-Green Assocs. v. Bd. of Supervisors of South Hanover Twp., Dauphin County, 486 A.2d 561, 564 (Pa. Cmwlth. Ct. 1985). A declaratory judgment action may be used to determine the validity and enforceability of contractual provisions. See Southeastern Pennsylvania Transp. Auth. v. Philadelphia Transp. Co., 24 A.2d 632, 633 (Pa. 1965). The Act also provides that á contract may be construed either before or after a breach has occurred. 42 Pa.C.S.A. §7534.

The remedy of declaratory judgment as provided by the Act is “additional and cumulative to all other remedies” and does not eliminate other forms of relief. 42 Pa.C.S.A. §7541(b). The Act also explains that “[wjhere another remedy is available the election of the declaratory judgment remedy rather than another available remedy shall not affect the substantive rights of the parties[.]” Id.

In the instant case, there is a dispute between two parties to a contract. One party is seeking clarification of its rights and obligations under the contract that is the subject to the dispute. As such, the court finds that the defendants have stated a claim upon which declaratory judgment can be granted. Therefore, the plaintiff’s fourth preliminary objection to the counterclaim is hereby overruled.

Based on the foregoing, the plaintiff’s preliminary objections to the counterclaim are hereby sustained in part and overruled in part.

ORDER OF COURT

And now, this 7th day of August, 2013, this matter being before the court on June 24,2013, for oral argument regarding the plaintiff’s preliminary objections to counterclaim with Kelly M. Ariosto, Esquire, appearing and representing the plaintiff, and Jared Diciccio, Esquire, appearing and representing the defendants, and after a complete and thorough review of the arguments presented and submitted by counsel, the court orders and decrees as follows:

1. The plaintiff’s first preliminary objection in the form of a demurrer to count one of the counterclaim for legal insufficiency pursuant to 1028(a)(4) is hereby sustained, pursuant to the attached opinion.

2. Count one as contained in the defendant’s counterclaim is hereby dismissed, pursuant to the attached opinion.

3. The plaintiff’s second preliminary objection in the form of a demurrer to count two of the counterclaim for legal insufficiency pursuant to 1028(a)(4) is hereby overruled, pursuant to the attached opinion.

4. The plaintiff’s third preliminary objection in the form of a demurrer to count two of the counterclaim for legal insufficiency pursuant to 1019(b) is hereby overruled, pursuant to the attached opinion.

5. The plaintiff’s fourth preliminary objection in the form of a demurrer to count three of the counterclaim for legal insufficiency pursuant to 1028(a)(4) is hereby overruled, pursuant to the attached opinion.

6. 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 his last known address as contained in the court’s file.