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HomeMy WebLinkAbout05-6725 QUALITY BUILDERS WARRANTY CORPORATION, IN THE COURT OF COMMON PLEAS CUMBERLAND COUNTY, PENNSYLVANIA Plaintiff v. CIVIL ACTION NORTH AMERICAN DEVELOPMENT CORPORATION DOCKET NO. 05, &,7d-5 t!co-J Defendant NOTICE YOU HAVE BEEN SUED IN COURT. If you wish to deft:nd against the claims set forth in the following pages, you must take action within twenty (20) days after this Complaint and Notice are served, by entering a written appearance personally or by attorney and filing in writing with the Court your defenses or objections to the claims set forth against you. You are warned that if you fail to do so the case may proceed without you and a judgment may be entered against you by the Court without further notice for any money claimed in the Complaint or for any other claim or relief requested by the Plaintiff. You may lose money or property or other rights important to you. YOU SHOULD TAKE THIS PAPER TO YOUR LA WYER AT ONCE. IF YOU DO NOT HAVE A LAWYER OR CANNOT AFFORD ONE, GO TO OR TELEPHONE THE OFFICE SET FORTH BELOW TO FIND OUT WHERE YOU CAN GET LEGAL HELP. CUMBERLAND COUNTY BAR ASSOCIATION 32 South Bedford St. Carlisle, P A 17013 (717) 249-3166 QUALITY BUILDERS WARRANTY CORPORATION, : IN THE COURT OF COMMON PLEAS : CUMBERLAND COUNTY, : PENNSYLVANIA Plaintiff vs. CIVIL ACTION NORTH AMERICAN DEVELOPMENT CORPORATION, : /i "/'~ : DOCKET NO. 05'- t 7:1) WVcA Defendant COMPLAINT AND NOW, this 20th day of December, 2005 comes the Plaintiff, Quality Builders Warranty Corporation (QBW) and files the within Complaint against the above-named Defendant and avers in support hereof the following: I. Plaintiff is Quality Builders Warranty Corporation, a Pemlsylvania corporation engaged in the T en-Year New Home Warranty business with its principal place of business situate at 325 North Second Street, Wormleysbmg, Cumberland County, Pennsylvania, 17043. 2. Defendant is North American Development Corporation (Builder) is a Tennessee corporation engaged in the new home building business with its principal place of business situate at 7325 Oak Ridge Highway, Knoxville, Tennessee, 37931. 3. On April 15, 2003, Builder executed a Builder Agreement in which Builder agreed Become a member in the QBW Ten-Year Limited Warranty Program. A copy of said Agreement is attached hereto incorporated herein and marked as Exhibit "I". 4. In connection with its membership, Builder executed an Amendment to the Builder Agreement dated February 26, 2004 in which Builder agreed to maintain its membership in the QBW Ten-Year Limited Warranty Program for five years to commence on February 26, 2004. A copy of said document is attached hereto incorporated herein and marked as "Exhibit 2". 5. Builder has breached its Agreement with QBW by failing to enroll all homes as required. 6. Section B 1 of the Builder Agreement executed by Builder States, "Builder agrees to enroll in the program every home Builder, Builder's Principals, or any entity under Builders or Builder's Principals common control constructs." (See Exhibit 1). 7. The Builder Agreement states in Section B 5, "If Builder fllils to enroll any eligible homes as required by this Agreement, QBW may seek specific performance or other appropriate relief in legal or equitable proceedings." (See Exhibit 1). 8. Builder's failure to enroll all homes they construct is a violation of the Builder Agreement as amended and QBW seeks to specifically enforce the obligation of the Builder Agreement, as amended to compel Builder to enroll all homes they construct in accordance with QBW's membership requirements for lhe period February 26, 2004 to February 26, 2009. 9. In the alternative, QBW seeks damages from Builder for homes, which the Builder would be required to place warranties on during that period of time, which damages exceed the sum of $25,000. 10. QBW also seeks attorney's fees as authorized by Section B 5 of the Builder Agreement. 11. Jurisdiction is proper in the Pennsylvania courts since Section E 5 of the Builder Agreement indicates, "This Agreement shall be interpreted and enforced in accordance with the laws of the Commonwealth of Pennsylvania. All suits instituted under this Agreement shall be the remainder that is brought in Pennsylvania in a court of competent jurisdiction. Builder hereby consents to the personal jurisdiction of the Pennsylvania courts. WHEREFORE, Plaintiff, Quality Builders Warranty Corporation, demands judgement against North American Development Corporation as follows: 1. That the Builder Agreement as amended executed by Defendant, North American Development Corporation be specifically enforced to require Defendant to enroll all homes they construct for the period February 26, 2004 to February 26, 2009 in accordance with the Builder Agreement as amended. 2. In the alternative, that Defendant be ordered to pay damages to warranty fees which QBW was entitled to based on homes projected for the period February 26, 2004 to February 26, 2009, said amounts to be in excess of $25,000. 3. Attorney's fees as authorized by Section B 5 of the Builder Agreement for such other relief as deemed appropriate by the Court. Respectfully Submitted, John . Gill, Esq. Attorney #41532 Counsel for the Plaintiff Quality Builders Warranty Corporation 325 North Second Street Wormleysburg, PA 17043 Ma~ 02 03 02:22p . NRDC 865531 ClU::1'I p.b JU,i-17-2002 11:55 ~ ~ /L' /JPT-2/l- 2 03 AGREEMENT made this .;;; day of . 0 betWeen QUAUn- BUILDeRS WARRANTY CORPORATION, a Pennsytvanill corparaUon. herein referred to as "CBW.' and N(J/2mH/v)b~'c"")) lJi:r//HoP/'1Ilt<!)r axP;J'~flj7();J, , N3rnatlfBu1dat;(IrIl;Ii~~".A_...._..~;p.mdMdualOl'QlI'let1 .01' ~IT\' BUILlJERS WARRAN1Y 717 7TI 42S8 P.06/10 BUILDEAAGREEMENT .- '1J~'5 rPMt /ZIMe I{W, . Kmx.v",Ut- ,TJ./. 3rt.3.J ...... lip herein refer:rwW to as "Builder: SECTION A. MEMBERSHIP AND 'flRM: . 1. aBW administers a program whemby home builders registered with OBW enroll homes they construct in the program and PUrchas&1S of those homes are protected by a wallWl\y against certain specified defects. . 2. In oreier to develop and maintain a gOOd reputation fQr PIOVil11ng protecllon to purct>asers of wel!-built homes. oaw ptO/ects and promotes ilS goocHNill by eanaful selection ot builders to participate in its wananty program, . , . 3. Builder desires ID par1lclpale in CBW's warranty program and. 10 that end. 9i~"'es to abide by the proViSionS of tIllS Agreement and to conrorm its hehavior to the standards expressed herein and In the Umited Warranly Agreernl!nt. BuikJer warrants thai all in!llm1a1ion supplied Ia QBW in connection with its application is tn.Ie and correct 4. All r"9ls/ral:lon fees (inillsl and annuall9screening) are set by QBW at its discretion and are non-refundable. . 5. QBW, upon eXeo.Jting this Agreemen~ has accepted Bo11der as a member of its Wl1ITaI1ly program, subject 10 the Builder's continuing performaru::e, of its obUgal!on under this Agreement 6. Builder's membetShip shall commence on the date of Execution by oaw and sh,ill continue until terminated by either party in accordanCe with ltIe !eons of this agreement. CBW reserves me rlgllt 10 rescreen BuildBrllfuwa!ly. If OBW dB1e\'mines ltIal Bu~dBr dc"" not meet its approval standards upon rescreening lIlen QBW may terminale Builder's membership and 1he provisions of Section B, paragraph 6, shall be in effect. .~ SECTION B. HOME ENROLlMENT: 1. R8quir~m..nts. As pwt of its participal:lon in OBWs warranty program, subject 10 OBW's aa:eplance, Buijder agrees to enroll in lIle program every home, BuDder, Builder's PrincipalS, or any entity under Bullder's, or Builder's Principals common control constructs in any state in which QBW DI>llrates and agrees to pay all fees rnquired by CBW in the enrollment process. which fees shall ba non-reIUndable, 2. Procedures. Builder agrees to enroll its homes according to procedures estalIlished by CBW. Bullder may enroB homes curmnlly under construction and homes completGd but not sold or occtJpied (as Ilf the dale of this Agreement or the date 01 l1lacceptance follOWing iI period Of suspension or non-partiCip8lion) provfded thai enroRment is made within 40 days of exe- culiOn of lI1rsAgreement or reacceptance, and OBW has inspected and approved the home. Hom9S which remain in a BUildar's inventory looger tIlan 18 months must be enrolled by /he end of the 19th month from OOl1structlon start date to qualify for enrollment The warranty will he issued to the Builder and !he unexpired por/ion of me warranty win autOmatically transfer to the purchaser. Wilen enrolfing other 1hat\ a detaohed single family dweIlilg, Builder shall enr-on each lncflVidual unn of any multiunit clWeIling such as !Jut 1101 fimiled In duplexes, townltouses and condominiums. For eacll home enrolled, the Builder shall pay a warranty file as determi~1l!d by QBW within !tie time periods estall- lished by Caw. All warranty fees ate non-refundable. A minimum wananty fee elf $100.00 sItaiI apply, CBW will provide 8<Jilder with a ""py or the limited Warranty Agreement ,and Enrollment fonn. Builder llnd purcIlaser must complete and sign the EnrolJment Form at doSing, and Builder agree:> to fumish aBW with a copy of !tie signed EnroUmentklrm within ten (10) days of closing. Builder agreG$11Ol to charge the purchaser directly lor \t1e oosr a/the enroll- ment fee. A home will not be considered enrolled until QBW receivtlS and approves thl! fully executed and completed Enrollment Form, payment of aI/lees, and an approved final inspec:tion. 3. !Iese",_tlan of Power a/ Review. QEJW reserves !hI! right to mj~ any home submitted lor enrollment in tha program if (a) the BuUder il; nat '" member in good standing; (b) the home is not a>l1strucled in acrordance with tile Warranty Standards or building COdes sPeCified in the llmiled Watrllnly Agreement; (c) the BlJllder did nat observe the enrollment procedures; (d) misstates Or misrBprl!Sel1ts any information; Ie) in any way faiJs to comply ~,I\h lIIe terms of this Agreement. 4. Assignment af Rights. If a p(lrchaser flies " Complaint pursuant to the limited Warrarctt I'9reement which the Sullder failS to oorrect. tile Builder hereby assigns to aaw or Its Insurer, as the case may be. any rights Which Builder may have against a supplier, manufl!clurer. subcontradot or other )l<ltso[l for work performed or materials supplied in connection with that claim, BuildQr agrees to cooperalq futly with QBW and to provide caw With an information which 1\ requestS pertllining to the Claim. II BUilder fails to so cooperate, Builder agrees 10 compensate and Incll!mnify cew tor any damages sustained by such lack of ooopemtion. s. emld\ and Remedy. If BCl~der failS to enroll any eligible home as required by this Agreement, CBW may seek specfflc enforcemenf or other appropriate relief in legal or equitable proceedings, even if !/lis Agreement has been terminated. EXHIBIT #l "C:::1 U~ U;,j U~:24p NH,UL: t:Jb::)::J.:J!..::JU;;J I ,.. , JUoI-1?-2002 11'55 QUALITY BUIlDERS iJARRANTY 717 7374288 p.ffl/1e Furthermore, Builder agrnes 10 indemnify and holll harmleSS QaW and its insurer for any losses or any <lamages mey m..y suffer a~ a result of Buijder's breach of this Agreemerrt and such losses and costs sllalllnelude rnasvnable atlomey's fees and expert witness fees. . Builder hereby irrevocably authorizaS 61ld empowen; any attorney or any court of rneorcl of Pennsylvarua or elsewhere to appeat for and confess judgment against Builder fer all amounts for which Builder .may becOme l1able to aaw for the breach of this Agreement, as evidenced by an mtidavlt signed by an officer of QBW setling forth me amoonts then due, plus attomey's tees incurred by OBW, with CO$\$ of suit and release of errors. Such authority shall not be exhausted by any one exercise therQof but judgmerrt rJlay be confessed as aforesaid from time III time B& often as there IS a default Remedl&$ stated hetein are elective and nol exclusive and oaw may elect tel proceed under Ihis or any otlter para- graph in lI'I~ Agreement . . .' , 6. Suspen5iOr'l or Termination. QBW may terminate, or at Its option. suspend BUilder's partlcipation 1M caw s Warranty Program. or any entity or individuaJ which BUilder is affiliated, if oew determines mat 6uiJder has done any of the follow- ing. which shall be deemed a breach of this Agreement, (a) fails to <Xlmpfy fullY with all provisIOnS of tI1is Agreement: . ' (b) fails to perform any 01 in. obligations under tills Agreemlmt. including, but not limited to, cooperating .n the operation of tile program's informal dispute resolution and artlittatlon procedure; Ie) falls to respond to QBW's nolice of a homeowner's complaint; (d) falls to comply with a decision whi<:h is rendeoed pUrsuant to complaint procecl,ures; (e) fails to provide adequate assuranca to aaw within ten (10) clays after it racenle!l a wrillen request from aaw for such assurance that (within a reasonable Umetable established or approved by Qaw) il is willing and able to cooperat4 in dispute setllemeot and to perfOrm the obligations under any decision which Is rendered pursuant to such p~ures: (f) fails to otherwise cooperate in the operation 01 the aaw Program in accordance with 100 rules and regUlations of the caw Program; (g) 1a1ls to pt'OYide timely proof of ccnrpnllllCe wilh this Agreement. as and when ~equesled by QSW: (h) lails to complY with QBW Warranty StanOards end building codes :as stated in the limited Warranty Agreement; (il fails to oomply with the enroUment procedures established by QBW; (J) !ails to plOYide proof thai I>I1lOlIed homes have been SUbjecl8d to requlred inspections; [k) fails to respond to pUJ1:ha5er complaints in a timely manner and as provided in !he Urniled Warranty Agrsement; (I) fails to perform its obfigations with professional aJIl1pElUlnce or conduct its OtJelllltiQl'\$from a position of f'lI18ncial strength and stablnty; (m) fails to noti1y aBW wl1hln 30 days of a change ;n ownership, compan)' name or company sUlnding. financial oondition, or of any oItter matl!rial fact which might affect Builder's l1biUIy to meet its ol:lllgatidns under this Agreement: (n} fails to meet ethical $landllrds in its dealings wilh customers; or (0) misstates or mislepresenlS any information in connection with Its appfication or in lhe ....screening procesS. aBW reserves the option to reinstate terminated affiliates of the primary, tenninated Builder if aBW determines that the terminated Builder or ils principals are not in a position 10 co(drol1he llIfiIiated Builder. Termination of Builder by OBW shall not affect the rights DC obligatlons Q4' any of the parties to !h~ Agreement with respect to tile W8ITanly Program In effect at the date at terminlllion, subject 10 Ihe proYisions pet1ainlng 10 voidabllily. /I a Builder is suspended or terminated. he sIla1l not represent himself to be a member Of Ihe aaw Warranty Program nor olter the caw Warranty ~d shall not use its Logo or refer to the program '" any way nor attampt to enroll any home, The Builder shall immediately n01i1y any Buyer currentiy under contraclto purcl,ase a home of lite suspension Of temt;na- lion and 1t\Q1 the QBW Wananly Program has been withdrawn. Upon request, IBullder snail immediaIely return 10 caw all materials supplied by caW and aJI material making reference to aaw. ShOUld Builder fail to lake these steps, it shall indem. nlfy and hold harmless aBW and the ;nsul'llr against any and all expenses incurred and 101i5e6 sulfel'9d, including but not limited to attorney fees. by either of them as a restllt. In addilion, BuUder st\aIJ pay interest 10 QBW at the rate ol16% per annum on all sum. dUll rc Q8W hereunder it such sums are not pai<l Within 30 days of demand by OSw. Builder ~l' terminate tnis Agreement upon 30 days advance writtlln noIic:e to OBW, It 50 tenninaled by Build,er or by Qaw, SWIder'" obligations ul1<ier this Agreement shall continue as to those homes enroUed during the penod In whiCllthls AgreElment was In eIIect. 7. Notice. If caw possesses a reasonable belief that reason exists to terminate Or suspend a Buikler fOr viQla~on of this Agreemant, Qaw may immediately terminate Of suspend me Buildef by providi1'9 it with written notiCe. If QBW elects to sus- pend !he Builder, such $llSpension will remain in effect until Builder has cure" all de/eels to OBW's satisfaction, hOwever, aaw raseMlS the right to termir1ate any suspended SuUder. 8, ~abil~ OBW reserves the right to void <111)' enroftment if Builder misslates or misrepresen1s any informalion in Its appli- catIOn or In !he rescreening process or misstates or misrepresents any in10mmtian in the enrollment 01 a particular home or ",!,s. to pay any fees d~e for enrOllment of any panll:Ular home or tails to forward an enroilment form lor a particular flome with'" 10 <lays .. requIred, Or falls to emnll all units of a multi unit building. SEcnON C. BUILDER'S OSUGAllOIIIS, 1. Con:!ltluetion Obligations. Following are the Builder's obligations wiflll'llSllect to Q8W's Warranty program: (a) Bu>>def shall construct all homes in conformity with ft1e Wamlnty SIand4rd.~ provided in the Umited Warranty Agreemerrt. and/or in "OIlformlly witl1 approvad building oodes and ohr standarcls e:atablished by QaW ano )n effect at tI1e begin- Ma~ 02 03 02:2Bp, NHUL OO~J,Jo:J .l.:JU,.J, .....- JUN-17-2002 11:56 QUALITY BUILDERS WARRANTY 717 ?3? 4288 P.OO/10 ning ()f construe;tion Of tile en,olled nome, oaw reserves the right to establish special requirements (or escrow pay. ments or other means of protection with re$pect to ~y homes constructed by Bu~der which C8W determlf\es to be "High Risks." ,. , Cb) euilder agrees 10 have all homes f=1:l8cl&d, as required by a8W. atld to pay all fees for the Inspection and to proVIde evidence Of inse>edion as and When requill'd tly QBW, QBW shall provide inspectors or shall approve governmental inspectors. (c) aaw shall have the right to perform spOI inspections 10 verify Builder's compliance with this AgrsQlI1ent and Builder agrees to cooperate. , (a) The Builder agrees to indemnJiy and hold hannleSll QSW andlor its Insurer for llny losses or damages oaw and/or its Insurer may suffer as a result ()f the use of nre Illlard.ant treated plywood on art'V building enrolled un~ the OBW Ten Year Warranty Program. This will inClude all claims and liabifrty for losses, dami1ges and el<pQnsa which caw andlor Its Insurer may sustain, incur. pay or ba nable for by means of any investigation settlement or litigation of any claim or aClion which may be raised, made or broLIght due to !he potential defects caused or 6kely to be caused l)y use of the subject plywood. . (e) If the Builder Is intanned by QSW 1I1at it Is building in an area designated as one with actil,e sO<l condiUCllS, the Builder agrees fa obtain such soils inveSllgatlons and ffiport$ as mal' be required by CIBW. If such It>portS inmllllte a need for special foundation design the Builder agrG&5 to conslTUct the foundation accort:linQ to the design of a registered proles- Sienal engineer to take tolD acc:cunt the conditions disc::losed by tile soil tests. :z. Warranty Obligations. Builder agrees to perform all obligations arising from this Agreement and tile Umited Warrantt Agreement. The 8uii(!er 3I1all at Its own e"Pense perfo"" all obligalions as set tol'lll In the DeW Warranty Program and this Agreement which includes meeting the warranty standards upon no_ from lhe Purchaser withoul the necessity Of OBW intervention. During yelll'll one w1Q two under the asw Warranty Program, If the Builder fajjs or refuse$ to perform its obUgatlons in accordance with the Limited Warranty Agreement or this AgreemQlll, QflW will pe,rfonn the BuDder's obligations, however. the Builder agrees to reimburse QBW andJor Insurer "'" all expenses inCUffl1d in perlonning their obligations, including but not fimited to. cost of materials, cost of collllClion, labor. arohitect's fees, engineering fees and counsel fees. QBW and/or Insurer reserve all rights of subrogation. During years three through ten under the OBW warranty Program, caw witt perform its obligations wIIll ~ect to major StnJdUTaI defects as set forth and defined in tile Umited Warranty Agreetnem wil/lout the nghl of subrogation agalnst lIle Builder provided that the defed, Of S)'lTIptoms of \f1e subsequent occurrence of the detect, first arose after !he expira- tion or two years under the caw Warrant!I Program in elfect "'" that home, and that ElCl~der did o()f attempt 10 conceal or cosmetically repair the deled or symp!Oms of Jhe subsequent oe<:WTence of a ""feet and that the defect does notlllise lIllm Builder's !anure to construct !he home to appficable QSW standanls or adhere to Bu~der's responslbi6ties under the Buillter Agreement. If the Builder repails a major structural detect during years one or two, oaw must be notifiatL Once notified, aaw will perfonn a compliance inspectiOn. 3. Builder is authorb<ed to adVertise Its membership in !he QSW Warranty Program alld to use its logo in its business, pro- vided that any reference to QaW or Its Irl$urer. whelhe' contraclual or ~sing CDJlY. be approved by Q8W In writing in advance at its use. SECTION D. INFORMAL DISPUTE PROCEDURE: 1. Builder shOUld be aware 1fIat th& limited Warranty Agreement provides ror an !monnal aispute setllement and arbitration procedure to resolve complaints by pun::hasers under the Umiled Warranty Agreement. Burra..r Should 1l6<:0me familiar with . the setllemenl procedures in order to be aware of Its rights and rllSpoosibilitie5. Builder agrees to cooperate fuUy in the pro- cedum and to be bound by and to comply with any decision of an irnIependern 1111rd party, or arbitrator. /! !he Builder lails to perform its obligations hereunder in a timely and wor~manh1<8 mlllllJer, sUCh failure shall be ron- sidered 10 be a refusal 10 perform gOVl'/med by paragraph C.2 hereor. 2. The Builder agrees to pay allrees charged in connection with the informal dlsPlne sett1ement and arbitra1lon procedures. SECTION E. TERMS GOVEflNING OPERA nON AND INTeRPRETATION: t. 8uild~r ~rees to perform its obligations under this Agreement in a timely manner. However, time provided for perfonn~ ~f obhgations hereunder shall be extende(\ by events not subject to control by the person obligaled to perform. Such events mClud!' IlClS of G?d, or !he publ,,~ enemy, or riot, civil commotion, or governmerlfaJ conduct. 2. Oes<:nptive headings as to the contents of partlCIJlar provisions Of this Agreemerlt are intended ror conven/enca only and are nOf to be col1$iclered In construing lhis InslTUmenL 3. T11.is Agreement shalJ .not cOfl~titute or be considered an agency, employer-emp10yee "'lationship, joint venture or partner- shIp between the parties. None Of the parties, nor any of their employees or ag<!ttts, shall have the authority to bind or oblig- at.. the ather party except as prOlliCled 1Iy lhis Agreement. 4, ShOuld any provisions of this Agreement De determined by a court 01 competent jurisdiction to be unenforClla.ble, that a.ro.r- mination wiU no! af!eet the "alldlty of the remaining provisions. Ma~ 02 03 02:301', NRDC iH,:)::,:::t 1 :::JU~.I 1'-" JUol-17-2002 1t'S? GlIJAL1TY RJILDERS ~TY 717 '737 42B6 1'.09/113 5. This Agreement shall be interpreted and enforced in accordance with the laws of tlll> Commonwealth of Pennsylvania. All SUitl; Ins1ituted under this Agreement Shall he brought in Pennsylvania in a court of clImpetent jurisdiction. Builder ~e'eby consents to the personal jurisdk:lion 01 the Perv>sylvanfa COurtS. 8. Builder shall not assign this Agraement wittlOtJt the priOr written consent of oaw. 7. ThiS Agreement s~alllnure 10 the benefit of eJ\d ell binding upon the heirs, executc~m. administrators. asslgnee. and sue- c:eSSOIS of the representative partie:;;. a. This instrument. and security docoments and documents referred to Of incorpora~d herein by "'ference. contaln the enlire agreement between the par1ies, and no statemen~ promises, or inducements madsl by either party or agent of either party that is not contained in thiS wr1tlen contract shall be valid or binding; and tllis contracl may not be enlarged. modtfted. or eJtered except in WrlUng signed by the parties and endorsed hereon. 9. Fail~re of either party 10 Insist upon compliance wilh any provtsion of this Agreement shaN not constitute a waiver of ll1at provision. 10, AU notices reQUired hemunder must be in writing and sent by certilied maIl, postage prepaid, return "",..lpl requeste<l, to the re<:ipient at tlle respective aadress shown below. or to wha~ver addreS$ the party may designate In writing. 11, "'e effeCliVe elate 01 this Agreement shall be tlle date Of cJCeGUlion by QBW. " Q~'.nv "'~CO"'<"'A"O' Septernbet' 30 I 2003 o.te of l!Jlecutlon by CBW: BuildlW's Registration No.: 13279 DATE ~ I A BUI1J)ER: _lIlQRill-i j!.\CR.lc"-tJ n~flDl'M~ ('~~O~I'\-TlorJ Afl-I~ ~ ;Z:Z:-~:I- . ~ '1'-"Au_~'1lII') G/e........ Glo.$5,A..."P;:z.,e;'S)D~Ar- '" ( _._.._~ 73!),'5 m;r:: K.t/)~g 1/aJ'1 . ~OXl!tI/'e, z;:{. 37'73/ IAdcfI'lMl ' By . Please note that in reviewing applicants for theQ8W Program, certain costs are incurred. therefore all application fees ate non-refundable. Coprr/gh! 1Sll/l QuoUly BuDd... Wa.'-d) QIqIoI.o.... aNI FORM a5D.s.o1 " j'1ar U.J u""l' u.., ~"-l- "~~-~6-2004 t7:12 ." .-' QURLITY BUILDERS WRRRRNTY 71 7 737 4288 P.02/02 AMENDMENT TO BUILDER AGREE~[ENT This AtnendJnent, is between Quality Builders Warrsn.ty COlJlomtion (QBW) North American Development Corporation. referred to as "Builder". Builder is a member in the QBW 10 Year Limited Warranty Program. QBW and Builder desire to modify the tenn ofthe Builder Agreement QBW and Builde:r, in exchange forthe mutual covenants contained herein and intending to be: legally bound hereby agree as follows: 1. Builder shall maintain its membership in QBW's Limited Warranty Program for an additional period of five (5) years to commence upon the: below date and subm it for enrollment homes which Builder or any affiliate constructs during that time. Builder may not terminate his participation in the QBW Program within thllt period unless consented to by QBW in writing. 2. Builder shall pay an lUU1ua1 membership fee. 3, Builder's rate will be lowered to $3.60 per thousand, The rate will remain in effect for the period ofthis Amendment. The Amendment will renew for a like: term unless thirty (30) days prior to the expiration oflhis term or any extensions either party provides the other thirty (30) days advance written notice, that they intend nOI to extend the period entitling the Builder to a lower rate, If Builder provides notice, QBW will adjust the Builder's rate upward effective at ~ the end of the then current term. 4. If, in the unforeseen event of a rate increase, caused by Legislation or situations beyond the control ofQBW, Builder has the right to terminate participation. S, If the tCI1l1S contJIined in this Atnendment are inconsistent with the Build~ Agreement, the terms of this Atnendment shall govern. IN WITNESS WHEREOF, the parties hereto have callSed this Amendment to be executed by their duly authorized officers, as oflhis 26t11 day ofFebruzory, 2004. QUALITY BUILDERS WARRANTY CORP. BY: '( N H AMERICAN DEVELOPMENT CORPB~ - > fJ' /) . /' /J. /" /1/ . BY: ;:-. /:"/"-v- ,.~ ,..c~~ TOTRL P.02 EXHIBI~~ 42 : '. . VERIFICATION I, JOSEPH M. OLSHEFSKI, President of Quality Builders Warranty Corporation, hereby certify and state that the foregoing Complaint is true and correct to the best of my knowledge, information and belief; and that I understand that false statements herein are made subject to the penalties of 18 Pa. C.S. ~4904, relating to unsworn falsification to authorities. Date: /2-26-05 By: ~'!) Y'::\ (p.., ~ ~ \ , ,~ "^ ""- ~ '::'; K -'..,1 .,*, \.. " 't, '" "" \: ---... , , -J ~ ~ \~ 0 <--' C) ~oJ C::'> ~ C; C_) ... '-.. cJ' '-\J C-=' ..... ~ I~ ) hl .f'. (-) \.."J ~ 'l ~"..) ....l ~ __ .0 f'n) r..."l N QUALITY BUILDERS WARRANTY CORPORATION : IN THE COURT OF COMMON PLEAS : CUMBERLAND COUNTY, : PENNSYLVANIA Plaintiff : DOCKET NO. 05-6725 v. NORTH AMERICAN DEVELOPMENT CORPORA nON Defendant CIVIL TERM AFFIDAVIT OF SERVICE BY MAIL On December 29,2005, I mailed a true and correct copy of the Complaint by certified mail, return receipt requested to, North American Development Corporation, Article # 7004 2510 0000 2106 8790, at their address. North Ameri(:an Development Corporation received the Complaint on January 4, 2006, as indicated by the receipt attached hereto as Exhibit "A". I make these statements pursuant to 18 Pa.C.S. 4904 relating to unsworn falsification to authorities and understand that false statements may be subject me to criminal penalties under that statute. ~t\~~ ennifer M ott, Secretary , U,S. Postal Service," CERTIFIED MAIL" RECEIPT (Domestic Mail Only; No Insurance Coverage Provided) ~f a a Certified Fee P~k Here RelurnReceiptFee (EndorselTlentAequired) CJ Restricted Delivery Fee r=I (Endorsemenl Required) U1 ru ~~ ;:;r- a a f'- .. ~ Total Postage & Fees $ . Complete items 1, 2. and 3. Also complete item 4 jf Restricted Delivery is desired. . Print your name and address on the reverse so that we can return the card to you. . Attach this card to the back of the mailplece, or on the front if space permits. 1. Article Addressed to: 'Nortv. A.VV'Cx"':~ ~O~V"t c,'1" 73c?\50ik-12~ HicfLJJ t:Yol'-lJ'~ ll.e.,\1\L 51q 9../ 3. Service Type ~Certified Mall o Registered o Insured Mail o Express Mail o Return Receipt for Mel'Chandlse DC,Q,D, 4. Restricted Delivery? (Extra Fee) DYes 2, 7004 2510 0000 2106 8790 PS Form 3811 , February 2004 Domestic Return Receipt 102595-Q2-M-1S40 .i Exhibit "A" (') ~.; -n\<~ rj'\r ';:'{' >'C_ ~,7' :~ " , , r...) l. ...:... IN THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYLVANIA QUALITY BUILDERS WARRANTY CORPORATION, CIVIL ACTION Plaintiff, DOCKET NO. 05-6725 v. NORTH AMERICAN DEVELOPMENT CORPORATION, Defendant. NOTICE TO PLEAD To: Quality Builders Warranty Corporation c/o John A. Gill, Esquire 325 North Second Street Wormleysburg, PA 17043 PLEASE TAKE NOTICE that if you do not tile a written response to the attached Defendant North American Development Corporation's Answer with New Matter within twenty (20) days from service, a judgment may be entered against you. Respectfully submitted, ECKERT SEAMANS CHER1N & MELLOTT, LLC ~r ~~ r-q O'r'&Mf ,0ntgomery,Esq.( JI.D.N .56105) . Coble, Esq. CPa. J.D. No. 89 ) 213 Mark Street, Eighth Floor Harrisburg, Pennsylvania 1710 I Telephone: 717,237.6052 Facsimile: 717.237.6019 Date: February 21,2006 Attorneys for North American Development Corporation : 1,0307768.1 } IN THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYLVANIA QUALITY BUILDERS WARRANTY CORPORATION, CIVIL ACTION Plaintiff, DOCKET NO. 05-6725 v. NORTH AMERICAN DEVELOPMENT CORPORATION, Defendant. NORTH AMERICAN DEVELOPMENT CORPORATION'S ANSWER WITH NEW MATTER For its Answer with New Matter, North American Development Corporation ("NADC"), by and through its counsel, Eckert Seamans Cherin & Mellott, LLC, states: I. NADC admits that Plaintiff offers new home warranties. By way of further answer, NADC is without knowledge or information sufficient to form a belief as to the truth of the remaining allegations in paragraph I. 2. In response to paragraph 2, NADC admits only that it has a place of business located at 7325 Oak Ridge Highway, Knoxville, Tennessee 37931. The remainder of the allegations in paragraph 2 are denied. By way of further answer, the allegation that NADC is "engaged in the new home building business" is broad and vague, and to the extent that it implies that NADC or any entities related to NADC builds or constructs anything, the allegation is denied. Neither NADC nor any entities related to NADC presently builds or constructs anything. Indeed, neither NADC nor any entity in any way related to NADC possesses a contractor's license, which is required by the State of Tennessee, the State in which NADC does business. 1 L0307768.1 } To the extent that Plaintifrs allegation implies that NADC or any entity related to NADC is, as a matter oflaw, a "builder" bound by the documents at issue, such allegation states a legal conclusion requiring no response. 3. NADC admits that Exhibit "I" is a document bearing the heading "Builder Agreement", executed by Plaintiff and NADC. By way of further answer, the document identified as Exhibit" I" is a writing that speaks for itself and any characterization, interpretation or paraphrasing thereof by the Plaintiff that cont1icts with the writing is denied. 4. NADC admits that Exhibit "2" is a document bearing the heading "Amendment to Builder Agreement", executed by Plaintiff and NADC. By way offurther answer, the document identified as Exhibit "2" is a writing that speaks for itself and any characterization, interpretation or paraphrasing thereof by the Plaintiff that conflicts with the writing is denied. 5. The allegations of paragraph 5 state a legal conclusion requiring no response. [fa response is required, NADC denies the allegations of paragraph 5. 6. The allegations of paragraph 6 purport to characterize, interpret or paraphrase a provision of the document identified as Exhibit" I", which is a writing that speaks for itself and any characterization, interpretation or paraphrasing thereof by the Plaintiff that conflicts with the writing is denied. 7. The allegations of paragraph 7 purport to characterize, interpret or paraphrase a provision of the document identified as Exhibit" 1", which is a writing that speaks for itself and any characterization, interpretation or paraphrasing thereof by the Plaintiff that conflicts with the writing is denied. 8. The allegations of paragraph 8 purport to characterize, interpret or paraphrase the document identified as Exhibit" I" and the document identified as Exhibit "2", both of which are 1 L0307768.1) writings that speak for themselves and any characterization, interpretation or paraphrasing thereof by the Plaintiffthat conflicts with those writings is denied. By way offurther answer, the allegations of paragraph 8 state legal conclusions requiring no response. If a response is required, NADC denies the allegations of paragraph 8. 9, The allegations of paragraph 9 state a legal conclusion requiring no response. Ifa response is required, NADC denies the allegations of paragraph 9. Insofar as paragraph 9 fails adequately to identify the factual basis for the allegation "would be required to place warranties on during that period of time", paragraph 9 is unduly vague and speculative, and consequently, insufficient to allow NADC meaningfully to respond. 10. The allegations of paragraph 10 purport to characterize, interpret or paraphrase a provision of the document identified as Exhibit" 1", which is a writing that speaks for itself and any characterization, interpretation or paraphrasing thereof by the Plaintiff that conflicts with the writing is denied. By way of further answer, the allegations of paragraph 10 state a legal conclusion requiring no response. If a response is required, NADC denies the allegations of paragraph 10. II. The allegations of paragraph 11 purport to characterize, interpret or paraphrase a provision of the document identified as Exhibit" I", which is a writing that speaks for itself and any characterization, interpreta1ion or paraphrasing thereof by the Plaintiff that conflicts with the writing is denied. By way of further answer, the allegations of paragraph 11 state legal conclusions requiring no response. If a response is required, NADC denies the allegations of paragraph 11. 11,0307768.11 NEW MATTER NADC may rely upon the following defenses and affirmative defenses if the facts and law warrant: 12. NADC incorporates by reference its answers to paragraphs 1-11 of the Complaint as though fully set forth herein. 13. Plaintiffs Complaint fails to state a claim upon which relief can be granted. 14. The amount in controversy set forth in Plaintiffs Complaint appears to be less than the jurisdictional limit of$35,000.00, and, therefore, this matter may be subject to compulsory arbitration pursuant to Cumberland County Local Rule of Court l301-1. 15. Section B,l of the document identified as Exhibit "1" provides: As part of its participation in QBW's warranty program, subject to QBW's acceptance, Builder agrees to enroll in the program every home [that] Builder, Builder's Principals, or any entity under Builder's, or Builder's Principals common control constructs in any state in which QBW operates and agrees to pay all fees required by QBW in the enrollment process, which fees shall be non- refundable. (emphasis supplied). 16. Paragraph 1 the document identitied as Exhibit "2" provides that "Builder shall. . . submit for enrollment homes which Builder or any affiliate constructs. . . ." (emphasis supplied). 17. As previously noted, neither NADC nor any entities related to NADC presently builds or constructs anything. Indeed, neither NADC nor any entity in any way related to NADC possesses a contractor's license, which is required by the State of Tennessee, the State in which NADC does business. 18. There is no provision in either of the documents identitied as Exhibits" I" or "2" that requires NADC or any entity related to NADC to build or construct homes. \ 1.0307768.! \ 19. Consequently, NADC has not breached either of the documents at issue. 20. No events and/or writings between Plaintiff and NADC can be interpreted to oblige NADC or any entity related to NADC to enroll homes into Plaintifl's warranty program, where neither NADC nor any entity related to NADC builds or constructs the homes. 21. NADC has, at all material times, proceeded in good faith with respect to the extensive unilateral obligations imposed upon it by the documents at issue. 22. Plaintiffs Complaint fails to set forth any specific facts in support of its claim that NADC breached either of the documents at issue, rendering its claim facially deficient as a matter of fact and law. 23. Plaintiffs request for specific performance is misplaced and should be stricken because a decree of specific performance is a matter of grace, not of right, and Plaintiff has failed to plead that it has no adequate remedy at law, or that justice requires the granting of such relief 24. Plaintiffs Complaint fails to set forth any material facts upon which its "projection" of damages is based, rendering the damages alleged in the Complaint wholly speculative and, consequently, factually and legally deficient. 25. The claims set forth in Plaintiffs Complaint are premature insofar as the time for any alleged performance under the documents at issue, even if Plaintiff's interpretations, characterizations and paraphrasings of certain provisions of those documents are legally viable, which NADC denies, has yet to expire. 26. Because Plaintiff has failed to cite specific facts to support its averments of breach or damages, and the time for any alleged performance under the documents identified as Exhibits "1" and "2" has yet to expire, Plaintiffs claims for relief fail as a matter oflaw, \ L0307768. t l 27. Plaintiffs purported characterizations, interpretations and paraphrasings of the provisions of the documents at issue upon which it bases its claims for relief are or may be unreasonably overbroad. 28. NADC reserves the right to amend or supplement this Answer with New Matter, and to assert additional defenses or counterclaims upon ascertaining more definite facts during and upon completion of discovery and investigation. WHEREFORE, having fully answered Plaintiffs Complaint, NADC prays for judgment in its favor and against the Plaintiff, and for the entry of an Order: (1) Finding that neither NADC nor any entity related to NADC is obliged to enroll homes into Plaintiffs warranty program, where neither NADC nor any entity related to NADC builds or constructs homes; (2) Dismissing the Complaint with prejudice; (3) Entering judgment in favor ofNADC; (4) Awarding NADC its costs of defense; and (5) Awarding such other relief as the Court deems just. Respectfully submitted, ECKERT SEAMANS CHERIN & MELLOTT, LLC r' l Ii I' Bridget E. ntgomery, Esq. (Pa. I.IJl. No..5 Matthew D, oble, Esq. (Pa. !.D. N~ 8960S) 213 Market Street, Eighth Floor '. Harrisburg, Pennsylvania 17101 '0 Telephone: 717.237.6052 Facsimile: 717.237.6019 Date: February 21, 2006 Attorneys for North American Development Corporation (L0307768.t l VERIFICATION I, KeIUletb R. Bowman, Chief Operating Officer of North American Development Corporation, do hereby verifY that the facts set forth in the foregoing Answer with New Matter are true to the best of my knowledge, information and belief. I understand that any false averments herein made are subject to the penalties of 18 Pa.C.S. S 4904, relating to unsworn falsification to authorities. Dated; February 21, 2006 Kenneth R Bowman {L0307168.1} CERTIFICATE OF SERVICE I hereby certify that I served a copy of the foregoing document via U.S. Mail, first class postage prepaid, which service satisties the requirements of the Pennsylvania Rules of Civil Procedure, addressed as follows. John A. Gill, Esquire Quality Builders Warranty Corporation 325 North Second Street W ormleysburg, P A 17043 Date: February 21, 2006 11~4 ,C..~ Matthew D. Coble, Esquire Attorney for North American Development Corporation l L0307768.! J l~ C, c~ ........" v ~ / IN THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYLVANIA QUALITY BUILDERS WARRANTY CORPORATION, CIVIL ACTION Plaintiff, DOCKET NO. 05-6725 v. NORTH AMERICAN DEVELOPMENT CORPORATION, Defendant. PRAECIPE FOR ENTRY OF APPEARANCE To the Prothonotary: Please enter the appearance of Eckert Seamans Cherin & Mellott, LLC on behalf of Defendant North American Development Corporation in the above-captioned matter. Respectfully submitted, ECKERT SEAMANS CHERIN & MELLOTT, LLC Date: February 21, 2006 l14#-,t ~, c..~ Bridget E. Montgomery, Esquire PA I.D. # 56105 Matthew D. Coble PA J.D. # 89603 213 Market Street, Eighth Floor Harrisburg, PA 17101 (717) 237-6000 Attorneys for Defendant North American Development Corporation 11.,(;306700.1) ~ , CERTIFICATE OF SERVICE I hereby certify that I served a copy ofthe foregoing document via U .S, Mail, first class postage prepaid, which service satisfies the requirements ofthe Pennsylvania Rules of Civil Procedure, addressed as follows: John A. Gill, Esquire Quality Builders Warranty Corporation 325 North Second Street Wormleysburg, PA 17043 Date: February 21, 2006 l!w, ( (, C. H- Matthew D. Coble, Esquire Attorney for Defendant North American Development Corporation 11.0306700,) , (' .'-,"\ ?-,' f-.- QUALITY BUILDERS WARRANTY CORPORA nON CIVIL ACTION Plaintiff, DOCKET NO. 05-6725 v. NORTH AMERICAN DEVELOPMENT CORPORATION Defendant. OUALITY BUILDERS WARRANTY CORPORATION'S REPLY TO NEW MATTER ] 2. No answer required. 13. The allegations of paragraph 13 state a legal conclusion requiring no response. If a response is required Plaintiff denies the allegations. 14. Denied. The amount in controversy is more than the jurisdictional limit. 15. Admitted. ] 6. Admitted. 17. Denied. NADC submitted for enrollment homes which it represented it constructed. IfNADC's allegations were true it would not have applied for membership in the QBW program. By way of further answer NADC is estopped from denying that they construct homes by their actions of enrolling homes in the QBW program. ] 8. Admitted. 19. The allegations of paragraph 19 state a legal conclusion requiring no response. If a response is required QBW denies the allegation. 20. Denied. NADC submitted homes for enrollment which it represented it "constructs". Additionally, QBW requested information concerning other affiliates which NADC refused to provide resulting in the within lawsuit. 21. Denied. It is denied that there are "extensive unilateral obligations" as alleged by NADC. The agreement entered into between the parties document the rights and obligations of the respective parties. NADC has failed to comply with the terms of its agreement as previously set forth in QBW's complaint. 22. Denied. QBW relies on the allegations set forth in its complaint to support its claim that NADC breached its agreement with QBW. 23. Denied. The Builder Agreement provides for specific performance as well as other remedies, 24. The allegations of paragraph 24 state a legal conclusion requiring no response. If a response is required QBW denies the allegation. 25. Denied. It is believed and therefore avered that NADC and/or its affiliates are in fact constructing homes but has refused to enroll the homes as required or provide the information requested by QBW. 26. The allegations of paragraph 26 state a legal conclusion requiring no response. If a response is required QBW denies the allegation. 27. Denied. QBW's characterizations are accurate and naturally, the documents attached as exhibits speak for themselves which is the parties' agreement. 28. No answer required. NADC's statement in paragraph 28 of its New Matter is not permitted by Pennsylvania Rules of Civil Procedure. WHEREFORE, Plaintiff, Quality Builders Warranty Corporation requested that relief be granted in accordance with its request in the Complaint filed in this matter. Respectfully Submitted, ~~e Attorney #41532 Counsel for the Plaintiff Quality Builders Warranty Corporation 325 North Second Street Wormleysburg, PA 17043 VERIFICATION I, JOSEPH M. OLSHEFSKI, President of Quality Builders Warranty Corporation, hereby certify and state that the foregoing Reply to Defendant's New Matter is true and correct to the best of my knowledge, information and belief; and that I understand that false statements herein are made subject to the penalties of 18 Pa. C.S. 94904, relating to unsworn falsification to authorities. Date: :J - [>- 'JOO(P By: CERTIFICATE OF SERVICE I HEREBY CERTIFY that I served a copy of the foregoing document via U.S. Mail, first class postage prepaid, which service satisfies the requirements of the Pennsylvania Rules of Civil Procedure, addressed as follows: Bridget E. Montgomery, Esquire 213 Market Street, Eighth Floor Harrisburg, PA 17101 Date: HM1.tl ~, 200!.J; , QUALITY BUILDERS WARRANTY CORPORATION : IN THE COURT OF COMMON PLEAS : CUMBERLAND COUNTY, PENNSYLVANIA Plaintiff DOCKET NO. 05-6725 vs. NORTH AMERICAN DEVELOPMENT CORPORATION : CNIL TERM Defendants PRAECIPE To the Prothonotary: Please mark the above captioned action as, "Discontinued With Prejudice". \ \ ~ A~ Gill, Esquire Attorney for Plaintiff Quality Builders Warranty Corporation ~ 0 <;;.:;:> ....n ......... -l --c;; 0! e,...) c'