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HomeMy WebLinkAbout06-3139 QUALITY BUILDERS WARRANTY CORPORATION, IN THE COU T OF COMMON PLEAS CUMBERL COUNTY, PENNSYLV NIA Plaintiff v. DOCKETN . t)t. - 3/37' h:J ED PEETE COMPANY Defendant NOTICE YOU HAVE BEEN SUED IN COURT. If you wish to defend against the claims set forth in the following pages, you must take action within twenty (20) da s after this Complaint and Notice are served, by entering a written appearance personally or by a omey and filing in writing with the Court your defenses or objections to the claims set forth again you. You are warned that if you fail to do so the case may proceed without you and a judgment be entered against you by the Court without further notice for any money claimed in the Compl . t or for any other claim or relief requested by the Plaintiff. You may lose money or property or oth r rights important to you. YOU SHOULD TAKE TIllS PAPER TO YOUR LAWYER AT ONCE. IF YOU DO NOT HAVE A LAWYER OR CANNOT AFFORD ONE, GO TO OR TELE HONE THE OFFICE SET FORTIl BELOW TO FIND OUT WHERE YOU CAN GET LEGAL LP. CUMBERLAND COUNTY BAR ASSOCIATION 32 South Bedford St. Carlisle, PA 17013 (717) 249-3166 May 31, 2006 QUALITY BUILDERS WARRANTY CORPORATION, : IN THE CO RT OF COMMON PLEAS : CUMBERL COUNTY, : PENNSYL ANIA Plaintiff vs. ED PEETE COMPANY : CIVIL ACT ON : DOCKETN . 0(, - .3/.3f ~ 1:- Defendant COMPLAINT AND NOW, this 31st day of May, 2006 comes the Plain ff, Quality Builders Warranty Corporation (QBW) and files the within Complaint against the abov named Defendant and avers in support hereof the following: 1. Plaintiff is Quality Builders Warranty Corporation, a Pennsylv 'a corporation engaged in the Ten- Year New Home Warranty business with its principal place f business situate at 325 North Second Street, Wonnleyburg, Cumberland County, Pennsylvania, 17043. 2. Defendant is Ed Peete Company (Builder) is a Virginia corpora ion engaged in the new home building business with its principal place of business situate at 240 Wilson Boulevard, Suite #100, Arlington, VA 22201. 3. On April 14, 2003, Builder executed a Builder Agreement in whi h Builder agreed to become a member in the QBW Ten-Year Limited Warranty Program, copy of said Agreement is attached hereto incorporated herein and marked as "Exhibit 1", 4. In connection with its membership, Builder executed an Amen ent to the Builder Agreement dated April 17, 2003 in which Builder agreed to maintain its me bership in the QBW Ten-Year Limited Warranty Program for five years to commence on A ril 17, 2003. A copy of said document is attached hereto incorporated herein and marked as" xhibit 2". 5. Builder has breached its Agreement with QBW by failing to enr I all homes as required, 6. Section B I of the Builder Agreement executed by Builder states "Builder agrees to enroll in the program every home Builder, Builder's Principals, or any en ty under Builders or Builder's Principals common control constructs." (See Exhibit 1). 7, The Builder Agreement states in Section B 5, "If Builder fails 0 enroll any eligible homes as required by this Agreement, QBW may seek specific performan e or other appropriate relief in legal or equitable proceedings." (See Exhibit I). 8. Builder's failure to enroll all homes they construct is a violatio of the Builder Agreement as amended and QBW seeks to specifically enforce the obligatio of the Builder Agreement, as amended to compel Builder to enroll all homes they constru t in accordance with QBW's membership requirements for the period April 17, 2003, to April 7,2008. 9, In the alternative, QBW seeks damages from Builder for home, which the Builder would be required to place warranties on during that period of time, whi h damages exceed the sum of $25,000. 10. QBW also seeks attorney's fees as authorized by Section B 50fth Builder Agreement. II. Jurisdiction is proper in the Pennsylvania courts since Section indicates, "This Agreement shall be interpreted and enforced in Commonwealth of Pennsylvania, All suits instituted under this Pennsylvania in a court of competent jurisdiction, Builder he jurisdiction of the Pennsylvania courts." 5 of the Builder Agreement cordance with the laws of the greement shall be brought in by consents to the personal WHEREFORE, Plaintiff, Quality Builders Warranty Corporation, demands judgment against Ed Peete Company as follows: That the Builder Agreement as amended executed by Defendant Ed Peete Company be specifically enforced to require Ed Peete Company to emoll all homes they co struct for the period April 17, 2003 through April 17 , 2008, in accordance with the Builder Agree t as amended, In the alternative that Defendant Ed Peete Company be ordered to ay damages equal to warranty fees which QBW was entitled to based upon homes projected for th period April 17, 2003 to April 17,2008, said amounts to be in excess of $35,000.00. Attorney's fees as authorized by Section B 5 of the Builder Agreeme t. Such other relief as deemed appropriate by the court. Respectfully Sub 'tted, o A. Gill, Esq .re 325 North Secon Street Wormleysburg, A 17043 (717) 737-2522 #41532 Attorney for Plai tiff Quality Builders arranty Corporation BUILDER AGREEMENT , 717 7:5'7 42S8 E)(l.-1lloi+ .t If'JUu~ p.lil2/ea .....~J.--:._.-..:-.......,... ~,.> .l.L:i.tJ.la.ao ....v. .-.. ..........'.1 J:lUll..lJl::~ WFlRRANT'r" VIRGINIA AGREEMENT made this 14th day of APRIL 2003 between QUALIlY BUILDERS WAARAN'TY CORPORATION, a Pennsylvania orporation, herein referred to as 'caw:' Liberty Mutual, herein referred to as "Insure: and Ed Peete Company Name 01 SulIcler: (iI1dIcaIt """"'"' a ccrporIV!on. par",orO/llp, I"cfiy 01 ..hot) ,of 3240 Wilson Blvd Suite 100 Arihlgton. VA 22201 .-.... herein referred to as 'Builder,' s.... .'" SECTION A. MEMBERSHIP AND TERM: ,. caw administers a program whereby home builders registered with OBW en II homes they construct In the program and purchasers of those homes are protected by a warran\y against certain peclfled defects, 2. In order to develOp and maintain a good reputation lor providing protection purchasers of well-built homes, aaw prottets and promoteS ns good.will oy careful selection of builders to partiel e in its warranty program. 3. Builder desires to participate in OSWs warranty program and, 10 that end. a rees to abide by the provISions of this Agreement and to conform its behavior to the srandards expressed herein d in the l.imited Warranty Agreement. Builder warrant5 Ihat all Information supplied to aaw In connection wlth its a IIcation Is we and correcl 4. All registration fees (initial and annual rescreening) are set by aaw at its disCI' lion and are non-relundable. 5, aBW, upon execuling this Agreement, has accepllld Builder as a member f Its warranlY program. subject 10 the Builder's continuing performal'lce at its obligatJon under this Agreement, 6. Suilder's membership shall commence on the date of Execution by aaw and all conl/nue until cermlnallld by liither PartY ln accordance with the terms of this agreement. QaW reserves the rig I to rescreen Ell.lllder annually. 11 oaw determines that Builder does ooc mest lts appraval standards upon rescreenl men QBW may Illrmin/lIe Builder's membership and the previsions 01 Section B. paragraph e, shall be In effect. SECTION B. HOllIE ENROLLMENT: 1. Requirements. As part 01 Its participation in aBWs warranty program. subject 0 QBW's acceptance, Builder agrees to enroll in the program every home Builder. Builder's Principals. or any entilY nder Builder'll, or Builder's Principals common control, constructs in aoy state In whioh aaw operates and agrees pay all fees required by caw In the enrollment process. Which fees shall be non-refundable. 2. ProcadUres. Builder agrees to enroll its homes according to procedures establi by aBW. Builder may enroll homes currently under construC'lion and homes completed but not sold or occupied (a of the dale 01 thls Agreement or me date ot reacceptance following a period of suspension or non-particlpation) prov ded ttlat enrollment is made within 45 days of execution of this Agreement or reacceptance, and oaw /las inspeeted d approved the home. Homes which remain in a Builder's inventory longer than 1 B months must be rolled by lhe end 01 the 79th month /rom construction start date to quality for enrollment. The warranty will be Issued the Builder end the unexpired por- tion of the warranty will automatically transfer to the purchaser. When enrolling other than a detached single familY dwelling, Builder shall roll each Individual unit of any multi. unit dwlllling such as, bul not limited to, duplexes. townhouses and condominiu . For each' home enrolled, the Builder shall pay a warranty fee as delermined aaw within the time periodS estab- lished by QBW. All warranty fees ara non-refundable. A minimum warranty fee of 100,00 shall apply. aaw will provide Builder with a copy at the Umited Warranty Agreement an Enrollment Form. Builder and pur. chaser must complete. sign the Enrollment Form al closing, and Builder agre to fUrnish CBW with a oopy of the signed Enrollment Form within ten (10) days of clOSing. Builder agrees not to char e the purchaser directly Ill. cost of !he enrollment fea. A home will no! be considered enrolled un61 oaw receives d approves the fully executed and completed Enrollment Farm, paymenl of all fees. and an approved finallnspectio . 3. Reservation of Power of Review. CBW reserves the right to reject any home sub tied for enrollment in the program it (a) tile Builder is not a member In good standing; (b) the home is not construct d In accordance wl1h the Warrarlty Standarde or building codee specified In the Urnited Warranly Agreement: (0) Ih Builder did nol obseMl the enroll- ment procedures; Cd) \he Builder misstates or misrepresents any information; Ce)lh Builder in any way falls to comply with \he terms of this Agreement. 4. Assignment of Rights. If a purcl1aser files a Complaint pursuant to the Um/led W ranlY Agreement which the Builder fails to correct, the Builder hereby assigns to the insurer or QBW on behalf of III Insurer, as the case may be, any rights Which Builder may have against a supplier. manufacturar, subcontractor or \her person 10r work performed or materials suppliscl In connection with ttlaC claim. Builder agrees to cooperate fully IIh oaw and to pravlde oaw with alf information which it requests perlainlng to the Claim. If Builder fails to so cooper ce. Builder agrees to compensalS and indemnify caw for any damages sustained by such lael< at cooperation . 5. Breach and Remedy. If Builder fails to enroll arrv eligible home as required by thrs Agreemenl, caw may seek spe- cific enforcement or other appropriate relief In legal or gquitable proceedingll, even if this Agreement tlas been termi- nated. Funhermore, Builder agrees to, indemnify and hold tlarrnless oaw and Its I surer for any lOSses or any dam. U",/.L"'''.) "J1 rJlt;l'J; 1;1.1. .I..). 't.~ rAA _I U!>_ IU)i) ~U I ~ ...vr-v-" I' .ou,ll....l.)I::.te WH~ANTY ll1JUU~ . 717 73'7 4288 P .1a3.-es . ' ages oaw may suffer as a resuit of Builder's breach at this Agreement a d sucn losses and COSts shalllnciude rea. sonable attorney's fees and expert witness rees. Builder hereby irrevocably authorizes and empowers any attorney or y coun of record of Pennsylvania or else- where to appear for and confesa judgment against Builder for all amounts Which Builder may becOme liable to CBW for the breach 01 this Agreement. as evidenced by an affidavit signed by cfficer of caw selling forth the amounts then due, plus attorney's fees incurred by oaw. with COSts or suit and rei ase 01 errors. Such authority shall not be exhausted by anyone exercise thereof but Judgment may be confessed as OIQsaid from time to time as often as there is a default. Remedies statad herein are elective and nol exclusive and oaw ma elect to proceed under this or any other paragraph in this Agreement. 6. SuspensIon or Termination. OSW may terminate, or at Its optton suspend. uilder's partloipatlon In OBW's Warranty Program. or any entity Q( Individual with which Builder is affiliated. jf oew d ermines that Builder has done any ell ~he following, which shall be deemed a breach of INs Agreemen[; (a) falls to comply fully with all provisions of this Agreement: (b) falls to perform any of its obliga[ions under this Agreement. including, bu not limited to, cooperating in the opera- lion of lhe prcgram's informal diSpu18 resolution and arbitration proced : (c) fails 10 respond to aews notIce of a homeowner's complaint; (d) fails [0 comply with a decision Which is rendered pursuanlto complaint p oeedures; (e) falls to provide adequate assurance to oaw within tsn (10) days after it eoeives a writtsn requesl trom oew for such assurance that (Within a reasonable timetable established or applOV by OBW) it is willing and able to coop- erate In dispute settlement and to perform the obligations under arry deci ion which is rendered pursuant to such procedures: (1) fails to otherwise cooperate In the operation of the aew Program in aceo ance with the rules and regulations of the aBW Program: (g) falls to provide timely proof Of COmpliance with this Agreement. as and wh requested by caw; (hl fails to comply with cew Warranty Standards and building codes as state in the Limited Warranty Agreement; (i) fails to oomply with the lII1roJlment procedures estBblished by CBW: (j) fails to provide proof \hat enrolled homelI have been SUbjected la required 'nspections; (k) fails to respond [0 purchaser complaints In a timely manner and as provi in the Umiled Warrarrt:y Agreement: (I) fails [0 pertQ(m its obligations with professional competence or conduct its operations from a posit 'on of financial strength and stability: (m) fails to notify OBW within 30 days of a change In ownership, company na e Q( company standing, financial con. dition, or of any other malerial fact which might affect Bunder's ability to me t its obligations under this Agreement: (n) fails to meet ethical standards in Its dealings with customers; or (0) misstates or misref:lresems any information in connection with its appticatlo Q( in the rescreenIng process, oaw reserves tne option to reinstate lermlnated affiliateS of the primary. t rminated Builder if aBW determines \hat !he termina.ted Builder or its principals are not in a position to controllt1e . IIated Bunder. Terminatlon of Builder by oaw shall not affect the rights Q( obligations of an of tne parties llJ this Agreement wllh respect to the Warran'c-l Program in elfect at Ihe dale of termination. subject to e prOVisions pertaining to voldability. If a Builder is suspended or terminated. he shall not represenl hlmSQlf to be a member of tne CBW Warranty Program nor offer the oaw Warranty and shall not use its Logo or refer to !I'lll p ram in any way nor attempt to enroll any home. The Builder shall immediately notify any Buyer currently under contr to purchase a home of the SU5plln- sion or termination and that the caw Warranty Program has been wlll1drawn. U request, Builder shall Immediate- Iy retUrn [0 QBW all materialS supplied by caw and all materials making referen e to caW. Should Builder fajita take these sleps, II shall indemnify and hold h8I'mIess CBW and tne insurer against and all expenses Incurred and lOSs- es suffered. including but not limited to attorney fees, by either of them as a resu . In addition. Builder shafl pay inter- est to QSW at the rate of t 8% per annum on all sums due to Qaw hereunder ,t s sums are not paid within 30 days of demand by QBW. , Builder may terminate this Agrll9lTlent upon 30 days advance written notice oew. If so terminaled by Builder or by CBW, Builder's Obligations under this Agreement shall continue as to those omes enrolled during the perlocf in which this Agreement was In effect. . 7. Notice. If OBW possesses a reasonable belief that reason exists 10 terminate or spend a Builder for vfolatlon of thiS Agreement, OBW may immediately terminate or suspend the Builder by providing it with written notice. If OBW elects to suspend the Builder, such suspensfon will remain In effect until Builder has cure all defects to aews satisfaction, however. oaw resllrves the right to terminate any suspended Builder. , 8. VoJdllbllity, OBW reserves the right to VOid any enrollment )! 8uilder misstates or isrepresents any informalfon In Its application or in Ins rescreening process, or mlsstales or misrepresents any info ion In the enrollment of a partie, ular home. or fails to pay any fees due for enrollmenl of any particular home. or tail to forward an Enrollment Form for a particular home within 10 days as required. or fails to enroll all units of a multi un building, SECTION C. BUILDEFrS OBUGATlONS: 1. ConstructIOn Obflgations. FollOWing are the Builders Obligations wl!h respect to a (a) Builder shall construct all homes in Conformity with \he Warran'c-l Standarcls Agreement and! or in COnformity with approved building codes and Other SIan effect at the beglMlng at constrlJOlion of the enn>lIed home. aaw reserves the ments for escrow payments or other means of proteotion with respect to any ho s Werranry Program: rovided in !tie Wmited Warran'c-l ds l!lStabllehed by OB1N and in hts to estabnsh speeral require- ss constrUcted by Bullder which IWv...... U"f.l."fU~ .1.0).10. r.l\.Ao 'V."'_"*V,",, IoV,Io_"'l""\l-..11 Ct1J,ce~~g~~NTY . 717 737 42SS F'.04/0B , CBW determines to be 'High Risks: (b) Builder agrees to have all homes inspected. as required by QBW. and pay all tees for the inspection and 10 pro- vide evidence of Inspection as and when required by oaw. caw shal provide Inspectors or shall approve gov- emmental inspectors.' (o) CBW shall have the right to perform spot inspections to verify Builder's c pliance with this Agreement and Builder agrees to cooperate. (d) The Builder agrees to indemnify and hold harmless oew and/or its Insur r for Bny losses or damages OBW and/or its Insurer may suffer 11$ a result of the use of fire relardanllTeated plywoo on any building enrolled under the OBW Ten Year Warran~ Program. This will include all claims and liability for I es. damages and expenses which oaw andlor Its Insurer may sustaln, Incur. payor be liable for by means of y InveStigation settlement or litigation of any claim or action which may be raised. made or bl'O\J9ht due 10 \he potentlal defects caused or liKely to be caused by use of the subject plywood. (e) If the Builder Is informed by oaw that ilIa building In an area dllSign d as one with active eon condillons. the Builder agrees to obtaIn such soils Investigations and reports as may be quired by oew. " such reportS Indlcl!te a need for special foundation design. the Builder agrees to construct th foundation according to the design ot a registered professional engineer to take Into aocount the conditions disci sed by the soil tesls. 2. WalTllnty Obllg~ns. Builder agrees to perform all obligations arising from is Agreement and the Limited Warranty Agreement. The Builder shall at its own expense perform all obligations as set forth in the caw Warranty Program and this Agreement, which Includes meeting the warranty standards upon notice fr the Purchaser wIthout the necessity ot aaw intervention. During yeatS one and two under the CBW Warranty Program, if Ihe Builder fails or refuses to perform ilS oblIgations In accordance with the Limited Warran~ Agreement or mis Agreement, the I urer. or Qf!}N on behalf of the Insurer. will perform the Builder's obligations, however. the Builder agrees to reimbu OBW and/or Insurer tor all expenses incurred In performing their obl~tions. Including but nOt limited to. cost of materials. cosl of collection, labor, architect's fees. engineering fees and counsel fees. oaw and/or Insu er reseNe all tights of subrogation. During years three through ten undar the oaw Warranty Program. Insurer. r caw on behal! of Insurer. will perform its obligations with raspeot to major struotural defects as set forth and denn d in lite Umi\Qd Warranty Agreement without the right of subrogation against the Builder provided that the de t or symptoms of the subslIQlJent occurrence of the defect. first arose after the expiration of two years under me BW warranty Program in effect for mat home. and that Builder did not attempt to conceal or cosmetically repair the efeet or symptoms of the subsequent occurrence of a defect and that !he defect does not arise from Builder's faHu e to construct the home to applicable aaw standards or adhere to Builder's responslbmties under the Buitder Agree ent. If the Builder repairs a major structural defect during years one or two. as must be not"ied. Once notltled, OBW will perform a compliance Inspection. SEcnON D. INFORMAL DISPUTE PROCEDURE: ,. Builder should be aware that the Umlted Warranty Agreement provides for an i rmal dispute settlement and aroltra- lion procedure to resolve complaints by purcnasers under the Umned Warran Agreement. Builder shOUld become familiar with the settlement procadures In order to be aware of Its rights and ponslbilitles. Bunder agrees to coop.. erate fully in the procedure and to be bound by and to comply with any decJsion of an independent \hlrd party, or arbi- trator. If the Builder fails lXl per10rm ils obligations hereunder ill a timely and ure shall be oonsldered to be a refusal to perform governed by paragraph C.2 2. The Builder agrees to pay all fees charged in oonnection with the informal die dures. .. . .. and workmanlika manner. such fail- efQof. te settlement and arbitration proce- SECTION E. TERMS GOVERl'<<ING OPERATION AND INTERPRET AnON: ,. Builder agrees to perform its obligatio under this Agreement In a timely mann . However. time. provided for perfor- mance of obligatfonS hereunder shall be extended by events not subject to oonu by the pel"$OO obligated 10 periorm. Such events include acts of God or lite public enemy. or riot. civl1 commotion or tal conduct.. ' 2. Descriptive headings as to the contents of particular provisions of this Agreeme t are Intended for convenience only and are not to be considered in construing this Instrument, 3. This ":Q,eement shall not constitute or be considered an agency, employer-empl relations~ip. Joint venlure or part- nership between the parties. None of the parties. nor any of their employees or ag nls. shall have the authOrity 10 bind or obngate the other party except as provided by this Agreement. 4, Should any provisions of this Agreement be determined by a court of competent j risdictlon to be unenforceable, thai determinatlon will not affect \he validi~ of me rernalnlng provisions. 5. This Agreement shall be Interpreted and enforced in accordance with the laws of e Commonwealth of PeMsyJvania. All suits Instituted under this Agreement shall be brougnt in Pennsylvenia in II co of competent Jurisdiction. Builder hereby consents to the personal jurisdic1ion of the Pennsylvania courts. ' 6. Builder shall not assign this Agreement Without the prior written conaent of OBW. 7. ThIs Agreement Is a contraCtual undertakfng betWeen asw and Builder. The Insur r is "" intended third party benefi- cIwy. It Is the express Intent of the parties heretO that the dUties. obligations. ter s and conditions agreed to herein ehall directly inure to the benefit of the Insurer identified herein es an intended third party beneficiary. aBW shall have r;.u r"".c.....c; \"v, U4/14/U~, _V;_U,J~.'.'!X. ..~ ,V/. ,,\,.ll"1\...,'T :CU1L..l!t:l<o; wRRRANTY -.=....,., 717 737 4288 p.eSree the right to enforce the Insurer'll rights under this Agreement, It is also exp essly Intended by !he parties hereto that the Insurer shall have the right and authority to enforce lhe terms and ,c;ondlfi ns of this Agreement, and in turtherance ~f its interests. enforce duties .~d obligations arising hereunder of the rasp tlve parties and the duties and obllga- !Jons under WI other caw Limited Warranty Program documents related 0 the intent, purpose and scope of this Agreement, caw Is the Administrator of the Warranty Program. Q8W is not the warr ntor under the Umiled Warranty Agreement. nor Is it the Insurer of the Builders performance under the terms of the Limited Warranty Agreement. Only the Insurer is responsible for performance of the Limited Warranty Agr men! in the event of Builder default. 8. This Agreemem shall Inure to the benefit of and be binding upon the heirs, xecutors, administrators, assignee. and successors at the representative parties. 9. This instrument, and security documents and documents referred to or in cor orated herein by referenoe, contains the emire agreement bellNeen the parties. and no statement, promises, or Indue ments made by eIther party or agent of either party thaI Is not contained in this written contract shall be valid or bindin : and thJs oontract may not be enlarged, modified. or altered except in writing signed by the panles and endorsed he on. 10. Failure of either party to Insist upon compliance with any proviSion ot this A reement shall r.ot constitute a waiver of that provision. 11. All notices required hereunder must be In writing and sent by certified mail. oSlage prepaid, retum receipt req~est- ed, to !he reolpient at the respective address shown below, or 10 whatever a dress the party may designate In writ- ing. 12, The effectiVe dale of this Agreement shall be the date of execution by QBW, Date of execution by QBW: Builder's Registration No.: APRIL 16, 2003 CORPORA: ON QUALl1Y aUI By 40338 IJUILDER: Ed Peete Company DATE 8y (SIgnature of AlItfIarlzed Representative. 11lIe) C e.ete " '" <Pl- print II8IlIll/IilIe llIfexw-.....) 3240 Wilson Blvd SUite 100 Arlington, VA 22201 (AddreslI) ADDENDUM ED P:&'u; COlllPANY. DlEJIROMJ'1'Ol'iI8AT CBERRYDAU!, u.c.. TBEJlR ~ THE BIlOMP'l'ONS AT COlJRTBOust 11, LLC., 1iab11ily .........der SbaIl BuIlder Asneaor pasr. reHlIII an4 tubire. NS ATCOVllTIIOUSE,ILC., e joint.t several which i1lcII1dee llIly E',,~ Iilb{t. . ,bgN uc 4 leg" "';F..._....-TBE BROMPTONS AT ,...tc MGI\. 1leg/# f).Ct. /'IGIt Claw FOI'lM V....oso 8101 BROMPTON'S AT COUKIHoUSE ILl D.... Cllji~gIft l!l111 OU8111y Sullders WlnanlY Corpora~on Reg# .~ '7.' "" ~.., &V1ibl+ ~~ AMENDMENT TO BUllJlER AGREEME This Amendment, is between Quality Builders Warranty Corporatio (QBW) and ED PEETE COMPANY, referred to as "BUilder". Builder is a member in the QBW 10 Year Limited W=ty gram. QBW and Builder desire to modify the term of the Builder Agr ement. QBW and Builder, in exchange for the mutual ~ovcnants canta ed herein anc. intending to be legally bound hereby agree as follows: 1. Builder shall maintain its membership in QBW's Limited arranty Progl1lm for an additional period of five, (5) years to commence upon the below date d submit for enrollment homes which Builder or any afIiliate construots during- that time. Buil r may not terminate his participation in the QBW Program within that period unless consented t by QBW in writing. 2. BUilder shall pay an annual membership fee. 3. Builder's I1ltewill be lowered to $1.80 per-thousand. The rat will rcmain ir. effect for the period of this Amendment. The Amendment will renew for a like unless 1hiI1.y (30) days prior to the expiration of this term or any extensions either party pro des the other :hirty (30) days advance written notice that they intend not to extend the period lowerrate. If Builder provides notice, QBW will adjust the Builder's ra e upward effective at the end of the then ourrent tcim. 4. If in the unforeseen event of a rate increase, caused by Legis ation, or situations beyond the control of QBW, Builder has the right to terminate participati D. 5. If the terms contained in this Amendment arc incons ent with the Builder Agreement, the terms of this Amendment shall govern. IN WITNESS WHEREOF, \ho parties heme have caused Amendment to be executed by their duly authorized officers, as of this 17lJ1 day of April, 20 3. \ QUALITY BUlI.DERS W CORP. BY: BY: VERIFICATION I, JORDAN F. OLSHEFSKI, Vice President of Quality Builders Warr ty 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 here n are made subject to the penalties of 18 Pa. C.S. ~4904, relating to unsworn falsification to uthorities. Quality Builders W By: Date: M"'~ 1.1 , ;;l006 ~~ 0 '& ~ ~ \ \. Q.S Q.; \ ~ ~ ~ n ~~:~ c> - <-::1 .1 ~:-; ,... 'I ~-"'. c_ ';;: I -- ~ ::;:l fY1~ -~f1J :<~IS C :~(., . ~"', -0 ~2~'1~ f'.) (.! ;fj ~'-:1 C...) :< -~ ,.;:;" QUALITY BUILDERS WARRANTY CORPORATION : IN THE COURT OF COMMON PLEAS : CUMBERLAND COUNTY, : PENNSYL V ANlA Plaintiff : DOCKET NO. 06-3139 v. ED PEETE COMPAMY Defendant CIVIL TERM AFFIDAVIT OF SERVICE BY MAIL On June 2, 2006, I mailed a true and correct copy of the Complaint by certified mail, return receipt requested to, Ed Peete Company, Article # 7004 2510 0000 2106 8820, at their address. Ed Peete Company received the Complaint on June 6, 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. .k~~ Peg nlson,Secretary Cl ru .., .., U.S. Postal Service CERTIFIED MAIL", RECEIPT (Domestic Mail Only; No Insurance Coverage PrOVided) .Jl Cl .-'l ru ~'f'I\-. Cl {". Cl Cl Cl Certified Fee Return Receipt Fee (Endorsement Required) Cl Re.lrlcted Dlrlive'Y Fee M (Endorsement Required) LI1 ru I '. ~ \~>-p~stmai'k,...>_, Hera ,/ 900? ~ - Nnr ) A.:. / Total Po..... & Fee. $ .5. I ."l.. ,0- .. ,/{( :1",,' , ~ ~~Ai":fF--_?U"';':\S_;--~mR~_~_'q:"h~_---'_---h_-- ;;!.~-;;J-~~.9.._.W!.!<~.9.~.~__.._~1:!ii_.~P!;1 YA tA~1 . Complete ~ems " 2, and 3. Also complete nom 4 W RestrIcted Delivery Is desired. . Print your neme and add_ on \he nwerse so that we can return \he card to you. . Attach this card to the back 01 \he mallplece, or on the front II specs permtts. 1. Ai"tide Addressed to: ~"_;, :~~~. &'0 "PEF-.e. C.OI'l\P"""j'" 31l.'-IO, WUAO..:! ~vO t' ~ re /tX) A~""C.Tol0, V", _~~J B. R_by{PrintodName) tr< ~- -0 l. D. IsdolNoly__flom _11 ~ VES, enter delivery _ below: ,-Typo 'IIJ CertIfled MsII 0 ~ MsI1 D Reg_ D Rotum~"'r_ndise D Insured Mall 0 C.O.D. .. _clod Delivery? (ExtnJ Fee) 0 Ves 2. A 7004 2510 DODO 2106 8820 (1: .~_ PS Form 3811, February 2004 DomooIIc -... Rocolpt 10259!)..02".H540 i :=;-...(1 t?5; ;:$ ~c,:. ~C) 28 :> c: z ~ o "" = r.::-::> "" '- r~: ""-. ; t..{:; -~. ...~.\ ", " ". \l o -" :J! rn;;D -,.-.(-.. c:: PRAECIPE FOR LISTING CASE FOR ARGUMENT (Must be typewritten and submitted In dupUcate) TO THE PRomONOTARY OF CUMBERLAND COUN1Y: Please list the within matter for the next Argument Court. .--..----------------......-----...-..--...-..-....--.....--------....----------------..------- CAPTION OF CASE (entire caption must be stated infull) Quality Builders Warranty Corporation (plaintiff) VS. Ed Peete Ccmpany (Defendant) No. 3139 06 Term 1. Stale matter to be arBUed (i.e., p1aintift's motion for new trial, defendant's demurrer to cOIDplainl,etc.): Preliminary Objections of Defendant Ed Peete Ccmpany 2. Identify counsel who will argue cases: John A. Gill, Esquire (a) for plaintiff: (Name and Address) 325 North Second street, Wonnleysburg, PA 17043 (b) for defendant: Jennifer M. Horn, Esquire (Name and Address) United Plaza 30 S. 17th street, 19th Floor. Philadelphia, PA 19103 3. I will notify all parties in writing within two days that this case bas been listed for argument. 4. Argument Court Dale: July 12, 2006 Print your name Date: June 20, 2006 Ed Peete Ccmpany Attorney for OL ~ l~ ~ ... ~~ ~ ~ r ( ~. ~r s ~ ~ COHEN, SEGLIAS, PALLAS, GREENHALL & FURMAN, P.C. BY: MARIAN A. KORNILOWICZ, ESQUIRE JENNIFER M. HORN, ESQUIRE IDENTIFICATION NOS.: 43776/79721 United Plaza 30 S. 17th Street, 19th Floor Philadelphia, PA 19103 (215) 564-1700 Attorneys for Defendant Ed Peete Company QUALITY BUILDERS WARRANTY CORPORATION 325 N. Second Street Wormleyburg, PA 17043 COURT OF COMMON PLEAS CUMBERLAND COUNTY, PENNSYL VANIA CIVIL ACTION v. NO: 06-3139 ED PEETE COMPANY 3240 Wilson Boulevard, Suite 100 Arlington, VA 22201 PRELIMINARY OBJECTIONS OF DEFENDANT ED PEETE COMPANY Defendant Ed Peete Company ("Peete"), by and through its attorneys, Cohen, Seglias, Pallas, Greenhall & Furman, P.C., hereby preliminarily objects to the Complaint of Plaintiff, Quality Builders Warranty Corporation ("QBW"), pursuant to Rule 1028 of the Pennsylvania Rules of Civil Procedure, as follows: I. Procedural & Factual Background 1. The within action was instituted by the filing of a complaint on or about June I, 2006 in the Court of Common Pleas of Cumberland County. 2. In its Complaint, QBW alleges a contract was created between it and Defendant Peete on or about April 14, 2003. (Complaint 'Il 3). 3. This contract is entitled "Builder Agreement" ("Agreement") and is attached to the Complaint. (Complaint Exhibit "1 "). 4. QBW alleges that on or about April 17, 2003, QBW and Peete executed an Amendment to the Builder Agreement which extends Peete's obligations under the agreement through April 17, 2008. (Complaint 'II 4). 5. The Amendment to the Builder Agreement is attached to the Complaint. (Complaint Exhibit "2"). 6. QBW alleges that Peete breached the Agreement by failing to enroll all homes as required within the agreement. (Complaint ~ 5). 7. QBW is seeking injunctive or, in the alternative, monetary relief for Peete's alleged breach pursuant to the terms of the Agreement. (Complaint ~ 7,9). II. Preliminary Objection in the Nature of Insufficient Specificity in Pleading Pa.R.C.P. l028(a)(3) 8. Peete incorporates the preceding paragraphs as if set forth at length herein. 9. QBW's Complaint purports to set forth a claim for breach of contract against Peete. 10. QBW has failed to allege specific facts sufficient to support an allegation that Peete is in breach of the Agreement. II. QBW has failed to specify the location of the homes constructed by Peete that were allegedly not enrolled pursuant to the Agreement. 12. Further, QBW has failed to allege the dates on which construction of said homes was commenced and completed. 13. The location and time of construction of the homes that were allegedly not enrolled are material facts pursuant to Sections B( 1) and B(2) of the Agreement. 14. Based upon the allegations contained in QBW's Complaint, Peete is unable to 3 ascertain the basis or validity of QBW's claim for breach of contract with sufficient precision to prepare a responsive pleading and/or prepare for trial. WHEREFORE, Defendant, Ed Peete Company requests that the Court enter an order sustaining its Preliminary Objections and striking QBW's Complaint. In the alternative, Peete requests that this Court order QBW to amend its Complaint to properly plead a claim for breach of contract, including in said amended complaint: a. any and all actions taken by Peete, which form the basis ofQBW's claim for breach of contract including all relevant and/or pertinent dates and locations; b. any and all omissions of Peete, which form the basis ofQBW's claim for breach of contract, including all relevant and/or pertinent dates and locations; and c. any other facts necessary for Peete to prepare a responsive pleading and otherwise defend against this claim. III, Preliminary Objection in the Nature of Legal Insufficiency of Pleading (Demurrer) Pa.R.C.P. 1028(a)(4) 15. Peete incorporates the preceding paragraphs as if set forth at length herein. 16. QBW requests that the Court require Peete to specifically perform its obligations under the Agreement by ordering Peete to enroll all homes it has constructed. 17. QBW avers that the Agreement includes a clause stating that, in the event of breach, "QBW may seek specific performance or other appropriate relief in legal or equitable pro0eedings.,,1 18. QBW requests, in the alternative, that damages in excess of $25,000 be granted to \ For the sake of accuracy, counsel for Peete would like to note that paragraph 7 of Plaintiff's Complaint misquotes the language of the Agreernenl. Section B5 of the Agreernent ststes, "If Builder fails to enroll any eligible home as required by this Agreement, QBW may seek specific enforcement or other appropriate relief in legal Dr equitsble proceedings..." (emphasis added). 4 compensate QBW for losses it will sustain as a result of Peete' s failure to enroll all homes. 19. The Pennsylvania Supreme Court disfavors the use of equitable relief in contracts when an adequate remedy at law is available. Clark v. Pennsvlvania State Police, 436 A.2d 1383, 1385 (pa. 1981). 20. There is an adequate remedy at law when there exists a "method by which the amount of damages can be accurately computed or ascertained." Id. 21. QBW claims damages in excess of $25,000, accounting for its inability to recover warranty fees as a direct result of Peete's alleged failure to enroll all homes. 22. These warranty fees can be accurately computed or ascertained. 23. Therefore, in recognition of the Pennsylvania Supreme Court's refusal to apply specific performance when an adequate remedy at law exists, relief under QBW's claim for specific performance of the Agreement cannot be granted. WHEREFORE, Defendant, Ed Peete Company requests that the Court enter an order sustaining its Preliminary Objections and striking QBW's claim for specific performance of the Agreement. IV. Preliminary Objection in the Nature of Insufficient Specificity in Pleading Pa.R.c.p. 1028(a)(3) 24. Peete incorporates the preceding paragraphs as if set forth at length herein. 25. Paragraph 9 ofQBW's Complaint claims damages in excess of $25,000. 26. No other paragraph of QBW's Complaint asserts a right to additional monetary damages. 27. However, the ad damnum clause of QBW's Complaint requests that Peete be ordered to pay damages in excess of $35,000. 5 28. As a result of this inconsistency, Peete is unable to ascertain the severity of QBW's claim for breach of contract with sufficient precision to prepare a responsive pleading and/or prepare for trial. WHEREFORE, Defendant, Ed Peete Company requests that the Court enter an order sustaining its Preliminary Objections and order QBW to amend its Complaint to properly and consistently plead the amount of damages claimed. COHEN, SEGLIAS, PALLAS GREENHALL & FURMAN P.C. 1f}~ PJn ;~Jv;; RE BY: MARIAN A. KORNILOWI JENNIFER M. HORN, ESQ United Plaza 30 S. 1 ib Street, 19tb Floor Philadelphia, PA 19103 Attorney for Defendant, Ed Peete Company 6 CERTIFICATE OF SERVICE The undersigned hereby certifies that a true and correct copy of Preliminary Objections of Defendant Ed Peete Company was served via first class mail on June 20, 2006, postage prepaid upon the following: John A. Gill, Esquire 325 North Second Street Wormleysburg, PA 17043 COHEN, SEGLlAS, PALLAS GREENHALL & FURMAN P.C. BY: MA N A. KORNILOWICZ, ESQUIRE JEN ER M. HORN, ESQUIRE Ited laza 30 S. 17th Street, 19th Floor Philadelphia, PA 19103 Attorney for Defendant, Ed Peete Company ~ 7 :!f _ c ~ ~ t t -0 ~ ~ ~ J~ \ i ~ .....c... COHEN, SEGLIAS, PALLAS, GREENHALL & FURMAN, P.C. BY: MARIAN A. KORNILOWICZ, ESQUIRE JENNIFER M. HORN, ESQUIRE IDENTIFICATION NOS.: 43776/79721 United Plaza 30 S. 17tb Street, 19tb Floor Philadelphia, PA 19103 (215) 564-1700 Attorneys for Defendant Ed Peete Company QUALITY BUILDERS WARRANTY CORPORATION 325 N. Second Street Wormleyburg, PA 17043 COURT OF COMMON PLEAS CUMBERLAND COUNTY, PENNSYL VANIA CIVIL ACTION v. NO: 06-3139 ED PEETE COMPANY 3240 Wilson Boulevard, Suite 100 Arlington, VA 22201 ENTRY OF APPEARANCE TO THE PROTHONOTARY: Kindly enter the appearance of Marian A. Kornilowicz and Jennifer M. Horn on behalf of Defendant Ed Peete Company in the above-captioned matter. COHEN, SEGLIAS, PALLAS GREENHALL & FURMAN P.C. ~ . ~1t1~N;C1JwJ. UlRE BY: MARIAN A. KORN OWICZ, JENNIFER M. HORN, ESQUI United Plaza 30 S. 17,b Street, 19tb Floor Philadelphia, PA 19103 Attorney for Defendant, Ed Peete Company L 'tJ - ~~t B ~ t: '""ti)~t ~ - - ..Q ..n . \ff'~ j ~ QUALITY BUILDERS WARRANTY CORPORATION, IN THE COURT OF COMMON PLEAS CUMBERLAND COUNTY, PENNSYLVANIA Plaintiff v. CIVIL ACTION ED PEETE COMPANY DOCKET NO. 06-3139 Defendant AMENDED COMPLAINT AND NOW, this 5th day of July, 2006 comes the Plaintiff, Quality Builders Warranty Corporation (QBW) and files the within Amended Complaint against the above named Defendant and avers in support hereof the following: 1. Plaintiff is Quality Builders Warranty Corporation, a Pennsylvania corporation engaged in the Ten- Year New Home Warranty business with its principal place of business situate at 325 North Second Street, Wormleysburg, Cumberland County, Pennsylvania, 17043. 2. Defendant is Ed Peete Company (Builder) is a Virginia corporation engaged in the new home building business with its principal place of business situate at 3240 Wilson Boulevard, Suite #100, Arlington, VA 22201. 3. On April 14,2003, Builder executed a Builder Agreement in which Builder agreed to 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 1". 11. QBW is entitled to specific performance because monetary damages can not be calculated with any degree of certainty until April 17, 2008. Damages are based on the number of homes the Builder constructs and the selling prices of those homes. It would be mere speculation as to how many homes the Builder would construct from now until April 17, 2008. Additionally, the final selling prices of the homes would be speculative. 12. QBW also seeks attorney's fees as authorized by Section B5 of the Builder Agreement. 13. 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 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 judgment against Ed Peete Company as follows: That the Builder Agreement as amended executed by Defendant Ed Peete Company be specifically enforced to require Defendant Ed Peete Company to enroll all homes they construct for the period April 17, 2003 through April 17, 2008, in accordance with the Builder Agreement as amended. In the alternative that Defendant Ed Peete Company be ordered to pay damages equal to warranty fees which QBW was entitled to based upon homes projected for the period April 17, 2003 to April 17,2008, said amounts to be in excess of $35,000.00. Attorney's fees as authorized by Section B 5 of the Builder Agreement. Such other relief as deemed appropriate by the court. Respectfully Submitted, John . Gill, Esquire orth Second Street Wormleysburg, PA 17043 (717) 737-2522 #41532 Attorney for Plaintiff Quality Builders Warranty Corporation -.- -....-~_J' .~-' ---- on. --: - 1lIUML.~ I T .cU!l:~t<:j WARRANTY ""-'. BUILDER AGREEMENT . ,717 7'37 4288 '-.... f'X.Vl' foi+ .J- IfY UUJ: P.~~8 VIRGINIA AGREEMENT made this )4th _ day of APRIL _, 20 03 , between QUALl1Y BUILDERS WARRANTY CORPORATION. a Pennsylvania corporation. herein referred to as 'QSW.. Ed Peete Company Uberty Mutual. herein referred to as "Insurer.. and NIlI'Ile 01 Bu/1cIer: (lndIcale WIl0lller a COIpOr/lIJon. parlnlll$/Vp, Individu:I or other) 3240 Wilson Blvd Suite 100 Arlington. VA 22201 ,of Slate Zio AddrG8$ I herein referred to as 'Builder,' SECTION A. MEMBERSHIP AND T.ERM: 1. OSW administers a program whereby home builders registered with OBW enroll homes they construct in the program and purchasers of those homes are protected by a warranty against certain speclfled defects. 2. In order to develop and maintain a good reputation for providing protect/.on to purchasers of well-built homes, asw protects and promotes its good.WiIl oy careful selection of builders to partIclpace in its warranty program. 3. BuDder desires to partlcipare in OSWs warranty program and, to that end. agrees to abide by the ProvIsions of this Agreement and to conform its behavior to the standards e:cpressed herein and in the Umited Warranty Agreement. Builder warrants that all Information supplied to CBW In connection wfth its application Is true and correct 4. All registration fees (initial and annual rescreening) are set by caw at its discretion and are non-retundable. 5. CBW, upon executing this Agreement. has accepted Builder as a member of Its warranty program, SUbject to the Builder's continuing performance at its obligation under this Agreement, . 6. Buflder's membership shalJ commence on the date of Execution by aaw and shall continue until terminated by either party in accordance with the rerms of this agreement, oaw reserves the right to rescreen BuDder annually. If OBW determines that Builder' does nor meet Its apprcval standarcls upon rescreenIng then QBW may terminate Buirder's membership and the provisions ot Section B. paragraph a, shall be In effect. SECTJONB.HOMEENROlUM!N~ . 1. Requirements. As part 01 Its participatIon in aBWs warranty program, subjecr to OBW's acceptance, Builderagrees to enroll in the program every home BUilder, Builder's PrIncipals, or any entity under Builder's. or Builder's PrincIpals common control. constructs In any state in which caw operates and agrees to pay all fees required byQBW In the enrollment process, which fees shall be n~n.refundable. . .' . 2, Procedures. Builder agrees to. enroll ks homes according to procedures established by CBW. Builder may enroll homes currently under construction and homes completed but not sold or occupied (as of the date 01 thJs Agreement or the date of reacceptance tollowing a period of suspension or non.particlpation) provided that enrollment is made within 45 days of execution of this Agreement or reacceptance, and OBW has inspected and approved the home. . Homes Which ramaln In a BUilder's inventory longer than , a months muat be erJrolled by lhe end of the 19th month from construction start date to qualify for enrollment The warranty WIll be issued to the Builder end the unexpired por- tion ot the warranty will aufomaticaIJy transfer to the purchaser. When enrolling other than a detached single family dwelling, Bunder shall enroll each Individual unIt of any multI- unit dwelling such as, but not limited to, duplexes. townhouses and condominiums. . . For each' home enrolled. the Builder shatl pay a warranty fee as determined by asw within the time periods estab- lished by QBW. All warranty fees are nOD-refundable. A minimum warranty fee of $100,00 shaJl appry. OBW will proVide Builder with a copy of the Umited Warranty Agreement and Enrollment Form. Builder and pur.. chaser must complete. sign the Enrollment Form al closing, and Builder agrees to furnish caw wJ1h a COpy oi the signed Enrollment Form within ten (10) days of clOSing. Builder agrees not to charge me purchaser directly the cost of the enroJlment fee. A home will not be considered enrolled l.JI1til oaw receives and approves the fuJJy executed and completed Enrollment Form, payment of all fees, and an approved tina/Inspection. 3. -- of Power of RevIew. OBW reselVeS the right to rejBct any home submitted for onlOHment Jntho PI09am " Cal tho BuIIdor Is not a member In good stonding: (b) the horne is nol.CCI1SIrucled In iiCCOldance wlJh rho Wamnty Standards or building cocles specified in the Umited Warranty Agreement: (0) the Bulider did not obselVe the erroll- ment procedures; (d) the Builder mIsstates or misrepresents any information; (e) the Builder in arry way falis to comply with the terms of this Agreement. . . 4. Assignment of Rights. /f a PUrchaser fifes a Complaint pursuant to the Umited Warranty Agreement which the Builder falls to correct, the BlJilder heteby assigns to rho Insurer or CBW 0fI behalf 011110 Insurer. as tho ease may be. any rights which Builder may have against a SUpplier, manufacturer, subcontractor or other person for work perlormed or materials supplied in connection with that cleum. Builder agrees to cooperate fulfy with oaw and to provide aaw with alr inforrnatfon whIch it requests pertaining' to the craim. If Builder faUs to so cooperate. Builder agrees to compensate and indemnffy QBW for any damages sustained by such Jack of cooperaUoo . s.. IlJeoch and IlomocIy. If Builder fails 10 onroIl """ eligible home as required by this Agreement. oaw may _ .,.. cific enforcement or other appropriate relief in legal or equitable proceedings, eveh if this Agreement has been termi. nated. Funhermore, BUilder agrees to. indemnify and hOld harmless oaw and Its insurer for any losses or any dan- V'tl J.'tl V" l:.J) rJ:;l:;'!',t:; ~u. C..ITV .1,,; "" r^-A _, U~_ 'to<)__:~U I ~ ......".,...& I I .l:lUll..lil:K:::l WH~r1I" I \...--~ " ~UUJ . ~17 737 4288 P .la3/08 ages CBW may suffer as a resuit of BuUde~. breacil of 1I1i. Agreernsnt and sucillosses and CCSlS Shall Include rea- sonable attorney's fees and experr witness fess. Builder hereby irrsyocably authorizes and empowers any attorney or any COUrt of record of Pennsylvania or else- where 10 appear for and cont... Judgment against Build", for a/l amounls for which Builder may become Balli, to OBW for the breach of this Agreement as evidenced by an affidavit signed by an offlesr of OBW selling forth th, amount. then due, plus attorneys fees incurred by oaw, with costs of suit and release ot errors. Such authority shall not be exhausted by anyone exercise thereof but jUdgment may be confessed as aforesaid from time to time as often as there is a default. _ _ Remedies stated herein are elective and not exclusive and oaw may elect to proceed under this or any ocher paragraph in this Agreement. . . S. Suspension or TennlnaIJon. oaw may terminate, or at Its opllon suspend, Bullde~s participation In OBWs Warranly Program. or any enllly or IndividUal With which Builder is afflUated. if CBW determines that Builder hos done any 01 rhe follOwing, which shall be deemed a breach of this Agreement; (a) falls to comply fully with all provisions of this Agreement; (b) fails 10 perfotm any of Its obligations under this Agreem""t ineluding, but nO! limited to, cooperarlng in Ih& opera- tion of the program's Informal dispute resolution and arb/rration procedure; Ce) fails to respond to oaws notice of a homeowner's complaint; (d) fails to comply with a decision WhiCh Is rendered pursuant to compla!nt procedures: _ Ce) falls to provide adequate assurance to oaw within ten (10) days after it receives a written request from oaw for such ...urance that (within a reasonable limelobl8 eslabtlshad or ap/>1OVed by C8W) it is "'lUng and able 10 coop- erate In dispute settlement and to perform the obligations under any decision which is rendered pursuant to such procedures: ro fail. to otheIwIse cooperate In the operation of Ihs OBW Program In accoRlance With the ru,"" and ftlQulaJ!ons of The caw Program; _ (g) falls to provide timely proof Of compliance with this Agreement as and When requested by oaw: (h) fails to comply with caw Warranty Slandarda and building codes as sta1ed in the Umiled Warranty Agreemen,; (;) faJls to oomply with the enrollment procedures established by QBW; Q) fails to provide proof that enrolled homes have been SUbJected to required inspections: (k) fails to respond to purchaser complaInts In a timely manner and as provided in the Um/led Warranty Agreement: (I) fails 10 perform its obligations With professional competence or conduct its operations from a position of financial stretlgth and stability: _ . (m) faIls:!o notify oaw within 3Q days.of a change In ownership, company name or company standing, financial con. dition. ,or of any other malerial fact wf1lch might -affeot BuDder's ability to meet its obligations under this Agreement: Cn) fails to meet ethical standards in Its dealings with customers; or (0) mIsstates or misrepresents any information in connection with its application or In the rescreenIng process. QBWreserves the option to reinstate termInated affilia:res of the prImary, terminated Builder If OBW derennines that the terminated Builder or its principals are nor in a posItion to control the affiliated BuDder. _ Terminallon of BUilder by oaw shall not affect lha righls or obligallons 0/ any of 111& panles to this Ag""""""l""lh respect to the Wananty Progiam In effact at the dale of termination, subJect 10 the prov/siono Pertaining 10 voIdllblllty. ff a Builder is suepended Or terminated. he shall nO! representl1Jmselllo be a member of the QBW Watranly Program nCl' off&r the oaw Warranly end ahall not use Its logo or r&Ierto the program in any way nor attempt to enroll any home. The Build.r shaD Immedlarely notify any Buyer currently Under COnllact 10 /lUIchase a home of the """,OD- olan or term/nation and lhat the OBW Warranty Program has been withdrawn. Upon request. Builder shalllmmedale- Iy return '" OBW all mall!lrJals supplied by CBW end sJI ma1erIaJs making reference 10 aaw. SI1cuId BU/jder fail to lake these steps, ~ shall Indemnjfy and hold hlll'l!lleos OSW end lhe i'lsurer agaJ/lSl any lllld allllXpenses Incurred and 0Ss- es suttered. inCluding but not IImiled 10 attomey rees, by either of lhem as a result. in addition. Butlder Shall pay Oter. ...'" OBW at the rate of 18% per ann"", on all SUms due 10 QBw herounder " such SllllS ate not paid lVilhin 30 days or demand by Qaw. . _ Builder may terminate this Agrsoment upcn 30 days """""0& written nolice 10 OBW. II so termlnateo' by Bulder or by OBW, Builo'er's OllJlgations tmderth/s Ag""""ent shall conlinue as to those homes llnn>Iled during the Perlocf In which this Agreement was In effect.. . 7. Notice. If oaw paso..... a reasonable bolief that reason _ 10 lerminate or suspend a BUilder for violatIon cllhls Agreement QBw may ImrnediaJeJy terminate or SUSpend !he Builder by Providing ~ wilh written notice. If OBW eJects 10 suspencf rhe Buflde.. such suspension will remoin in etreet until Builder has cured. ail defecJs to OSWs satisfacIon. however, oaw reserves the right to tennfnate any Suspended Builder. 8. 'Alldablroty, caw resetves the right 10 void any enrollment If Builder mlSsJates or misrepresents any Infonnallon ~ 1!9 apPllcatlcn or in the rescntenlng P/tIceSS, or mlssrates CI' rr/srepl8eenlS any InIormmion In the OlVDllment of a POlllc. u/ar home, or foils '" pay any fees due for erroIlment 0' any particular home, or faIls to foIWaRl an Enrollment Form for a particular home within 10 days as required, or.faiIs to enroJl all unlls of a mulll unn building. ... SECTION C. BUlLDER'S OBLIGATIONS: 1. Constn.c:tIon ObllgaUons. Following sre the Buiidel's ObllllaJions with resPllCllo QaW& Werranly Program: Ca) Builder shall COIlSIluct sJI homes in ConIonnlly With th. Warranty Standards pravio'ed In the Urnlted Warianty AQ1eemon~ an", or In OOnIormity With - building COd.. and Olh... srandarcls established by CBW and In &trect at the beg/nntng of cons_ of the enroned homo. ~ reserves the rfghls to establish spe~lal reQUio- menls lor escrow payments or other means of ProtectIon with respect 10 any ham.. _ by Builder whOI1 , , . '--' U"l/J."l/U~ J.". ''* rAA , v~"'_ 'tU.,J I.V' I. "".."..,....... I , ClI rLC1C \"V. ~U1~~~~ W~NTY ....-., . 717 73? 4288 lf9 U U4 P . 04.1'08 . OSW determines to be "High -Risks.' (b) Builder agrees to have all homes inspected. as required by OBW. and to pay all fees 10r the inspection and to pro- vide evidence of Inspection as and -when required by OBW. oaw shall provide Inspectors or shall approve gov- ernmental inspectors.' . (0) caw shall have the right to perform spot Inspections to verify Builder's compliance with this Agreement and Suilder agrees to cooperate. Cd) The Builder agrees to indemnify and hold harmless OBW and/or Its Insurer for any losses or damages CSWand/or its Insurer may suffer as a result of the use of fire retardant treated plywood on any building enrolled under the aaw Ten Year Warranty Program. This will include all claims and Dability for losses. damages and expenses whiCh asw and/or Its Insurer may sustain. Incur, payor be liable for by means of any Investigation settlement or litigation of any claim or action which may be raIsed. made or brought due to the potentfal defects caused or likely to be caused by use of the subject Plywood. (e) If the Builder Is informed by OBW that it Is building In an area designated as one with active soU conditions. the Buifder agrees to obtaIn such soils Investigations and reports as may be required by oaw.1t such reports Indicate a need for special foundation design. the Builder agrees to construct the foundation according to the design of a registered professional engineer to take Into aocount the condklons disclosed by the soif tests. 2. Warranty ObJJgsllons. Builder agrees to perform all obligations arising tram this Agreement and the Limited Warranty Agreement. The Builder shalf at its own expense perform all obligations as set forth in the caw Warranty Program and this Agreement. which Includes meeting the warranty standards upon notice trom Ihe Purchaser wIthout the necessity of aBW Intervention. During years one and two under the a8W WaJranty Program. jf the Builder fails or refuses to perform its obligations in accordanoe with the Umited Warranty Agreement or this Agreement, the Insurer. or caw on behalf of the Insurer, will perform the Builder's Obligations. however. the Builder agrees to reImburse aaw and/or Insurer tor all expenses Incurred In performing their oblig(:ltions. inCluding but not limited to. cost of materials. cost of collection, labor, architect's fees. engineering feeS' and counsel fees. _. OBW and/or Insurer reserve all tights of subrogation. During years three through ten under the oew Warranty Program. Insurer. or aaw on behalf of Insurer. wilf perform its obligations with respect EO major strUotural defects as set forth and defined in the limited Warranty Agreement without the right of subrogation against the Builder provIded that the defect. or symptoms of the subsequent Occurrence 01 the defect. first arose after the expiration of two years under the aBW Warranty Program in effect for that home. and that Builder did not attempt to conceal or cosmetiCally repaIr the defect Dr symptoms of the Subsequent occurrence of a detect and that the defect does not arise from Builder's failure to. construct the home to applicable aBW standards or adhere to Builder'sresponslbilitles under the BUUder Agreement. Jf thQ 'Builder repairs a major Btructural defect during years one or two. aaw must be notified. Once notified, aew will perform a complianCCl inspection. SECnON D.-JNFORMAL DrsPUTE PROCEDURE: ,. Builder should be aware ihat the Umiled Warranty Agreement provides for an Informal dIspute settlement and arbitra- tion procedure to-resolve complaints by purchasers under rhe Umited Warranty Agreement Bunder should become familiar with the settlement Procedures In order to be aware 01 Its rights and responsibilities. Bunder agrees to coop.. erate tully in the procedure and to be bound by and to comply with any decision 01 an Independent third party. or arbi- trator. If the Builder fails to perform its obligations hereunder if) a timely and good and workmanlike manner. such fail- ure shalf be oonsidered to be a refusal to perfonn governed by paragraph C.2 hereof. 2. The Builder agrees to pay all fees charged in connection wlfh the informaJ dispute settlement and arbitration PI'OCe- _ dures. SECTION E~ TERMS GOVERNING OPERATION AND INTERPRETATION: ,. SuDder agrees to perform its obligatiri under this Agreement In a timely manner. However, time- provided for per1or. mance of obligations hereUnder shall be extended by events not subject to control by the peF$Of'l Obligated to perform. Such events include acts of God or the pUblic enemy, or riot. civil commotion or governmental condUCt. , 2. Descripllve headings as to the contents of particular PlO\lfslons of !his Agreement are inlended for convonlence DnIy and are not to be considered in construing thrs InstnJment. 3. This '\llreernent shall not COI1SIIIule or be COI18idered an agency, employe--employee reJatJons~Ip. Joint VentlJte or pert_ nersh,p between the Parlles. None of !he P8rtles. not any 01 their emp/ayees or agenls, shalf have the authority ID bind or obDgate the other: party exce,:lt as provided by this Agreement 4. Should any provisions of this Agreement be determined by a court of competent juriSdiction to be unenforceable, !har detelTRination will not affect theva'idity of the remaining provisions. 5. This Agreement shall be InIetJ>reted and enforced In accordance with the laws of Ill. c:ommo.-.ith 0' PennsyM"la All suits Instituted under thIs Agreement shall be brought in PennsyI\1ania in a court of competent JUrisdiction. BuDde; hereby consents to the personal jurisdiction of the PennSYlvania courts. _ . 6. Builder shalf not assign !his Agreement without the prior written consent of QBW. 7. ThJs Agreement is a conU'actual undertaking between CBW and Bwlder. The Insurer is an intended thIrd party benefi- c/a1Y. It is the express Intent of 'lhe parties hereto that the dUE/es, oblIgations. terms and condit1Qns agreed to herein shall directly inure to the benefit of the Insurer identified hereIn as an Infended thfrd party beneficiary. QaW shall have .. . . . s::.u r.c.r..1.D ,",v. U41l4/U;l, _-!:.JI~'!.~~...I.~ 'lO","'U~ b1UHL..ll T .l:lUlL.l.lt::~S WARRANTY 'C:I"""'V I the right to enforce the Insurer'S rights under this Agreement. It IS also, expressly Intended by the parties hereto that the Insurer shall have the right and authority to enforce the terms and .condltions of this Agreement, and in furtherance of its interests. enforce duties and obligations arising hereunder of the respeotive parties and the duties and obllga- . tlons under any other oaw Umited Warranty Program documents relared to the intent. purpose and scope of thIs Agreement. , caw is the AdminIstrator of the Warramy Program. Q8W is not the warrantor under the Umited Warranty Agreement, nor is it the Insurer of the Bullder's performance under the terms of the Limited Warranty Agreement. Only the Insurer is responsible for performance of the LImited Warranty Agreement in thQ event of Builder default. 8. This Agreement shall Inure to the bene1it of and be binding upon the heirs, exeoutors, sdmi11;strators. assignee, and successors 01 the representative parties. 9. This instrument. and security documents and documents retetred to or incorporated herein by referenoe, contains the entire agreement between the parties. and no statement. promises. or lI"1ducements made by eJther party or agent of either party that Is not contained in this written conVact shall be valid or binding; and thls contract may not be enlarged. modified, or altered except In writing signed by the panJes and endorsed hereon. '0. Failure of either party to Insist upon compliance with any provisIon of this Agreement shall 1':01 constitute a waiver ot that provision. , ,. All notices required hereUllder must be In writing and sent by certltled mall, postage prepaid. return receipt request- ed, to the recipient at the respective address shown below, or 10 Whatever address the party may designate In writ- ing. 12. The effective date of this Agreement shall be the date of execution by Q8W. By QlJAIJ1Y BUI~ CORPORATION APRIL 16, 2003 . ?17 7J? 4288 , . r P. e5t'08 Date of execution by QBW:_ . 40338 BUilder's Registration No.: DATE By , Ed Peete Company (Name af BUilder. please' print or type) -~~; / , . " (SIgnature of AllIharlzed Representative.. ntle) &/WaJ'j Co fee.te, frpsiJe.1l1 (Prase Print nameIIitIe of e.xeeutDr) 3240 Wilson Blvd Suite 100 Arlington, VA 22201 (Address) BUILDER: , " .~ -"., , ~- , .&i'I1.i bit d- oJ,,' ..,.., "''''' - :. . oJ' ~ ..._ AMENDMENTTOBUlLDERAGREEMENT This Amendment, is between Quality Builders Warranty Corporation (QBW) and ED PEETE COMPANY, referred to as uBtrilder". Builder is a member in the QBW 10 Year Limi~d Warranty Program. QBW and Builder desire to modify the term of the Builder Agreement QBW and Builder, in exchange for the mumal ~ovenants contained herein anciintending 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 submit for enrollment . , homes which Builder or :any ~liate c~~ts during thai. time. Builder may not terminate his participation in the QBW Program within that period uniess consented to by QBW in writiIig. 2. Builder shall pay an annual membership fee. . 3. Builder's rate ~l be lowered to $1.80 per-thousand. The rate win remain ir. effect for the period of this Amendment. The Amendment will renew for a like term unless thirty (30) days prior to the expiration of this teml or any extensions either party provides the other :hirty (30) days advance written notice that they intend not to ext~d the period entWing. 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 oUTt'ent tchn. . 4. If in the Unfor~een event of a rate increase, caused by Legislation, or situations beyond ~he control of QBW, Builder has the right La terminate participation. 5. If the ter:ms contained in this Amendment arc inco~~istent with the Builder Agreement, the telmS of this Amendment shall govern. IN WITNESS WHEREOF. thc parties hereto have caused this Amendment to be executed by thcir duly aUrhorized officers, as of this 17lh day of April, 2003. QUALITYBUlIJ)~7 CORP. BY: ~ EDP&L~~ANY BY: ~ - \ " VERIFICATION I, JORDAN F. OLSHEFSKI, Vice President of Quality Builders Warranty Corporation, hereby certify and state that the foregoing Amended 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: ~l~ ~, :;)-OOb Quality Builders Warranty Corporation By: _~_~. Jo dan F. Olshefski, Vice President " CERTIFICATE OF SERVICE I HEREBY CERTIFY that I served a copy of the Amended Complaint was sent via U.S. Mail, first class postage prepaid, which service satisfies the requirements of the Pennsylvania Rules of Civil Procedure, addressed as follows: Cohen Seglias Pallas Greenhall & Furman PC Jennifer M. Horn, Esquire United Plaza, 19th Floor 30 South 17th Street Philadelphia, P A 19103 Date: t./'a' 1,. CJ-cc~ ~~. Marg orrison, Secretary ~ -.. ,1 --1 '1 PRAECIPE FOR LISTING CASE FOR ARGUMENT (Must be typewritten and submitted In dupReate) TO TIlE PROTHONOTARY OF CUMBERLAND COUN1Y: Please list the within matter for the next Argument Court. ----------..-------------------..-------------..-----..------------- CAPTION OF CASE (entire caption must be slated In full) Quality Builders Warranty Corporation (plaintiff) VS. Ed Peete Carq:lany (Defendant) No. 3139 06 Tcnn 1. State matter to be argued (ie., plaintiff's motion for new trial, defendant's demurrer to complaint, etc.): Defendant · s Preliminary (jJj actions to Plaintiff' s Amended Catplaint 2. Identify CO\IIIICl who wiD orgue cases: (a) for plaintiff: John A. Gill, Esquire (Name and Address) 325 North Second street, ~eysburg, PA 17043 (b) fur defendant: Jermifer M. Horn. Esauire (Name and Address) United Plaza 30 S. 17th street. 19th Flnnr Phi1"n..lphia,PA 19103 3. I will notify all parties in writing within two days that this case has been listed for argument 4. Argument Court Date: September 6, 2006 Date, Julv 24. 2006 Ed Peete Carq:lany Attorney for 4 =1 p,:' c !'"" . COHEN, SEGLIAS, PALLAS, GREENHALL & FURMAN, P.C. BY: MARIAN A. KORNILOWICZ, ESQUIRE JENNIFER M. HORN, ESQUIRE IDENTIFICATION NOS.: 43776/79721 United Plaza 30 S. 17th Street, 19th Floor Philadelphia, PA 19103 (215) 564-1700 Attorneys for Defendant Ed Peete Company QUALITY BUILDERS WARRANTY CORPORATION 325 N. Second Street Wormleysburg, PA 17043 COURT OF COMMON PLEAS CUMBERLAND COUNTY, PENNSYL VANIA CIVIL ACTION v. NO: 06-3139 ED PEETE COMPANY 3240 Wilson Boulevard, Suite 100 Arlington, VA 22201 DEFENDANT'S PRELIMINARY OBJECTIONS TO PLAINTIFF'S AMENDED COMPLAINT Defendant Ed Peete Company ("Peete"), by and through its attorneys, Cohen, Seglias, Pallas, Greenhall & Furman, P.C., hereby preliminarily objects to the Amended Complaint of Plaintiff, Quality Builders Warranty Corporation ("QBW"), pursuant to Rule 1028 of the Pennsylvania Rules of Civil Procedure, as follows: I. Procedural & Factual Background 1. The within action was instituted by the filing of an amended complaint on or about July 5, 2006 in the Court of Common Pleas of Cumberland County. 2. In its Amended Complaint, QBW alleges a contract was created between it and Defendant Peete on or about April 14, 2003. (Amended Complaint ~ 3). 3. This contract is entitled "Builder Agreement" ("Agreement") and is attached to the Amended Complaint. (Amended Complaint Exhibit" I "). , 4. QBW alleges that on or about April 17, 2003, QBW and Peete executed an Amendment to the Builder Agreement which extends Peete's obligations under the agreement through April 17, 2008. (Amended Complaint ~ 4). 5. The Amendment to the Builder Agreement is attached to the Amended Complaint. (Amended Complaint Exhibit "2"). 6. QBW alleges that Peete breached the Agreement by failing to enroll all homes as required within the agreement. (Amended Complaint' 5). 7. QBW seeks injunctive or, in the alternative, monetary relief for Peete's alleged breach pursuant to the terms of the Agreement. (Amended Complaint' 9, 10). 8. QBW's claim for monetary damages is based upon Peete's alleged failure to enroll homes it has already constructed as well as speculations that Peete will fail to enroll homes on which construction will be completed between now and April 17, 2008. (Amended Complaint ~ 10). II. Preliminary Objection in the Nature of Failure to Conform to a Rule of Court, Pa.R.C.P. 1028(a)(2) 9. Peete incorporates the preceding paragraphs as if set forth at length herein. 10. The Pennyslvania Rule of Civil Procedure that sets forth the form of pleadings dictates that "[ e Jach paragraph shall contain as far as practicable only one material allegation." Pa.R.C.P 1022. II. Paragraph II of QBW's Amended Complaint contains four material allegations, referring to: (i) QBW's alleged entitlement to specific performance, (ii) the calculation of QBW's monetary damages, (iii) the speculative nature of calculating the number of homes Peete 2 , will construct through April 17, 2008, and (iv) the speculative nature of calculating the selling prices of such homes. 12. As a result of QBW's nonconformity to the Pennsylvania Rules of Civil Procedure, Peete is unable to prepare an adequate responsive pleading to QBW's Amended Complaint. WHEREFORE, Defendant, Ed Peete Company requests that the Court enter an order sustaining its Preliminary Objections and striking QBW's Amended Complaint. In the alternative, Peete requests that this Court order QBW to amend its Amended Complaint to confonn to the Pennsylvania Rules of Civil Procedure. III. Preliminary Objection in the Nature of Legal Insufficiency of Pleading (Demurrer) Pa.R.C.P. 1028(a)(4) 13. Peete incorporates the preceding paragraphs as if set forth at length herein. 14. QBW, in paragraph 10 of its Amended Complaint, asserts a claim for monetary damages in excess of$35,000. 15. These damages include QBW's loss of warranty fees due to Peete's alleged failure to enroll the four properties named in paragraph 51 ofQBW's Amended Complaint as well as QBW's loss of future warranty fees through April 17, 2008. 16. QBW would only be entitled to damages stemming from the loss of future warranty fees if Peete were to breach the Agreement in the future by constructing new homes and failing to enroll them in the warranty program. 17. As a matter oflaw, QBW's Amended Complaint cannot make a damage claim for breach of contract when it alleges that such breach has not yet occurred and may never occur. 1 These properties include Joule, LLC, 245 Shirlington, LLC, Bromptons at Cherrydale, LLC, and The FilIrnore, LLC. 3 , See John B. Conomos. Inc. v. Sun Companv. Inc., 831 A.2d 696, 708 (pa. Super. Ct. 2003) (holding that breach of contract actions can only sustain claims for actual damages that either directly result from a party's breach or would be reasonably foreseeable as a result of that breach). 18. Therefore, QBW's claim for future damages, which would result only from potential breaches of the Agreement through April 17, 2008, is a claim upon which no relief can be recovered. WHEREFORE, Defendant, Ed Peete Company requests that the Court enter an order sustaining its Preliminary Objections and striking QBW's claim for monetary damages which QBW has not yet sustained. IV. Preliminary Objection in the Nature of Legal Insufficiency of Pleading (Demurrer) Pa.R.C.P. 1028(a)(4) 19. Peete incorporates the preceding paragraphs as if set forth at length herein. 20. QBW requests that the Court require Peete to specifically perform its obligations under the Agreement by ordering Peete to enroll all homes it has constructed and may construct through April 17, 2008. 21. QBW avers that the Agreement includes a clause stating that, in the event of breach, "QBW may seek specific performance or other appropriate relief in legal or equitable proceedings."z 22. QBW requests, in the alternative, that damages accounting for its inability to recover warranty fees be granted to compensate QBW for losses it has sustained and will sustain 2 For the sake of accuracy, counsel for Peete would like to note that paragraph 8 of Plaintiff's Arnended Cornplaint rnisquotes the language ofthe Agreernenl. Section B5 of the Agreernent states, "If Builder fails to enroll any eligible home as required by this Agreement, QBW may seek specific enforcement Dr other appropriate relief in legal or equitable proceedings..." (emphasis added). 4 , in the future. 23. The Pennsylvania Supreme Court disfavors the use of equitable relief in contracts when an adequate remedy at law is available. Clark v. Pennsvlvania State Police, 436 A.2d 1383, 1385 (Pa. 1981). 24. There is an adequate remedy at law when there exists a "method by which the amount of damages can be accurately computed or ascertained." Id. 25. Warranty fees associated with the homes located at Joule, LLC, 245 Shirlington, LLC, Bromptons at Cherrydale, LLC, and The Fillmore, LLC can be accurately computed or ascertained based on approved construction specifications and unit prices. 26. QBW does not have a valid claim for damages resulting from Peete's potential future breaches of the Agreement, the very damages which paragraph 11 of QBW's Amended Complaint deems speculative and unascertainable. 27. Therefore, in recognition of the Pennsylvania Supreme Court's refusal to apply specific performance when an adequate remedy at law exists, relief under QBW's claim for specific performance of the Agreement cannot be granted. 5 WHEREFORE, Defendant, Ed Peete Company requests that the Court enter an order sustaining its Preliminary Objections and striking QBW's claim for specific performance of the Agreement. . 0 ILOWICZ, ESQUIRE N FER M. HORN, ESQUIRE United Plaza 30 S. 17th Street, 19th Floor Philadelphia, PA 19103 Attorney for Defendant, Ed Peete Company 6 CERTIFICATE OF SERVICE The undersigned hereby certifies that a true and correct copy of Preliminary Objections of Defendant Ed Peete Company was served via first class mail on July 24, 2006, postage prepaid upon the following: John A. Gill, Esquire 325 North Second Street Wormleysburg, PA 17043 COHEN, SEGLlAS, PALLAS GREENHALL & FURMAN P.e. BY: M AN A. RNI JENNIFER . HO United Plaza 30 S. 17th Street, 19th Floor Philadelphia, PA 19103 Attorney for Defendant, Ed Peete Company 7 r~'; ...-'-\ j~ ,- ~'-_/ C;,'l """,) . i :;.;~-, ..-' .' t~ \-, , , QUALITY BUILDERS WARRANTY CORPORATION, IN THE COURT OF COMMON PLEAS CUMBERLAND COUNTY, PENNSYLVANIA Plaintiff v. CIVIL ACTION ED PEETE COMPANY DOCKET NO. 06-3139 Defendant NOTICE YOU HA VB BEEN SUED IN COURT. If you wish to defend against the claims set forth in the following pages, you must take action within twenty (20) days after this Second Amended 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 Second Amended 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 LAWYER AT ONCE. IF YOU 00 NOT HA VB 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, PA 17013 (717)249-3166 QUALITY BUILDERS WARRANTY CORPORATION, IN TIlE COURT OF COMMON PLEAS CUMBERLAND COUNTY, PENNSYLVANIA Plaintiff v. CIVIL ACTION DOCKET NO. 06-3139 ED PEETE COMPANY Defendant ~ECOND AMENDgf) ~OMP~ AND NOW, this 1 day of August, 2006 comes the Plaintiff, Quality Builders Warranty Corporation <QBW) and files the within Second Amended Complaint against the above named Defendant and avers in support hereof the following: 1. Plaintiff is Quality Builders Warranty Corporation, a Pennsylvania corporation engaged in the Ten-Year New Horne Warranty business with its principal place of business situate at 325 North Second Street, Wormleysburg, Cumberland County, Pennsylvania, 17043. 2. Defendant is Ed Peete Company (Builder) is a Virginia corporation engaged in the new home building business with its principal place of business situate at 3240 Wilson Boulevard, Suite #100, Arlington, VA 22201. 3. On April 14, 2003, Builder executed a Builder Agreement in which Builder agreed to become a member in the QBW Ten-Year Limited Warranty Program. A copy of said Agreement is attached hereto incorporated herein and rnarked as "Exhibit 1". 4. In connection with its membership, Builder executed an Amendment to the Builder Agreement dated April 17 , 2003 in which Builder agreed to maintain its membership in the QBW Ten- Year Limited Warranty Program for five years to commence on April 17, 2003. 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. Builder is required to submit for enrollment all homes, which it constructs, 30 days prior to the start of construction. 8. The projects of which QBW is aware that Builder has not submitted for enrollment in accordance with its Builder's agreement are: A. Joule, LLC B, 245 Shirlington, LLC C. Bromptons at CherrydaIe, LLC D. The Fillmore, LLC 9, Said projects referred to in paragraph 8 have commenced construction. 10. The Builder Agreement states in Section B 5, "If Builder fails 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). 11. 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 the period April 17, 2003, to April 17, 2008. 12. 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 $35,000. 13. QBW is entitled to specific performance because monetary damages can not be calculated with any degree of certainty until April 17 , 2008, 14. Damages are based on the number of homes the Builder constructs and the selling prices of those homes. 15. It would be mere speculation as to how rnany homes the Builder would construct from now until Apri117, 2008. Additionally, the final selling prices of the homes would be speculative. 16. QBW also seeks attorney's fees as authorized by Section B5 of the Builder Agreement. 17, 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 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 judgment against Ed Peete Company as follows: That the Builder Agreement as amended executed by Defendant Ed Peete Company be specifically enforced to require Defendant Ed Peete Company to enroll all homes they construct for the period Apri117, 2003 through Aprl117, 2008, in accordance with the Builder Agreement as amended. In the alternative that Defendant Ed Peete Company be ordered to pay damllges equal to warranty fees which QBW was entitled to based upon homes projected for the period April 17, 2003 to April 17, 2008, said amounts to be in excess of $35,000.00. Attorney's fees as authorized by Section B 5 of the Builder Agreement. Such other relief as deemed appropriate by the court. Respectfully Submitted, ~~~~ Gill, Esquire- 325 North Second Street Wormleysburg, PA 17043 (717) 737-2522 #41532 Attorney for Plaintiff Quality Builders Warranty Corporation BUILDER AGREEMENT ,_.- 717 737< 4288 :~'. fxv-:.loi+ .t. 1W uu: P .1!12/88 ..... -...r......_~-:~_. -....-.... ...-- . --.' - t.:IIurll-~ J r DU1~U:}(~ ,wARRANTY , . ,..,.....-"" i :' ~ " VIRGINIA, AGREEMENT made this 14th day of APRIL ,20 03 . between CUALllY BUILDERS WARRANTY CORPORATION, a PennsylYania corporation. h!lll~jn referred to as 'QBW: Ed Peete Company Uberty Mutual, herllin referred to as "InSUrer,' and NBlNa cl auRc!lor.{lndltalo WhOlller a _on. pa'lnOlll/Vp,lntlivldu>l or_) ,of 3240 WiIsonBlvd Suite 100 Arllilgton. VA 22201 """'... .' herein referred io as 'Builder.' S.... :Z;o SEcnON A. MEMBERSHIP AND T.ERM: ,. caw administers a program whereby home builders registered with oaw enroll homes they construe! In the program and pulchasers 01ll1OS9 homes are protected by a warrantY against aertaln specified defects. 2. In order to develop and maIntain a good reputatlon lor prOlliding preteetl.on to purchasers of welf-bullt homes, CBW protects and promotes fts good.will tly careful selection of builders to partlclpate in Its warranty program. 3. avDder desires to participate In OBWs warrantY program and, 10 that end. agrees to abfc/Il bY the provlsiOl'll; of this Agreement and to conform its bahavior to the sTaTldards expressed herein aild in the Umited Warranty Agreamenl. Builder warrants lhat all Information supplied to oaw In connactlon with its application Is true and OOI'J'llct. 4. All registration fees (lnitlal and annual rescreening) are set by aBW at'its discretion and ers non-relundable. 5, OBW. upon executlng this Agr~ent. has aooepted Builder as 1'1 member of Its warranty program. subject to the Builder's contfnulng performance of Its obligatJoll under thIs Agleemem. . 6, Bunders membership shall commence on the date of Executlon by oaw and shall continua IM'ltil terminated by Iilther PartY In accordance with the terms of this agreemem. OBW reserves the rfght to rescreen BuDder ennual~ 11 caw detsrmlnea that Builder. does not meet Its' app/'C\lal s13ndan:ls upon lescreenlng then aBW may terminate Builder'8 membership and the provlslone 0/ SeOllon B. paragraph e, shal' be In effect. . SEcnON B. HOME ENROLLMENT: . . .' 1. Requirements. As part ollis participatJon In 'QBWs warranty program. ~ject l\) QBW's ~plance, Buildatagrees to enroll in the program eve,., home Builder. Sullder's Principals. or any entlly under Bulldn. or Builder's Prlnclpals commCn control, constructs In any slate In which caw operates and agrees to pay all tees requfrad by9aW h the enrollment process. whlch'feell shall be nl?n-refundable.. .'. .. .' . . 2, ProcedUres.. Builder agrees 10. enroll Its homes according to procedures established by (BN. BUilder may enrol homes cunently under construC1lOri and homes completed but not sold or occupied' (as oflhe date of this Agreement or the date of reacceptance following a perIod 0/' suspenslon or non-pe.rtlclplltion) provided tl;lat enrollment is made WI1hIn 45 da)l!l of execution of this Agreement or raeccep!ance. and OBW haS lnspllCted and applO\lad the home. . HDmBS which remain In a BulJder's inventory longer than 18 months m\J8t be enrolled by Ihs end of the 19th month !rom c:onstnIeIIon slari: date to qualify ror enrollment. The 'MIIfOfI\Y wm be Issued to the Builder anclthe unexpIred por- tlon ot the warranty wrll automatically transfer to the purchaser. When enrolling other than a detached sfngle family dweUlng. Builder shaD enroll each Individual unrt of atV{ multi. unIt dwelling such as, but not limited 10, duplexes. townhouses and condomIniums. . . For eaclr home enrolled. the BuDder shall pay a wanantyfee as dGtermlned by QBW within the tfme periods e&tab- lished by QBW. All warranty fees are non-refundable. A minlmum warranty fee of S1OO,00 shall app~ QBW wiD provide Builder with a copy of the Umiwi 'NarrarJrJ AgIeement and EnroDment Form. Builder and pur- chaser must complete, sign the E/lrollment Form a1 closIng, and Builder agrees to fUrnish OBW wlth a oopy d the signed Enrollment Form within ten (10) days of cloaing. Builder agrees not to charge the purchaser directly the cost of lIle enrollment fee. A home will not be considered enrolled IR'ltil QffN receives and approves the fully executed and completed Enrollment Form, payment of all fees. and an applO\(9d flOW Inspection. . 3. Reservation of Power of Review. QffN reserves thll right to reject arrt home submJned for enroUmentIn the progam If (a) I/Ie Bulldar Is not a member In good etandlhg: 'tb) !he home is not.conatrucled In accordance with the Warranty Standards or building codea speclfled In the Umfted Warranty Agreement (0) the Bunder did not obseNe the ElIToll- ment procedlJles; (d) the 6ullder misstates or mlsreprasents any Informatlon; (e) the Builder In BnI WillI falls III comply '. with 1he rerms of this Agreement. .' .. . . '. 4. MsIgnmllnt of Rights. If a purchaser mas a Complaint pursuant to the Umlted WarrantY Agreement which the SIMer ~Is to. correct, the BUIlder hereby assigns \0 the insurer 0( QBW on behalf of the lns\Jrer.' as the Cese may be. any . rights which Bulkier may have against a supplIer. manufaClUrar. subcontractor or other person fa \Nork: pl!fformed .or mall!!rfaJs supplied In connBCtlon Ylilh that clarm, Builder agrees to cooperate fully with 0l!1N and lO provlde QSW with air informallon which it'requeslS perlalnlng'l\) the Claim. If BuIlder fails to so cooperate. Builder agrellS to compensate and IndemnIfy CBW for any damagea sustained by such lack of cooperation " . 5. Breacn and Remedy. If Builder rails to enroll arTi eligible home as required by this Agreement. OSW may seek eps- cific enforcement or other appropriate relief In legal or 1lqUllable proceedings. even If ibis Agreement has been tlllllll- natet!. Furthermore, BUilder agrees to.lndemnlfy and hold harmless OBW and Its Insurer for turf los$eS or an"j clan- ( " 7i 7 737 4200' 'l!JUUJ P.1l3/08 t.1J r~:t:.L"):; l,;u. .,.);~,) rA4-..'U:'.. 'll);) ."u,"....~'-1.11 J::IIJ.1Ll.1.t;1'"C:l !.ijHt<J-tANTY ViiI J,lil' UoJ . , , , :/"-\---. i , ". ~~ ages CBW may suffer as a resuit of Builder's breach at this Agreement and suon Josses and cOSts shall Include rea- sonable allorney's fees and expen witness rees, Builder hereby irrevocably authorizes and empowers any attorney or any coun of record 01 Pennsylvanla or else- where to appear for and confess Judgment against Builder/or all amounts for which Builder may become nabla.to QBW for Ihe breach of this Agreement. as evidenced by an affidavit signed by an officer of C8W selllng lorth the amounts then due, plus attorney's fees Incurred by CBW. with coSts of suit and release olerlors, Sllch authority shall not be exhausted by anyone exercIse thereof but Judgment may be confessed as aIornsald from time to time as otten as tI'1ere is a default. . . Remedies statsd herein are elective and not e.xcJusiVe and CBW may elect to proceed under this or any oCher paragraphln this Agreement.. .. . . S. suspension or Termlnllllon. CBW may tarmfnate. or at lis option suspend. Builder's partioipation In QSWs Warranty Program. ~.any entIty or IndMdual with whloh BUilder is affiUated. If CBW determInes that Builder has done err{ of the following. which shall be deemed a breach of ltIis Agreement: (a) falls to comply fully with all provrsrons of lhls Agreement (b) tails 10 per10rm any of its obligations under this Agreement. including, but not "miled to. cQoparatlng in tha opera- tion of the program's Informal dispute resolution and arblll"ation Plocedul1l: (c) fails to respond to oaws notlce of a homeowner's complaint; (d) lalls 10 oomply with a decision Which Is rendered pursuant to comp\a!nt procedure$; . (e) faUs to provide adequate assurance to oa,?, within ten (10) da~ after it reoeiVes a written request from oaw lor such assurance that (Within a reasonable timetable established or approved by OBW) it Is wllDng and able to coop- erate In dlspule settlement and to perfonn the obligations under flro/ decision whloh is rendered pursuant 10 such procedures: . [f) falls to othelWlse cooperate In the operation of the C8W Program In accordance with the rules and l'8llulatlons of the OSW Program: . (g) lalls to provide Umely proot of compliance with this Agl1lemenl as and when requested by 08W: (h) fails to comply with CBW Warranty Slandards and building codes as stated in the Umlted Warranty Agreerpent; (I) falls to oomply with the enrollment proceduree eslabJlshed by OSW: Q) fans to provide proof that enrolled hooles have been subjected to required inspections; . (k) fails to respond to purchaser complaints In a timely manner. and as pl'O\IideCl iri the Umlted Warranty Agreement .(1) falls 10 perfoil'll its obligations willi professional competence or cDnduct 118 operations !rom a position of lInancial . strength and stability:. . .. . (m) iaJls:to notify CBW within 30 days-of a.change In rmnershlp, company' nllIlle or company SiWldlng, IInanclel con. dition, -or of any other maleriallact wIllch rnIghl"affeot BuDder's ability to meet Its obligations under this Agreement: (n) fails 10 meet ethlcal standards in Its dealings wllh customers; or. . .. . (0) mIsstates or misrepresents any information In connection with lis application or.1n the rescieenlng process, OBW.reseNe~ the option to relnSlatatl!1Tlllnated afllDmes of llIe primary. terminated BuDder If aaw dellllllllnes Chat 1he terminatetl BuDder Dr its principals are not In a poslllon 10 controIltls ailIllated BuDder. . .' . . Termlnallon 01 Builder by aBW shall not affect !he rights or obllga1lons. of $1l'J o"lI1e parties ro. thIs Agreement with respect 10 the Warranty progtam In effect at the dale of termination, SUbJect 10 lhe provislons pertaining to voIdibnily. . II II. Builder is, suspended Or terminated. l'1e shall not represent himSelf to be a member of the caw Watranty Program nor offer the oaw Warranty and shall not use its Logo or refer to the progl'lllll In any WEt{ nor attempt to enroll any home. The Builder shalllmmedlmly nollfy any Buyer currently under contract ro purchase a home of the SUSpen- sIon Dr rennlnallon and that the CBW Warranty Program has been withdrawn. Upon request. Builder shaIIlrnmedlate- Iy return to QBW all materials supplled by CBW and all malellals making reference to oaw. Should Bullder fall to take these sleps.lt shaIIlndemnjfy and hold harmless caw and the Insurer agalnst any and allllXpenses Incurred ancIloss- es suffered. Includlng but not \ImI'ted 10 attorney fees. by either of tham as a result. In addition. Builder shall rRllnter- &Sl1O oaw at the rate of 18% per amum on all sums duetoQBWl1ereunder!fsuch st.mS are not paId within 30 days or demand by Q8W. . . . BuIlder may tennlnata this Agreement upon 30 days advanoe written notice 10 OBW. If so terminated by BlI\der or by aaw, Builder's obligations under this Agreement shall contlnue as to those /lomes enrolled during the perlocf fn which this Agreement was In effect.. . 7. No1k:e. II C8W possesses a reasonable befier that reason exisra to terminate or suspend a BuDder for violation dthls Agreement, arm may immedIately terminate or susPend the Builder by pTDYfdlng it wltll written notice. If aBW elects . to suspend the Builder, such. suspenslon will remain In effsct until Builder has cured .all defects to cews satlsladon. . however, .OBW reserves the rlght to.termlnate any suspended Bullder... . . a. Vofdllbllity. oaw reserves the rlght to \/Old any enrollment II Builder miSstates or misrepresents any Iilfonnatlon ~ Its application or in the rescreenlng process. or mlsstalBS or rrisrepresenlS any in1onn8llon In the enroilment 01 a pllIllc. u1ar home. or tails to rif1f any fees due for enrollment of any particular home, or falls to forward an Enrollment Forruler a particular home within 10 days as requIred, or IaiJs 10 enreO ell units of a multi unit building. ... . secnoN c. BUlLDeFI'S OBLIGAnONS: , , ConstnIctlon ob\igatlDnS. FoIIClNing are the Builder's obftgarfonS with respect to aaws Warranty Program: (a) Sunder shall constrUct all homes In i;onformlly with the Wananty Standards provided In lhe Umlted Warra,t::/ Agraement. andl or in conformity 'WIth apprcoJecl bul!ding codas and Other standards aslabJlslled by arm and In effect at ltle beginning of constructlon of !he enrolled home. OBW reserves the rlghts 10 estabnsh speqlal recMe- ments for escrow payments or other means 01 proteo!ion with respect to any homes constructed by Builder wHeh rftA 'UV .V~ ~UI~ I I U't/.L't/U~ ~1,);.4't :-;r --. "ow.:. ....wM'-... cv rp~~~ ~Hv~ ,pu...~t:I"(~ W ["\l"!'""'LJ ..... ....~. ~UU\ 7).7 73'i' .4288' p.e4/lilS I . QaW deterinlnes to be 'Hi9h'Risks/ . (b) Builder agrees to have all homes Inspected. as required by qSW. and to pay all fees lor the inspection and to pro- vide evide~e of IMpectlon as and .when required by oew. Of!NV. shall provide Inspectors or shall approve gov- ernmental ,nspectors: . .' . (0) QBW sh~ ha\/e \he right to perform spot Inspections to verIfy Builder's compliance with this Agreement and Builder agrees to cooperate. (d) The Builder agrees to Indemnify and. hold harmless QBW and/or Its Insurer for any losses or damages CSW and/or its Insurer may suffer as a result of the use of/ire retarc:lant treated plywood on any building eruolled underths CSW Ten Yeal Wanano/ Program. This wlll include all claims and llablDry for losses. damages and expenses which OSW and/or Its Insurer may sustaln, Incur. payor be liable fer by means of any Investigation settlement or litigation of any c1alm or aCtIon which may be raised, mede or brought due to the pO!,!nt!al defects caused. or lIkaly to be caused by Use of the subJect plywood.. . . (e) If the Builder Is informed by QBW that it Ie building In an area designated as one with active eoll concfrtlons. the Builder agrees to obtain such soDs Investigatlons and reports as may be required by QSW. If such reports Indicate a need lor special foundation desIgn. the Sullder agrees to construct the foundaticn according to the design of a registered professional engineer to take Into aocount the conditions dlsclosed by the soil tests. 2. Warranty Obligations. Builder agrees to perform all obligations arising from this Agreement and the Umiled Warranty Agreement. The Builder shall at its own expense perform all Obligations as set lorth in the aaw Warranty Program and this Agreement. which Includes meetlng the warranty standards uporl' notice Irom !he Purchaser without the necesslty of caw Intervention. During years one and two under the OSW Warrant-! Program. if Ihe Builder falls or refuses to perform its obligations In accordanoe with tha Umfted Warranty Agreement or this Agreement, the Insurer. or QBW on behalf of the Insurer, will perform the Builder's obligations. however. the Sullder agrees to reimburse oew and/OI Insurer for all expenses Incurred In performing their obllg~ons. Including but no! limited to. cost of materials. cost of collection, labor. architect's . fees. engineering fees' and counsel fees." oew atldIor Insurer reserve all rights of subrogation. During years three through ten under the oew Warranty Program. Insurer, or OaWen behalf of Insurer. wiD perform Its obligations with. respect 10 major strUotural' defeel! as set forth and defined in the Umitlld Warranty Agltiment without the right of subrogation against the Builder provided that the defect. or symplllms ot the subeaquent occurrence of the detecllirsl arose after the expiration of two y&1llS under the caw Warranty .Ptogram In elfectlor that home. al'l~ that Bunder dld not attempt to conceal or cosme~cally repair the defect or symptoms of the subsequent occurrence of a defilcrand that the defect does not arise from Builder'll faBure \0 COflStnlct 1he home to applicable CSW standerd4 or. adhere to Bulldsr's.responsfbIliUes under the Bunder Agreemeni. '. . . It the Builder repairs a inejon~truclUraf defect during years one or two. QBW IlI\.Ist be noOOed. On~e notlfled.OBW will per.form a compRancs Inspection. . . . sEC110ND;'JNFORMAL DISPUTE PROCEDURe: '. . , . Builder should be aware !hat ttl& LImited Warranty' Agreement provides for an Inlorrnal dispute settlement and arblll'a- 'tlon procedure to.resolve complaints bY purchasers under the Umlted Warrano/ Agreement BuIlder shoUld become fari1llfar with the settlement procsduies In order !o be aware of Its r\gIIlS Brld responslbiUtles. BuDder agrees to coop- erate tully in the procedure and !o be bound by and to comply with any decision aI an Independent third party, or arbi- trator. It the Builder fails. to perform Its obligations hereunder lr1 a timely end good and workmanlike manner. sucl1 fail- ure shall be considered to be a refusal !o perfonn governed by paragraph C.2 hefQOf. 2. The Builder agrees to pay all fees charged In connecUon wllh the Informal dispute settlement and arbitration proce. . dures. .. . .' SECTION E. TERMS GOVERNING OPERATION AND INTERPRETATION: 1. BuDder agrees 10 perform ita obllgadri under this Agreement In a timelY manner. However, Ume- provided for perfor. mance of obRgatlons hel8under shaD be extended by events IlOl subjecl to control by the pel'$Ol\ oblsated to periorm. SUch events Include acts of God or the publlo. enemy. or riot, civD commotion or governmental conduct. ' 2. Descriptive headings as to ttIe oonte!Ita .of partlcular pl1)V\slon!l of lhls Agreement are Intended for convenIence o/'lly and are not to be considered in construing this InstnJrnenl. .' 3. This Agreement sh8Il not CQ!1SlJtute or be COI\8iclered an agency. employer-employee re)a\lonS~lp. )olnt venture or part- neishlp betWeen the panles. None aI the parties, nor any of their employees or agents. shall have the aU!holiry to bind or obllgata the other. party exceJ)t as prCIIlded bi this Agreement. . 4; Should any previsions of this Agreement be deterrJlined by a court of competent JuriSdiclfon' to be unenforceable.lhar determination will not affect the ''Jalidlty of \he remaining provlslons. . 5. Thill Agreement shall be Interpretect and enforced In accordance with !he laws !>f the Commonwealth otPennsyJvanla; All suits Instituted under this Agreement shall be brougtt 10 PennsyIiIenIa in a court of competent Jurfsdlctlon. BuIciar . hereby consents III the personal jurisdiction of the Pennsylvania courts. . . 6.. Builder shan not lISSlgn !his Agreement wl\hClut the prior written consent of oaw. 7. This Agreement Is a contractual undertakfng betWeen OBWand BuDder. The Insurer Is an Intendecl1hfrd paflY belltfl- cIllf\4 It Is the express Intent of 1he parties heralD that lhe duties. obUaallons. terms and conditions agreed to hers!n shall dlreotly Inure to the. benefit of the Insurer Identl1led herein as an Infended third party beneficiary. CSW shaIIl1ave r:.u rLCt-J.!:I VV. U4l14/U~. _V;';;.J.J'~~/.'!X; 'OO.::.V::. b1UNl...11 T I:>UIL.l.Jkor:;; WARRANTY I the right to enforce the Insurer's rights under this Agreement, It 15 also. expressly Intended by the parties hereto that the Insurer shall have the right and authority to enforce !he tei'l'ns anp .conditions of this Agreemen~ and In lurtherance of Its Interests, enforce dulles and obligations arising hereunder of the respective parties and the duties and obliga- tions under WI other aBW Umited Warranty Program documents related to the Intent, purpose and scope ollhls Agreement. . . aaw Is the AdinlnlstraloT of the Warranro; Program. aBW 15 not the warrantor under the Linu'ted Warranty Agreement, nor Is ~ the Insurer 01 the Builders performance under the terms 01 the Limited Warranty Agreemem:. Only the Insurer Is responsible for perlonnance of the Limited Warranty Agreement In the event of Builder default. 8, This Agreement shalllnura to !he benefit 01 and be binding upon the heirs, exeoutors. administrators. assignee., and successors of the representative parties. . 9, this Instrument. and secun1y documents and documents rsrefled to or incorporated herein by referenoe. contains the entire agreement between the parnes. and no statement, promises. or Inducements made 'rY'/ eJther party or agent 01 either party thatrs not contaIned in thIs written contfacl shall be valid or binding; and thls COOlract may not be enJarg ed. modified, or altered except In wriHng signed by the panJes and endorsed hereon. '0. Failure of either party to InsIst upon compliance with any provIsIon of thIs Agreement snaJl r.OI constitute a W2fver of that proVision. '1. All notices requIred hereUTIder must be In writing and sent by certltled mall. postage prepaid. return receipt request- ed, to !he reolplent at the respective address shown below, or to Whatever address the party may deslgnatelri writ- ing. 12, The effective dale of this Agreement shall be the date of exeClJtlon by QBW. By QUALffY BUI~ C_ON APRIL 16, 2003 71.7 ,737 ~28a P. as.rae r Date of execution by QBW: BuIlders Registration No.: 40338 /!JUILDE1I: By Ed Peete ~alP8l1Y (NaIDa ot BuDder. pIeB8e' )llInt IIr type) '~. .' . ( . (SIgnatula of A . . Representa1Jve -llIIe) &lWarJ c. recta . PrpS/~-eI\-r (P1eas8 pmt lIIlIIIllIIitIa 01 elCeCUlor) 3240 WilsouBlvd SUite 100 ArJingtoD, VA 22201 (Addresa) DATE ADDENDUlY! ED JEm'EOlMPAMY. 'IHl.BROMl'TON8AT CBERJtY.D.Wl',l1.C, 'JDBll.OMP1'OllSA.T\;UllJdBOllSl,LLi':., A1'IPlOlI. THE BIlOIl1l'1'OMS AT COURTaOUSllI, u.c., liability Ik._.der!ball be joint.t lIt'YmI 'WIIfch 1DcIlldes.&Y ~~ - 4/14/03 . . PrI:lldent..,Jill)Pu:r:lCOM!'ANY. .. Pate I F.~-~~' :1''1101 Fi-6C.M~1\. ~/ ~. It!\Lt/o'j. :~:~~/I~03 f~ JtI~ 0tIa1lly Builders WanaJlty CoIpordllll . oewfOfIM_llIOl .. 4D3~ll . leg' 40341 . bgl 4ll!4:2 RtgI# 40343 ~ ",. "'... ....... -:....,. ,....~ I....,~ .,...., _~'_ .,.... -- .--- ..... .f.~.', qViib+ ~?Ed- AMENDMENT TO BUlLDERAGREEMENT This Amendment, is between Quality Builders Warranty CoI})OIation'(QBW) and ED PElITE COMPANY, referred to as."Bbilder". Builder isa member in the QBW 10 Year LimitM Wammly Program. QBW and Builder desire to' modify the tenn ofthe Builder Agreement QBW and Builder, in exchange for the mutual ~ovcnants cOll1ained herein and;intending to be legally bound baeby agree as follows: 1. Builder shall, maintain its membership in QBW's Limited Wammty Program fot an . . . . add:itioniU period of :live. (5) years to commence upon the below date and submit for e;m-ollment homes which Builder or :any ~ c?~ during tbal ti:me, Builder may not terminate his participation in the QBWProgram within thatpcriod uniess consented to by QBW in writing. . 2. Builder shall pay an annual membership fee. . 3. Builder's rate ~ be lowered to $1.80 pcrthousand. The rate wm remain iI: effeet for the perIod. oHllis Amendment. The Amendment will renew. for a like term unless 1hiII.y {30) days prior to the expiration of this teIlll or my extensions either party provides the other :hirt:y (30) days advance Written notice that they intend not to extend .the period entiding. the Builder to a . . . I '. low,ef rate. fi Builder provideS notice, QBW 'WJ11 adjUst the Builder' s ~te upward effective at the . . . ,end of the then current tchn. . 4.. If in the \mfor~een event of a rate increase. caused by Legislation, or situalions . beyond !-"he control of QBV(, Builder has the right to lI:.riIJimte participation.. 5. If the tCt:ms con1ained in this Amendment arc inc~t with the BUilder Agreement, the tenDS of this Amendment shall govern. . IN WITNESS WHEREOF, the parties h=to have caused. this Amendment ito be executed by their duly a~ officers, as of this 1~ day of April, 2003. QUAUIYBUlLDBRS W~ CORP. BY' ~. ED''''~ANY ..~. BY: ~ - 1 VERIFICATION I, JORDAN F. OLSHEFSKI, Vice President of Quality Builders Warranty Corporation, hereby certify and state that the foregoing Second Amended 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, Quality Builders Warranty Corporation Date: t /q!Ob By: 1+0 Jordan F. Olshefski, Vice President CERTIFICATE OF SERVICE I HEREBY CERTIFY that I served a copy of the Second Amended Complaint was sent via U.S. Mail, first class postage prepaid, which service satisfies the requirements of the Pennsylvania Rules of Civil Procedure, addressed as follows: Cohen Seglias Pallas Greenhall & Furman PC Jennifer M. Horn, Esquire United Plaza, 19th Floor 30 South 17th Street Philadelphia, P A 19103 Date: ~/" 16<- '--rn~ MiMA ...~ Marg Onlson, Secretary q r;. ..-r:;~'. n.1',f'\". , ::: ~ ;;:: (0 ~~.(l 'o'~':': ) :FC: "7' 2 ~ ","> ",- ~ G~) , ..0 ..., ::J' r:-? N c..;. Q, .-\ ~"JJ ~9r:n :0'9 (:3{~) :J:::A O~ >".0 ~rf1 ::::.. ~ COHEN, SEGLIAS, PALLAS, GREENHALL & FURMAN, P.C. BY: MARIAN A. KORNILOWICZ, ESQUIRE JENNIFER M. HORN, ESQUIRE IDENTIFICATION NOS.: 43776/79721 United Plaza 30 S. 17th Street, 19th Floor Philadelphia, PA 19103 (215) 564-1700 Attorneys for Defendant Ed Peete Company QUALITY BUILDERS WARRANTY CORPORATION 325 N. Second Street Wormleyburg, PA 17043 COURT OF COMMON PLEAS CUMBERLAND COUNTY, PENNSYLVANIA CIVIL ACTION v. NO: 06-3139 ED PEETE COMPANY 3240 Wilson Boulevard, Suite 100 Arlington, VA 22201 DEFENDANT'S PRELIMINARY OBJECTIONS TO PLAINTIFF'S SECOND AMENDED COMPLAINT Defendant Ed Peete Company ("Peete"), by and through its attorneys, Cohen, Seglias, Pallas, Greenhall & Furman, P.C., hereby preliminarily objects to the Second Amended Complaint of Plaintiff, Quality Builders Warranty Corporation ("QBW"), pursuant to Rule 1028 of the Pennsylvania Rules of Civil Procedure, as follows: I. Procedural & Factual Background I. The within action was instituted by the filing of a complaint on or about June 1, 2006 in the Court of Common Pleas of Cumberland County. 2. Since June I, 2006 Plaintiff has amended its Complaint twice; once on July 6, 2006, and most recently on August 7, 2006. 3. In its Second Amended Complaint, QBW alleges a contract was created between it and Peete on or about April 14, 2003. See Second Amended Complaint at ,-r3. 4. This contract is entitled "Builder Agreement" ("Agreement") and is attached to the Second Amended Complaint. See Second Amended Complaint at Exhibit "1." 5. QBW alleges that on or about April 17, 2003, QBW and Peete executed an Amendment to the Builder Agreement which extends Peete's obligations under the agreement through April 17, 2008. See Second Amended Complaint at '11 4. 6. The Amendment to the Builder Agreement is attached to the Second Amended Complaint. See Second Amended Complaint at Exhibit "2." 7. QBW is seeking injunctive or, in the alternative, monetary relief for Peete's alleged breach pursuant to the terms of the Agreement. See Second Amended Complaint at ~~10, 12. II. Preliminary Objection in the Nature of Legal Insufficiency of Pleading (Demurrer) Pa.R.C.P. 1028(a)(4) for Failure to Satisfy the Doctrine of Ripeness. 8. Peete incorporates the preceding paragraphs as if set forth at length herein. 9. QBW avers that Peete is required to enroll "every home Builder, Builder's Principals, or any entity under Builders or Builder's Principals common control constructs" in the QBW Ten-Year Limited Warranty Program. See Second Amended Complaint at ~ 6. 10. QBW alleges that Peete has breached its Agreement with QBW "by failing to enroll all homes as required." See Second Amended Complaint at ~ 5. 11. QBW, not Peete, however, drafted the procedures for enrolling homes in QBW's warranty program. See Second Amended Complaint at Exhibit" I." 12. According to Section B.2 of the Agreement, as builder, Peete, 2 f' may enroll homes currently under construction and homes completed but not sold or occupied [parenthetical omitted] provided that enrollment is made within 45 days of execution of this Agreement or reacceptance and QBW has inspected and approved the home. See Second Amended Complaint Exhibit "I" at Section B.2 (emphasis added). 13. Section B.2 further provides: Builder and purchaser must complete, sign the Enrollment Form at closing, and Builder agrees to furnish QBW with a copy of the signed Enrollment Form within ten (10) days of closing. Builder agrees not to charge the purchaser directly the cost of the enrollment fee. A home will not be considered enrolled until QBW receives and approves the fully executed and completed Enrollment Form, payment of all fees, and an approved final inspection. See Second Amended Complaint Exhibit "1" at Section B.2 (emphasis added). 14. In other words, QBW's inspection and approval of the home is a condition precedent and prerequisite to enrollment, and enrollment can not occur until the completed Enrollment Sheet is provided to QBW at least ten (10) days before closing. 15. If closing has not occurred and approved final inspection has not occurred, enrollment is not due. 16. QBW has failed to identify which homes - if any - in which enrollment is due. 17. If enrollment is not due, Peete is not obligated to enroll the units and thus, has not yet breached the Agreement. 18. In addition, to qualify for enrollment, Section B.2 provides that [h]omes which remain in a Builder's inventory longer than 18 months must be enrolled by the end of the 19th month from construction start date to qualify for enrollment. See Second Amended Complaint at Exhibit "1" at Section B.2. 19. The Agreement does not define "Builder's inventory" or "construction start date" 3 in the context of enrollment. 20. QBW fails to plead relevant construction start dates. 21. If a home has not been in the Builder's inventory for longer than 19 months, it has not yet failed to qualify for enrollment under the terms of the Agreement. 22. Any ambiguities in the Agreement must be construed against the drafter of the Agreement. Commonwealth Dep't of Transp. v. Mosites Constr. Co., 494 A.2d 41, 43-4 (Pa. Commw. Ct. 1985). 23. "The ripeness doctrine is a concept of standing premised on the notion that judicial machinery should be conserved for problems which are real and present or imminent, not squandered on problems which are abstract or hypothetical or remote." Van Doren v. Mazurkiewicz, 695 A.2d 967, 971 (pa. Commw. Ct. 1997). 22. The ripeness doctrine is a prerequisite for a court to examine the merits of a case. Treski v. Kemper Nat'} Ins. Co., 674 A.2d 1106, 1113 (Pa. Super. 1996). 23. In order for a case to be ripe there must be actual case or controversy at every stage of the judicial process. Richards v. Trimbur, 374 Pa. Super. 352, 358-360 (pa. Super. 1988). 24. The purpose of the ripeness doctrine is to prevent premature adjudications. Rouse & Assoc.- Ship Rd. Land Ltd. P'ship v. Pa. Envtl. Oualitv Bd., 164 Pa. Commw. 326, 331-33 (pa. Commw. 1994). 25. The court must consider whether the issues are developed for judicial review, and if any party will suffer hardship due to delay, Treski, 674 A.2d at 1113. 26. Therefore, in order to prevent premature adjudication of a merely speculative 4 hypothetical problem the Court should dismiss Plaintiff's Second Amended Complaint for failure to satisfy the doctrine of ripeness. WHEREFORE, Defendant, Ed Peete Company requests that the Court enter an order sustaining its Preliminary Objections and dismissing QBW's Second Amended Complaint with prejudice, because such claims are not ripe. III. Preliminary Objection in the Nature of Insufficient Specificity in Pleading Pa.R.C.P. 1028(a)(3) 27. Peete incorporates the preceding paragraphs as if set forth at length herein. 28. QBW's Complaint purports to set forth a claim for breach of contract against Peete. 29. QBW has failed to allege specific facts sufficient to support an allegation that Peete is in breach of the Agreement. 30. QBW has failed to specify the location of the homes constructed by Peete that were allegedly not enrolled pursuant to the Agreement and when enrollment was due. 31. Further, QBW has failed to allege the dates on which construction of said homes was commenced and completed. 32. The location and time of commencement of construction of the homes and/or condominium units that were allegedly not enrolled are material facts pursuant to Sections B(l) and B(2) of the Agreement. 33, Based upon the allegations contained in QBW's Complaint, Peete is unable to ascertain the basis or validity of QBW' s claim for breach of contract with sufficient precision to prepare a responsive pleading and/or prepare for trial. WHEREFORE, Defendant, Ed Peete Company requests that the Court enter an order 5 sustaining its Preliminary Objections and striking QBW's Complaint with prejudice. In the alternative, Peete requests that this Court order QBW to amend its Complaint to properly plead a claim for breach of contract, including in said amended complaint: a. any and all actions taken by Peete, which form the basis ofQBW's claim for breach of contract including all relevant and/or pertinent dates and locations; b. any and all omissions of Peete, which form the basis ofQBW's claim for breach of contract, including all relevant and/or pertinent dates and locations; and c. any other facts necessary for Peete to prepare a responsive pleading and otherwise defend against this claim. IV. Preliminary Objection in the Nature of Legal Insufficiency of Pleading (Demurrer) Pa.R.C.P. 1028(a)(4) for the Unavailability of Specific Performance. 34. Peete incorporates the preceding paragraphs as if set forth at length herein. 35. QBW requests that the Court require Peete to specifically perform its obligations under the Agreement by ordering Peete to enroll all homes it has constructed. 36. QBW avers that the Agreement includes a clause stating that, in the event of breach, "QBW may seek specific performance or other appropriate relief in legal or equitable proceedings."I 37. QBW requests, in the alternative, that damages in excess of $35,000 be granted to compensate QBW for losses it will sustain as a result of Peete's failure to enroll all homes. 38. QBW avers that it "is entitled to specific performance because monetary damages 1 For the sake of accuracy, counsel for Peete would like to note that paragraph 7 of Plaintiff's Complaint misquotes the language of the Agreement. Section B5 of the Agreement stetes, "If Builder fails to enroll any eligible home as required by this Agreement, QBW may seek speclj1c enforcement or other appropriate relief in legal or equitable proceedings..." (emphasis added). The remedy - specific performance - is not contemplated or set forth in the Agreement and thus, is not appropriate relief. 6 can not be calculated with any degree of certainty until Apri117, 2008." See Second Amended Complaint at ~ 13. 39. The Pennsylvania Supreme Court disfavors the use of equitable reliefin contracts when an adequate remedy at law is available. Clark v. Pa. State Police, 436 A.2d 1383, 1385 (pa. 1981). 40. There is an adequate remedy at law when there exists a "method by which the amount of damages can be accurately computed or ascertained." Id. 41. QBW claims damages in excess of $35,000, accounting for its inability to recover warranty fees as a direct result of Peete's alleged failure to enroll all homes. 42. If Peete has breached its obligation under the Agreement to enroll homes under the QBW warranty program - which it has not - then the warranty fees can be accurately computed or ascertained by performing an inspection of those homes. 43. Therefore, in recognition of the Pennsylvania Supreme Court's refusal to apply specific performance when an adequate remedy at law exists, relief under QBW's claim for specific performance of the Agreement cannot be granted. WHEREFORE, Defendant, Ed Peete Company requests that the Court enter an order sustaining its Preliminary Objections and dismissing QBW's Second Amended Complaint, or in the alternative striking QBW's claim for specific performance of the Agreement, with prejudice. 7 COHEN, SEGLIAS, PALLAS GREENHALL & FURMAN P.C. BY: >>!~;{;;;'N.'~4.?: MARIAN A. KORNILOWICZ, JENNIFER M. HORN, ESQUI United Plaza 30 S. 17th Street, 19th Floor Philadelphia, PA 19103 Attorney for Defendant, Ed Peete Company 8 CERTIFICATE OF SERVICE The undersigned hereby certifies that a true and correct copy of Preliminary Objections of Defendant Ed Peete Company was served via first class mail on August 28, 2006, postage prepaid upon the following: John A. Gill, Esquire 325 North Second Street Wormleysburg, PA 17043 COHEN, SEGLIAS, PALLAS GREENHALL & FURMAN P.C. NI ER M. HORN, ESQUIRE nited Plaza 30 S. 17tb Street, 19tb Floor Philadelphia, PA 19103 Attorney for Defendant, Ed Peete Company 9 COHEN, SEGLlAS, PALLAS, GREENHALL & FURMAN, P.C. By: MARIAN A. KORNILOWICZ, ESQUIRE JENNIFER M. HORN, ESQUIRE IDENTIFICATION NOS.: 43776/79721 United Plaza 30 S. 17tb Street, 19tb Floor Philadelphia, PA 19103 (215) 564-1700 Attorneys for Defendant Ed Peete Company QUALITY BUILDERS WARRANTY CORPORATION 325 N. Second Street Wormleyburg, PA 17043 COURT OF COMMON PLEAS CUMBERLAND COUNTY, PENNSYL VANIA CIVIL ACTION v. NO: 06-3139 ED PEETE COMPANY 3240 Wilson Boulevard, Suite 100 Arlington, VA 22201 BRIEF IN SUPPORT OF DEFENDANT'S PRELIMINARY OBJECTIONS Defendant, Ed Peete Company ("Peete"), by and through its undersigned counsel, files this Brief in Support of its Preliminary Objections to the Complaint of Plaintiff, Quality Builders Warranty Corporation ("QBW"). I. INTRODUCTION This case arises from a contract between Peete, a developer and builder of residential condominiums, and QBW, a corporation that provides home warranties to home owners. Plaintiff claimed that Peete breached the contract by not enrolling all of the homes it constructed into Plaintiff's warranty program. Plaintiff seeks specific performance of the contract or, in the alternative, monetary damages resulting from Peete's purported failure to comply with the terms of the contract. However, QBW's claim for specific performance is unsupported by 1 Pennsylvania law where, as here, monetary damages are adequate. Further, QBW's claims arising from the allegedly lost warranty fees are not ripe based on the plain language of the Builder Agreement entered into between Peete and QBW - if enrollment is not yet due, Peete is not obligated to enroll the units and thus, has not yet breached the Agreement. Thus, QBW's Complaint and its claims for relief in the form of specific performance should be dismissed. II. STATEMENT OF FACTS The within action was instituted by the filing of a complaint on or about June 1, 2006 in the Court of Common Pleas of Cumberland County. Since June 1,2006 Plaintiff has amended its Complaint twice; once on July 6, 2006, and most recently on August 7,2006. In its Second Amended Complaint, QBW alleges a contract was created between it and Peete on or about April 14,2003. See Second Amended Complaint at ~3. The contract between Peete and QBW is entitled "Builder Agreement" ("Agreement") and is attached to the Second Amended Complaint. See Second Amended Complaint at Exhibit "1." QBW alleges that on or about April 17, 2003, QBW and Peete executed an Amendment to the Builder Agreement which extends Peete's obligations under the agreement through April 17, 2008. See Second Amended Complaint at ~ 4. The Amendment to the Builder Agreement is attached to the Second Amended Complaint. See Second Amended Complaint at Exhibit "2." QBW is seeking injunctive or, in the alternative, monetary relief for Peete's alleged breach pursuant to the terms of the Agreement. See Second Amended Complaint at "10,12. QBW avers that Peete is required to enroll "every home Builder, Builder's Principals, or any entity under Builders or Builder's Principals common control constructs" in the QBW Ten- Year Limited Warranty Program. See Second Amended Complaint at' 6. QBW also alleges that Peete has breached its Agreement with QBW "by failing to enroll all homes as required." 2 See Second Amended Complaint at ~ 5. QBW, not Peete, however, drafted the procedures for enrolling homes in QBW's warranty program. See Second Amended Complaint at Exhibit "1." According to Section B.2 of the Agreement, as builder, Peete, may enroll homes currently under construction and homes completed but not sold or occupied [parenthetical omitted] provided that enrollment is made within 45 days of execution of this Agreement or reacceptance and QBW has inspected and approved the home. See Second Amended Complaint Exhibit "I" at Section B.2 (emphasis added). Section B.2 further provides: Builder and purchaser must complete, sign the Enrollment Form at closing, and Builder agrees to furnish QBW with a copy of the signed Enrollment Form within ten (10) days of closing. Builder agrees not to charge the purchaser directly the cost of the enrollment fee. A home will not be considered enrolled until QBW receives and approves the fully executed and completed Enrollment Form, payment of all fees, and an approved final inspection. See Second Amended Complaint Exhibit "1" at Section B.2 (emphasis added). In other words, QBW's inspection and approval of the home is a condition precedent and prerequisite to enrollment, and enrollment can not occur until the completed Enrollment Sheet is provided to QBW at least ten (10) days before closing. If closing has not occurred and approved final inspection has not occurred, enrollment is not due. QBW has failed to identify which homes - if any - in which enrollment is due. If enrollment is not due, Peete is not obligated to enroll the units and thus, has not yet breached the Agreement. In addition, to qualify for enrollment, Section B.2 provides that [h]omes which remain in a Builder's inventory longer than 18 months must be enrolled by the end of the 19th month from construction start date to qualify for enrollment. See Second Amended Complaint at Exhibit "I" at Section B.2. The Agreement does not define "Builder's inventory" or identify "relevant construction start date" in the context of enrollment. 3 If a home has not been in the Builder's inventory for longer than 19 months, it has not yet failed to qualify for enrollment under the terms of the Agreement. QBW has failed to allege specific facts sufficient to support an allegation that Peete is in breach of the Agreement. QBW has failed to specify the location of the homes constructed by Peete that were allegedly not enrolled pursuant to the Agreement and when enrollment was due. Further, QBW has failed to allege the dates on which construction of said homes was commenced and completed. The location and time of commencement of construction of the homes and/or condominium units that were allegedly not enrolled are material facts pursuant to Sections B(I) and B(2) of the Agreement. Based upon the allegations contained in QBW's Complaint, Peete is unable to ascertain the basis or validity of QBW's claim for breach of contract with sufficient precision to prepare a responsive pleading and/or prepare for trial. For the reasons set forth below, Peete's Preliminary Objections to QBW's Complaint are supported by relevant law and should be granted. II. LEGAL ARGUMENT A. PLAINTIFF'S CLAIMS ARE NOT RIPE. "The ripeness doctrine is a concept of standing premised on the notion that judicial machinery should be conserved for problems which are real and present or imminent, not squandered on problems which are abstract or hypothetical or remote." Van Doren v. Mazurkiewicz, 695 A.2d 967, 971 (Pa. Commw. Ct. 1997). The ripeness doctrine is a prerequisite for a court to examine the merits of a case. Treski v. Kemoer Nat'l Ins. Co., 674 A.2d 1106, 1113 (pa. Super. 1996). In order for a case to be ripe there must be actual case or controversy at every stage of the judicial process. Richards v. Trimbur, 374 Pa. Super. 352, 358- 360 (pa. Super. 1988). The purpose of the ripeness doctrine is to prevent premature 4 adjudications. Rouse & Assoc.- Ship Rd. Land Ltd. P'ship v. Pa. Envtl. Oualitv Bd., 164 Pa. Commw. 326, 331-33 (pa. Commw. 1994). The court must consider whether the issues are developed for judicial review, and if any party will suffer hardship due to delay. Treski,674 A.2d at 1113. Here, QBW's inspection and approval of the homes and/or condominium units at issue are conditions precedent and prerequisites to enrollment. Enrollment can not occur until the properties have qualified for enrollment. In addition, enrollment can not occur until the completed Enrollment Sheet is provided to QBW at least ten (10) days before closing. If closing and approved final inspection has not occurred, enrollment is not due and Peete has not yet breached the Agreement. QBW has failed to identify which homes - if any -- in which enrollment is due or, with respect to qualifying homes for enrollment, QBW has failed to identify relevant construction start dates. Therefore, in order to prevent premature adjudication of a merely speculative, hypothetical problem, the Court should dismiss Plaintiff's Second Amended Complaint, with prejudice, for failure to satisfy the doctrine of ripeness. In addition, it is well settled Pennsylvania law that any ambiguities in a contract must be construed against the drafter of the contract. Commonwealth Dep't of Transp. v. Mosites Constr. Co., 494 A.2d 41, 43-4 CPa. Commw. Ct. 1985). In this case, any ambiguities in the Agreement must be construed against QBW. B. PLAINTIFF FAILED TO PLEAD ITS CLAIM WITH SUFFICIENT SPECIFICITY The Commonwealth of Pennsylvania is a fact-pleading jurisdiction and therefore a complaint must identify adequately the issues by summarizing facts essential to support a party's claim. Pa.R.Civ.P. 1019; Sevin v. Kelshaw, 611 A.2d 1232, 1234 (pa. 1992). The Rules further 5 provide that a pleading must set forth the material facts upon which a cause of action is based and that failure to plead a claim specifically is grounds for filing preliminary objections. Pa.R.Civ.P. 1019(a) and 1028(3). Failing to plead material facts renders the complaint insufficient to "enable the adverse party to prepare his case." Pa. R.C.P. Rule 1019; Baker v. Rangos, 324 A.2d 498,505 (Pa. Super. Ct. 1974). A complaint must give the defendant fair notice of what the plaintiffs claim is and the grounds upon which it rests. It should formulate the issues by fully summarizing the material facts, or the facts that are essential to support the claim. The facts pled "must be sufficient to convince the court that the averments are not merely subterfuge." Sevin, 611 A.2d at 1235 (quoting Bata v. Central-Penn National Bank of Philadelohia, 224 A.2d 174, 179 (pa. 1966)). QBW's claim for breach of contract requires that QBW plead and demonstrate that Peete failed to enroll homes that they were obligated to enroll pursuant to the Builder Agreement, as amended. The party claiming breach of contract must allege specific facts which tend to show (1) the existence of a contract, including the essential terms; (2) a breach of duty imposed by the contract; and (3) damages. Williams v. Nationwide Mutual Ins. Co., 750 A.2d 881,884 (pa. Super. Ct. 2000). In its Complaint, however, QBW failed to allege specific facts demonstrating that Peete did not perform its contract with QBW. It has not identified specific acts or omissions on the part of Peete that contributed to the damages incurred by QBW. QBW's Complaint alleges only that Peete failed to "enroll all homes." (Second Am. Compl. at ~5). QBW's Complaint does not allege which specific homes Peete failed to enroll, where these homes were located, or when these homes were constructed. Pursuant to sections B(I) and B(2) of the Builder Agreement, the location and the time of construction of the homes are material facts which would tend to prove 6 or disprove a breach of contract claim. rd. at Exh. 1. Based on the clear language of the Builder Agreement, Peete is not required to enroll homes if closing has not occurred and approved final inspection has not occurred. Id. Based upon the allegations contained in QBW's Complaint, or lack thereof, Peete is unable to ascertain the basis for QBW s claim with sufficient precision to prepare a responsive pleading and/or prepare for trial. This Honorable Court, therefore, should strike QBW's Complaint, or in the alternative, require amendment. C. PLAINTIFF'S CLAIM FOR SPECIFIC PERFORMANCE IS NOT A CAUSE OF ACTION RECOGNIZED IN PENNSYLVANIA WHEN THERE IS AN ADEOUATE REMEDY AT LAW. In cases such as this where, based on the facts averred in plaintiff's complaint the law dictates that no recovery is possible, Pa.R.Civ.P. Rule 1028(a)(4) permits the defendant to file preliminary objections. The Pennsylvania Supreme Court disfavors the use of equitable relief in contracts when an adequate remedy at law is available. Clark v. Pennsvlvania State Police, 436 A.2d 1383, 1385 (pa. 1981). The Court has stated that "specific performance should only be granted where the facts clearly establish the plaintiffs right thereto, where adequate remedy at law does not exist, and where justice requires it." Cimina v. Bronich, 537 A.2d 1355, 1358 (pa. 1988). There is an adequate remedy at law when "the amount of damages can be accurately computed or ascertained." Clark, 436 A.2d at 1385. Even in situations where the amount of damages may be based on many complicated factors, money damages are still an adequate remedy where the damages are "ascertainable and could be determined to a reasonable degree of certainty," through the testimony of experts or appraisers. Petry v. Tanglwood Lakes. Inc., 522 A.2d 1053, 1055 (pa. 1987). Therefore, where damages can be reasonably calculated or otherwise ascertained, it is proper for a trial court to dismiss plaintiffs' claims for specific performance upon preliminary 7 objection in situations where plaintiffs have an adequate remedy at law. See Id. at 1057 (upholding trial court's dismissal of plaintiffs claims for specific performance based on preliminary objections of defendant). QBW's Complaint claims that it is entitled to specific performance of the Builder Agreement, based on the terms of the Agreement itself. (Second Am. Compl. at ~13). However, QBW's Complaint also avers that monetary damages serving to compensate QBW for unpaid warranty fees would also be appropriate relief. Id. at ~12. These warranty fees should be readily calculable to a reasonable degree of certainty, based on the warranty fees as outlined within the Builder Agreement and the number of allegedly unenrolled homes that Peete has constructed. Based on these factors, QBW has estimated these warranty fees to be in excess of $25,000. Id. As QBW will receive the pecuniary benefit of this Agreement upon payment of these money damages, an adequate remedy exists at law. Therefore, specific performance of the Agreement is not an available remedy under Pennsylvania law. This Honorable Court, therefore, should dismiss QBW's claim for specific performance pursuant to Pa.R.Civ.P. Rule 1028(a)(4). V. CONCLUSION Based on the foregoing, Defendant, Ed Peete Company respectfully requests that this Honorable Court grant its Preliminary Objections and dismiss the Second Amended Complaint of Quality Builders Warranty Corporation with prejudice. 8 , COHEN, SEGLIAS, PALLAS GREENHALL & FURMAN P.C. DATED:-r'+- ......1 .. .' /~ f BY: PIA ~~ MARIAN . KORNILOWIC JENNIFER M. HORN, ESQ IDENTIFICATION NOS.: 43776/79721 United Plaza 30 S. 17th Street, 19th Floor Philadelphia, PA 19103 Attorneys for Defendant Ed Peete Company 9 .,~\,"~' t. ..Ie", ~ ,~~. :}", . .." ~ '. () ...., ~ ~7:) C C:;:J cV'''' "";, ;po =:r:n c. G) n'r- -rrn !'., :_~~y \D "-'~L) ".. ()~ ::.: I <5 C- ....> _M..\ :;:2~ ?O ,-~ r- .-<- Wi .< QUALITY BUILDERS WARRANTY CORPORATION IN THE COURT OF COMMON PLEAS CUMBERLAND COUNTY, PENNSYLVANIA Plaintiff v. CNIL ACTION DOCKET NO. 06-3139 ED PEETE COMPANY Defendant PLAINTIFF'S PRELIMINARY OBJECTIONS TO THE PRELIMINARY OBJECTIONS OF DEFENDANT TO PLAINTIFF'S SECOND AMENDED COMPLAINT Plaintiff, Quality Builders Warranty Corporation (QBW) by and through its attorney, John A. Gill, Esquire, hereby preliminarily objects to Defendant, Ed Peete Company's (Peete) Preliminary Objections to QBW's Second Amended Complaint pursuant to Pa. R. C. P. 1028 and avers as follows: I. Preliminary Objection in the Nature of Failure of Pleading to Conform to Rule of Court Punuant to Pa. R. C. P.I028(a)(2). 1. Peete filed Preliminary Objections to QBW's Second Amended Complaint 2. The Preliminary Objections contain averments of fact not of appearing of record. 3. Peete's Preliminary Objections do not contain a verification in accordance with Pa. R.C.P.1024. Wherefore, Plaintiff, Quality Builders Warranty Corporation, requests that the Court enter an Order sustaining its Preliminary Objections and dismissing Defendant, Ed Peete Company's Preliminary Objections to QBW's Second Amended Complaint. WHEREFORE, Plaintiff, Quality Builders Warranty Corporation, requests that the Court enter an Order sustaining its Preliminary Objection and dismissing Preliminary Objection III of Defendant, Ed Peete Company. Respectfully Submitted, /2:f~ 325 North Second Street Wormleysburg. PA 17043 (717) 737-2522 #41532 Attorney for Plaintiff Quality Builders Warranty Corporation VERIFICATION I, JORDAN F. OLSHEFSKI, Vice President of Quality Builders Warranty Corporation, hereby certify and state that the foregoing Plaintiff's Preliminary Objections to the Preliminary Objections of Defendant to Plaintiff's Second Amended Complaint is true and correct to the best of my knowledge, information and belief; and that I understand that false statements herein axe made subject to the penalties of 18 Pa. C.S. ~4904, relating to unsworn falsification to authorities. Quality Builders Warranty Corporation Date: q/''-i/Ob ~ By: 44 ~. Jordan F. Olshefski, Vice President CERTIFICATE OF SERVICE I HEREBY CERTIFY that I served a copy of the Plaintiff's Preliminary Objections to the Preliminary Objections of Defendant to Plaintiff's Second Amended Complaint was sent via U.S. Mail, first class postage prepaid, which service satisfies the requirements of the Pennsylvania Rules of Civil Procedure, addressed as follows: Cohen Seglias Pallas Greenhall & Furman PC Jennifer M. Horn, Esquire United Plaza, 19th Floor 30 South 17th Street Philadelphia, P A 19103 Date: qll~/t>~ ~~~ ...... ') t"' " ( .. ,. . ..~ PRAECIPE FOR LISTING CASE FOR ARGUMENT (Must be typewritten and submitted in duplicate) TO THE PROrnONOTARY OF CUMBERLAND COUN1Y: Please list the within matter for the next Argument Court. ----------------------------------------------------------------------------...-------------------------------... CAPTION OF CASE (entire caption must be stated infull) Quality Builders Warranty Corporation (plaintiff) YS. Ed Peete Company (Defendant) No. 3139 06 Term 1. State matter to be argued (i.e., plaintiff's motion for new trial, defendant's demurrer to complaint, etc.): 2, Identify counsel who will argue cases: (a) for plaintiff: John A. Gill. Esquire (Name and Address) 325 N. 2nd street, Wormleysburq, PA 17043 (b) for defendant: .Tpnnifl=>r M Hnrni R~fJllire (Name and Address) Unitpd Pl~~~, 10 ~. 17th ~~ . 19t~ PI P~i]a. PA 3. I will notify all parties in writing within two days that this case has been listed for argUment. ' 4. Argument Court Date: October 25, Horn 79721 D~: October 4, 2006 Ed Peete Company Attorney for ~ 0 ~ -n o n ---t t Ui -0 c~l f; '.:3\ "J':?' ~ .r::- .:;.... COHEN, SEGLIAS, PALLAS, GREENHALL & FURMAN, P.C. BY: MARIAN A. KORNILOWICZ, ESQUIRE JENNIFER M. HORN, ESQUIRE IDENTIFICATION NOS.: 43776/79721 United Plaza 30 S. 17th Street, 19th Floor Philadelphia, P A 19103 (215) 564-1700 Attorneys for Defendant Ed Peete Company QUALITY BUILDERS WARRANTY CORPORATION COURT OF COMMON PLEAS CUMBERLAND COUNTY, PENNSYL VANIA v. CIVIL ACTION ED PEETE COMPANY NO: 06-3139 ANSWER OF DEFENDANT, ED PEETE COMPANY, TO THE PLAINTIFF'S PRELIMINARY OBJECTIONS TO THE PRELIMINARY OBJECTIONS TO PLAINTIFF'S SECOND AMENDED COMPLAINT Defendant, Ed Peete Company ("Peete"), by and through its undersigned counsel, hereby submits responses to Plaintiff, Quality Builders Warranty Corporation's ("QBW"), Preliminary Objections to the Preliminary Objections to Plaintiff's Second Amended Complaint, and in support thereof, avers as follows: PRELIMINARY OBJECTION I 1. Admitted. 2. Denied. 3. Admitted in part. Denied in part. It is admitted that Peete did not attach a Verification to its Preliminary Objections to Plaintiffs Second Amended Complaint. However, such Verification is not necessary in accordance with Pa. R. C. P. 1024. In any event, a true and correct copy of Peete's Verification is attached hereto as Exhibit "A." WHEREFORE, Defendant, Ed Peete Company, requests that the Court overrule Plaintiffs Preliminary Objections to the Preliminary Objections of Defendant to Plaintiffs Second Amended Complaint, with prejudice. PRELIMINARY OBJECTION II 4. Peete incorporates by reference its responses to Paragraphs 1-3 as if set forth fully herein. By way of further response, Admitted. 5. Denied. Peete's Preliminary Objections to the Plaintiffs Second Amended Complaint is a written document that speaks for itself. Any characterization thereof is specifically denied. 6. Denied. 7. Admitted in part, Denied in part. It is admitted that QBW propounded discovery to Peete. QBW, however, had agreed to extend Peete's time to produce documents. 8. Denied. The allegations contained in paragraph 8 of Plaintiff s Preliminary Objections to the Preliminary Objections of Defendant to Plaintiffs Second Amended Complaint constitute conclusions of law to which no response is required. 2 WHEREFORE, Defendant, Ed Peete Company, requests that the Court overrule Plaintiffs Preliminary Objections to the Preliminary Objections of Defendant to Plaintiff's Second Amended Complaint, with prejudice. Respectfully submitted, COHEN, SEGLIAS, PALLAS GREENHALL & FURMAN P.c. BY: frj~ V(1l,~1 MARIAN A. KORNILOWI QUIRE JENNIFER M. HORN, ESQUIRE United Plaza 30 S. 17th Street, 19th Floor Philadelphia, P A 19103 Attorney for Defendant, Ed Peete Company 3 ~ " tt-~I ~It A VERI FICA TION I, Ed Peete, President of Ed Peete Company, hereby certify and state that the previously tiled Preliminary Objections of Defendant to Plaintiffs Second Amended Complaint are 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. Dated: October 4,2006 By: ED~ Ed Peete Company '. CERTIFICATE OF SERVICE The undersigned hereby certifies that a true and correct copy of the Answer of Defendant, Ed Peete Company, to Plaintiffs Preliminary Objections to the Preliminary Objections of Defendant to Plaintiff s Second Amended Complaint and Praecipe for Listing Case for Argument was served via first class mail on October 4, 2006, postage prepaid upon the following: John A. Gill, Esquire 325 North Second Street Wormleysburg, PA 17043 COHEN, SEGLIAS, PALLAS GREENHALL & FURMAN P.C. 4 () S ...: r-:> .... = ~11 c.:::> Gf" Q C) ---, 1 01 ~~ ..~ - .. QUALITY BUILDERS WARRANTY CORPORATION IN THE COURT OF COMMON PLEAS CUMBERLAND COUNTY, PENNSYLVANIA Plaintiff No. 06-3139 v. ED PEETE COMPANY CNIL ACTION Defendant PRAECIPE TO THE PROTHONOTARY: Please mark the above caption action as "Discontinued with Prejudice". Respectfully Submitted, Date: //.... ;J./d6 ~ -~=-~ . Gill, Esquire 325 North Second Street Wormleysburg, PA 17043 (717) 737-2522 #41532 Attorney for Plaintiff Quality Builders Warranty Corporation ~., '(-....;.:' i.--;::::) cr'\ \ e, --:-;. Cf-~~ :;- CJ