HomeMy WebLinkAbout2016-4324THE PENINSULA
HOMEOWNERS
ASSOCIATION and PAUL
ACKROYD, an individual,
Plaintiffs
V.
: IN THE COURT OF COMMON PLEAS OF
: CUMBERLAND COUNTY, PENNSYLVANIA
CIVIL ACTION
NIR AJ PAREKH, DI SHA
PAREKH, and RAJNIKANT
J. PAREKH,
Defendants : NO. 2016-04324 CIVIL TERM
IN RE: DEFENDANTS' PRELIMINARY OBJECTIONS
TO PLAINTIFFS' AMENDED COMPLAINT
BEFORE MASLAND and PECK, JJ., and OLER, S.J.
ORDER OF COURT
AND NOW, this 28`h day of August, 2017, upon consideration of Defendants'
Preliminary Objections to Plaintiffs' Amended Complaint, following oral argument held
on August 11, 2017, and for the reasons stated in the accompanying opinion, the
preliminary objections are dismissed and Defendants are afforded a period of 20 days
from the date of this order to file an answer to the amended complaint.
BY THE COURT,
w 0 al�,.1.
J. P esley Oler r., S.J.
Susan J. Smith, Esq.
2807 Market Street
Camp Hill, PA 17011
Attorney for Plaintiff Paul Ackroyd
Diane M. Tokarsky, Esq.
McNees Wallace & Nurick, LLC
100 Pine Street
P.O. Box 1166
Harrisburg, PA 1.71.08-11.66
Attorney for Defendants
THE PENINSULA
HOMEOWNERS
ASSOCIATION and PAUL
ACKROYD, an individual,
Plaintiffs
a
NIRA) PAREKH, DISHA
PAREKH, and RAJNIKANT
J. PAREKH,
: IN THE COURT OF COMMON PLEAS OF
: CUMBERLAND COUNTY, PENNSYLVANIA
CIVIL ACTION
Defendants : NO. 2016-04324 CIVIL TERM
IN RE: DEFENDANTS' PRELIMINARY OBJECTIONS
TO PLAINTIFFS' AMENDED COMPLAINT
BEFORE MASLAND and PECK, JJ., and OLER, S.J.
OPINION and ORDER OF COURT
OLER, S.J., August 28, 2017.
In this civil case, the owners of a lot in a planned residential community are being
sued for fraudulent misrepresentation and breach of a declaration of restrictions and
covenants in connection with their submission of an allegedly deceptive plan for
development of their lot to a committee of the governing homeowners association. The
individual plaintiff, who is also a lot owner in the community, seeks injunctive and other
relief'
For disposition at this time are Defendants' preliminary objections to the amended
complaint. Oral argument was held on the matter on August 11, 2017. For the reasons
stated in this opinion, the preliminary objections will be dismissed.
' A second plaintiff, the homeowners association, has discontinued the action on its behalf. Praecipe To
Discontinue as to Plaintiff The Peninsula Homeowners Association, filed January 30, 2017.
1
STATEMENT OF FACTS
The facts alleged in the amended complaint may be summarized as follows:2 The
individual Plaintiff is owner of a lot on which he resides in a planned residential
community in Silver Spring Township, Cumberland County, Pennsylvania, known as The
Peninsula Phase 11.3 Defendants are owners of a lot in the same subdivision on the same
street .4 The street in question is a cul-de-sac named Deerbum Court.'
Each lot in the subdivision is subject to a recorded Declaration of Restrictions and
Covenants, the terms of which run with the land, bind and inure to the benefit of each lot
owner, and may be
enforced by any lot
owner.5 The declaration
of restrictions
and
covenants provides
for a homeowners
association made up of
lot owners,'
and
appointment by the association of an architectural control committee to review plans for
lot development.$ The authority of the committee in this regard is described as follows:
Building and Structure Plans Approval. No building or structures shall be
erected, placed or altered on any lot until the construction plans and specifications and a
plan showing the location of the structure have been approved by the Architectural
Control Committee as to quality of workmanship and materials, harmony of external
design and existing structures, and as to location....'
Plan Changes. No changes shall be made in the approved building plans prior to
the occupancy of any dwelling house located on a Lot without the prior written approval
of the Architectural Control Committee, and no substantial change shall be made in the
approved landscaping plan without the approval of the Architectural Control
Committee.')
2 In surnmarizing the facts alleged, the court is not, of course, expressing any opinion as to the accuracy of
the allegations.
3 Amended Complaint, ¶2, fled September 28, 2016 (hereinafter Amended Complaint, ¶__).
'Amended Complaint, ¶25.
'Amended Complaint, 136.
6 Amended Complaint, ¶¶8-10, Appendix A.
7 Amended Complaint, Appendix A, Art. H.
s Amended Complaint, Appendix A, Art. V.
' Amended Complaint, Appendix A, Art. V.
10 Amended Complaint, Appendix A, Art. V.
2
With respect to enforcement of the declaration of restrictions and covenants, the
document provides that "[v]iolation of any of the provisions contained herein is hereby
declared and agreed to be a nuisance which may be remedied by appropriate legal
proceedings."11 It is also provided that "[t]he failure to enforce or restrain the breach of
any provision herein contained shall in no way be deemed a waiver of the right to enforce
or restrain such breach, or any future breach, or as a waiver of such provision. ,12
Defendants' lot is situated directly across the street from Plaintiffs lot. 13
In its
undeveloped state, Defendants' lot sloped upward from the street, away from Plaintiffs
property, but not in such a way that completely eliminated Plaintiff's line of sight across
Defendants' land to a neighboring structure. 14 On October 30, 2015, a site plan was
submitted by one of Defendants to the aforesaid architectural control committee,
proposing development of Defendants' lot. 15 In the words of the amended complaint,
35. The Site Plan depict[ed] a residential structure with an identified entrance
facing Deerburn Court.
36. The Site Plan depict[ed] a driveway with egress sited within the cul-de-sac
bulb of Deerburn Court at the western corner of the Property; the driveway continue[d]
along the frontage of Deerbum Court to an identified "drop off circle in the immediate
vicinity of the identified entrance to the residential structure.
37. The Site Plan also show[ed] a pool located to the north and west of the
residential structure.
38. Other than the residential structure, pool and driveway, no other building or
structural improvement [was] identified or depicted on the Site Plan.
39, The Site Plan show[ed] topographic lines; the Site Plan [did] not identify
such lines as existing or proposed, provide[d] no information as to elevation, and
provide[d] no information that would distinguish or indicate an existing grade or
proposed grade or proposed excavation of the Property.1'
" Amended Complaint, Appendix A, Art. VII, §7.01.
12 Amended Complaint, Appendix A, Art. VII, §7.01.
13 Amended Complaint, 1j25_
14 Amended Complaint,145.
"Amended Complaint,133.
16 Amended Complaint, ¶¶35-39.
3
In submitting this plan, Defendants intentionally misrepresented the lot
development as it was actually planned. 17 In the words of the amended complaint,
42. Submissions made by the Defendants' engineering firm to Cumberland
County Conservation District and Silver Spring Township occurred as early as September
29, 2015. These submissions contained information on site development and proposed
improvements on the Property that did not conform to the Site Plan subsequently
submitted to the Architectural Control Committee on October 30, 2015.
43. In a manner not in conformance with the approved Site Plan, Defendants
have excavated and graded the Property; removed trees; relocated and constructed the
driveway in the eastern corner of the Property; and, upon information and belief,
beginning in April 2016 began incremental construction of a solid concrete block wall
(Wall)_ Upon knowledge and belief the foregoing are depicted in the plans and
submissions prepared and submitted by the Defendants' professional engineer to
Cumberland County Conservation District and Silver Spring Township prior to and
following the submission and approval of the Site Plan.
44. At no time subsequent to the submission or approval of the Site Plan did
Defendants reveal to the Architectural Control Committee that it had submitted to the
County and Township site plans that conflicted with the information shown on the Site
Plan,
45. Prior to excavation and earthmoving activity, the Property's existing slope
allowed view from Deerburn Court of nearly the entire facade of an existing home in The
Peninsula located north of and abutting the Property.... The grading and excavation of
the Property created an earthen plateau on the Property held in place by the Wall.
46. The Wall is located approximately 20 feet from the northern edge of
pavement of Deerburn court and approximately eight feet from the northern edge of the
right-of-way of Deerburn Court.
47. The Wall extends a distance of approximately 250 feet along the Property's
frontage on Deerburn Court. It occupies 71% of the Property frontage on Deerburn Court.
Because the Wall is curved, the actual length of the Wall is approximately 320 feet.
48. As constructed at this time, the Wall exceeds 20 feet in height.
49. Upon information and belief, Defendants plan to increase the height of the
Wall with the erection of access barriers. The design, material and height of the access
barriers—and the final height of the Wall—have not been made known to the
Architectural Control Committee.
50. As constructed at this time, the Wall is the predominant feature on the
Property and particularly so when viewed from Deerburn Court....
51. The Wall blocks view from Deerburn Court of the remainder of the Property.
52. As constructed at this time, the Wall obstructs view from Deerburn Court of
the home to be constructed on the Property.
" Amended Complaint, 1142, 55, 70.
C!
53. The driveway for the Property has been cut into the slope on the eastern side
of the Property, re-sited from the cul-de-sac bulb on the western side of the Property as
depicted on the Site Plan. As constructed, the driveway is the dominant feature in the
eastern portion of the Property and along the frontage of Deerburn Court not otherwise
occupied by the Wa1L'g
Based upon the intentionally misleading site plan, the architectural control
committee of the homeowners association approved Defendants' request to improve their
lot.19 However, the undisclosed wall "[did] not complement and [was] not harmonious to
the physical and aesthetic character and attractiveness of The Peninsula planned
residential community"20 and "detrimentally impact[ed] the established and future
economic and aesthetic values of The Peninsula planned residential community and
individual lots therein and interfere[d] with the investments made by all lot owners and
homeowners ...."21 A cease and desist letter sent on behalf of the homeowners
association with respect to the project did not serve to interrupt construction. 22
In the fraudulent misrepresentation count, the amended complaint requests relief
in the form of an order directing that Defendants' lot "be restored, including the re-siting
of the driveway and removal of the Wall, to conform with the approved Site Plan; and
granting litigation costs relating to this action to the extent allowed by law."23 In the
breach of declaration of restrictions and covenants count of the amended complaint, the
same relief 1s requested.24
In the Injunction Count of the amended complaint, a permanent injunction is
requested "to prevent the continued development of the Property in a manner not in
conformance with the approved Site Plan and not complementary and harmonious with
" Amended Complaint, 1142-53.
19 Amended Complaint, ¶40.
20 Amended Complaint, 180.
2' Amended Complaint, ¶81.
22 Amended Complaint, 158.
23 Amended Complaint, at 15.
24 Amended Complaint, at 12.
5
The Peninsula planned community, and to restore the Property to conform to the
approved Site Plan." The amended complaint concludes with a request for an order
entering judgment against Defendants and concluding that Defendants breached the
declaration of restrictions and covenants, enjoining Defendants from further construction
of the development of their lot in a manner not in conformance with the approved site
plan, directing the restoration of the lot, including the re-siting of the driveway and
removal of the wall, to conform with the approved site plan, "granting litigation costs -
incurred in this matter to the extent allowed by law," and granting any other damages to
the extent reasonably calculable.25
Eight preliminary objections have been filed by Defendants to the amended
complaint.26 These consist of (1) a motion to dismiss the amended complaint as it relates
to plaintiff homeowners association based upon the association's lack of standing and
capacity to sue, (2) a motion in the nature of a demurrer to dismiss the fraudulent
misrepresentation count of the amended complaint pursuant to the gist -of -the -action
doctrine, (3) a motion in the nature of a demurrer to dismiss the injunction count of the
amended complaint on the ground that an injunction is a form of relief and not a cause of
action, (4) a motion in the nature of a demurrer to dismiss the injunction count of the
amended complaint on the ground that the legal requisites for injunctive relief have not
been pled, (5) a motion in the nature of a demurrer to dismiss the fraudulent
misrepresentation count and breach of declaration of restrictions and covenants count of
the amended complaint on the ground that the legal requisites for the injunctive relief
requested in them have not been pled, (6) a motion in the nature of a demurrer to dismiss
the fraudulent misrepresentation count of the amended complaint for failure to plead
fraud with particularity, (7) a motion in the nature of a demurrer to dismiss the breach of
declaration of restrictions and covenants count of the amended complaint as to the
" Amended Complaint, at 21.
26 Defendants' Preliminary Objections to Plaintiffs' Amended Complaint, filed October 24, 2016
(hereinafter Preliminary Objections, ¶_).
6
individual Plaintiff on the ground that no injury to him has been pled, and (8) a motion in
the nature of a demurrer to dismiss all three counts of the amended complaint on the
ground that their requests for relief in the form of "litigation costs" are overly broad or,
in the alternative, a motion to strike that aspect of the relief requested in each count on
that basis. 27
DISCUSSION
Motion to dismiss amended complaint as it relates to homeowners association
based upon lack of standing and capacity to sue. As noted above, this action has been
discontinued as it relates to Plaintiff homeowners association. 2" Consequently, the
preliminary objection based upon the association's purported lack of standing and
capacity to sue will be dismissed as moot.
Demurrer to fraudulent misrepresentation count on basis of gist -of -the -action
doctrine. The gist -of the -action doctrine precludes plaintiffs from recasting ordinary
breach of contract claims into tort claims .29 In this regard, it has been noted that "[t]ort
actions lie for breaches of duties imposed by law as a matter of social policy, while
contract actions lie only for breaches of duties imposed by mutual consensus agreements
between particular individuals." hart v. Arnold, 2005 PA Super 328, ¶43, 884 A.2d 316,
339. The law of torts embodies "larger social policies" than the law of contracts, and a
breach of duties imposed as a matter of social policy is a characteristic of a tort that is not
inherent in the usual private contractual breach. eToll, Inc. v. Elias/Savion Advertising,
Inc., 2002 PA Super 347 ¶¶15, 28-29, , 811 A.2d 10, 14, 19. Where a purported tort
is merely "collateral" to a contract, it may not be pled as a distinct cause of action. Id.
However, while "mere non-performance of a contract does not constitute a fraud,
it is possible that a breach of contract also gives rise to an actionable tort." Id. at ¶1.5, 811
" Preliminary Objections.
28 See note 1 supra.
29 Garis v. Blue Mt. Consumer Disc. Co., 2012 Pa. Dist. & Cnty. Dec. LEXIS 613 (Northampton Co.
2012)_
PA
A.2d at 14. This is particularly true where a defendant has by fraud induced the plaintiff
to engage in the contractual relationship. See Garis v. Blue Mt. Consumer Disc. Co., 2012
Pa. Dist. & Cnty. Dec. LEXIS 613 (Northampton Co. 2012). "[F]raud in the inducement
claims are much more likely to present cases in which a social policy against the fraud,
external to the contractual obligations of the parties, exists." Air Prods. & Chemicals, Inc.
v. Eaton Metal Prods. Co., 256 F. Supp. 2d 329, 341 (E.D. Pa. 2003).
In the present case, although an action involving a breach of a declaration of
restrictions and covenants is analogous to a contract action,3' two factors militate against
utilizing the gist -of -the -action doctrine to preempt the fraud claim at this stage of the
proceedings. First, broader social policy considerations are implicated in enforcement of
area -wide restrictions and covenants that run with the land in a planned residential
community than in a typical two-party contractual dispute. Second, it is alleged herein
that the approval process was initiated by a fraudulent inducement on the part of
Defendants. Accordingly, the preliminary objection requesting dismissal of the fraudulent
misrepresentation count on the basis of the gist -of -the -action doctrine will be dismissed.
Demurrer to injunction count as impermissible conversion of remedy into cause of
action. Notwithstanding the remedial aspects of an injunction, it is not uncommon for
plaintiffs to incorporate requests for such relief in separate counts of their complaints,''
presumably because of the unique factual criteria necessary to support this form of
equitable relief. 12 In the present case, the count for injunctive relief in the amended
complaint represents an elaboration of the factual predicate for such relief arising from
Defendants' wrongful conduct previously pled. As such, the form of the pleading does
not prejudice Defendants and even if there is a defect of procedure in that regard it is
30 Cf. Hilltop Summit Condo. Assn `n v. Hope, 2014 Pa. Commw. Unpub. LEXIS 422, 2014 WL 3396576
(Pa. Cmwlth. 2014).
31 See, e.g., Rick's Original Philly Steaks, Inc. v. Reading Terminal Mkt. Corp., 2008 Phila. Ct. Com. Pl.
LEXIS 43 (Phila. Co. 2008).
32 See Dusman v. Bd. Of Dir's. of the Chambersburg Area Sch. Dist., 123 A.3d 354 (Pa. Cmwlth 2015)
(criteria for preliminary injunction); Omicron Sys_ v.. Weiner, 2002 Phila. Ct. Com. Pl. LEXIS 11 (Phila.
Co. 2002) (criteria for permanent injunction).
8
appropriately disregarded pursuant to the authority of Pennsylvania Rule of Civil
Procedure 126 (Liberal Construction and Application of Rules).
Demurrer to injunction count on basis of legal insufficiency. "To justify the award
of a permanent injunction, the party seeking relief must establish that his right to relief is
clear, that an injunction is necessary to avoid an injury that cannot be compensated by
damages, and that greater injury will result from refusing rather than granting the relief
requested." Kuznik v. Westmoreland Cnty. Bd. Of Commis, 588 Pa. 95, 117, 902 A.2d
476, 489 (2006). Given equity's view of land as a unique commodity," it is not
surprising that "[a]n injunction can be an appropriate remedy where real property rights
are concerned. These real property rights may take the form of a restrictive
covenant ...." Big Bass Lake Cmty. Assn v. Warren, 950 A.2d 1137, 1145 (Pa. Cmwlth
2008). Specifically, it has been said that "[i]njunctive relief is appropriate in order to
abate a violation of a planned community's government documents." Hilltop Summit
Condo Assn v. Hope, 2014 Pa. Commw. Unpub. LEXIS 422, , 2014 WL 3396576,
(Pa. Cmwlth. 2014).
"Though ultimately, the party seeking injunctive relief must prove, with probative
evidence [the requisites for such relief discussed in this opinion above], a court of
common pleas should only sustain a preliminary objection in the nature of a demurrer to
a claim for injunctive relief if the court finds that the [pleading] is clearly insufficient to
establish a right to injunctive relief, and any doubt must be resolved in overruling the
demurrer." Doe v. Franklin County, 139 A.3d 296, 319-20 (Pa. Cmwlth. 2016). Although
Defendants may eventually prevail on the issues of whether the site plan is being fairly
regarded as a misrepresentation of features complained oe4 and whether dilatoriness and
other aspects of the enforcement process tended to diminish any justification for equitable
relief, 35 it can not be said with certainty at this point that injunctive relief is not possible.
33 See Walsh a Powell, 76 Pa. D.&C. 108, 1951 Pa. Dist. & Cnty. Dec. LEXIS 305 (Delaware Co. 1951).
34 See Preliminary Objections, ¶¶53-57.
3s See Preliminary Objections, 1$58-63.
9
Demurrer to fraudulent misrepresentation and breach of declaration of
restrictions and covenants counts on basis of legal insufficiency for injunctive relief. The
rationale for dismissal of this preliminary objection has been set forth in the preceding
section of this opinion.
Demurrer to fraudulent misrepresentation count on basis of failure to plead with
particularity. The elements of the tort of intentional misrepresentation, or fraud, are as
follows: "(1) a representation; (2) which is material to the transaction at hand; (3) made
falsely, with knowledge of its falsity or recklessness as to whether it is true or false; (4)
with the intent of misleading another into relying on it; (5) justifiable reliance on the
misrepresentation; and (6) the resulting injury was proximately caused by the reliance."
Weissberger v. Myers, 2014 PA Super 80, _, 90 A.3d 730, 735. Under Pennsylvania
Rule of Civil Procedure 1019(b), a claim of fraud must be pled with particularity.
Defendants' preliminary objection in this regard contends that the element of
justifiable reliance has not been pled in the fraud count of the amended complaint with
sufficient particularity and is, in fact, contraindicated, by the pleading. 36 Specifically, it is
argued that (a) the existence of publicly available documents said to be inconsistent with
the site plan,' (b) inaction on the part of the association as development of the lot
proceeded in a manner obviously not disclosed by the site plan 3?' and (c) the site plan's
inclusion of a disclaimer to the effect that it was for planning, not construction,
purposes"39 belie a conclusion that any reliance upon purported misrepresentations in the
site plan was reasonable. These factors do not, however, in the court's view represent
more than arguments to be weighed by the trier -of -fact in considering the reliance issue.
36 Preliminary Objections, ¶77.
37 Preliminary Objections, ¶¶78-80.
38 Preliminary Objections, ¶1181-83.
39 Preliminary Objections, ¶84.
10
Defendants further contend that the element of injury proximately caused by the
reliance has not been pled .40 However, the fraud count of the amended complaint
specifically alleges that Defendants' "actions denied Plaintiff Ackroyd the opportunity to
know and to communicate his concerns and objections to the quality, compatibility and
harmony of the improvements actually intended to be constructed, 01 involved a
relocation of the point of egress from the lot from a safe point depicted on the plan,42
resulted in a "Wall which does not complement and is not harmonious to the physical and
aesthetic character and attractiveness of The Peninsula planned residential community
and, instead, functions as a barrier that isolates the Defendants' home from the remainder
of The Peninsula community,"43 and diminished the aesthetic and economic value of
Plaintiff Ackroyd's home.44 Given these allegations, it is believed that injury resulting
from the architectural control committee's reliance upon the purportedly deceptive site
plan in authorizing construction to proceed has been sufficiently pled.
Demurrer to breach of declaration of restrictions and covenants count based upon
lack of injury to Plaintiff Ackroyd. As noted previously in this opinion, the declaration of
restrictions and covenants attached to the amended complaint terms violations of its
provisions "nuisances," and authorizes enforcement of its terms by any lot owner. The
pleading further avers noncompliance with the declarations and covenants by Defendants
in several significant respects, and alleges an adverse aesthetic and economic effect on
Plaintiff Ackroyd's lot. Under these circumstances, the court is unable to agree with
Defendants that a demurrer to the claim for breach of the declaration of covenants and
restrictions must be granted as to Plaintiff Ackroyd for lack of any cognizable injury.
40 Preliminary Objections, 185.
41 Amended Complaint, 178.
42 Amended Complaint, ¶79.
43 Amended Complaint, 180.
44 Amended Complaint, 181.
11
Demurrer or motion to strike due to request in each count for "litigation costs. "
With regard to this preliminary objection, it appears to be Defendants' concern that the
term "litigation costs" may be construed to include attorney's fees, not generally
recompensable.45 In a brief submitted in opposition to Defendants' preliminary
objections, it is asserted that bylaws of the homeowners association in fact permit the
recovery of attorney's fees in cases of this type. 46 Regardless of the ultimate resolution of
this issue, the pleading in this case limits the request for litigation costs to those "allowed
by law." As qualified, the term by its inclusion in the amended complaint does not
prejudice Defendants by demanding an'unlawful remedy, nor in the court's view would it
warrant the drastic action of a dismissal of the complaint or a striking of the request in
each count.
For the foregoing reasons, the following order will be entered:
ORDER OF COURT
AND NOW, this 28t' day of August, 2017, upon consideration of Defendants'
Preliminary Objections to Plaintiffs' Amended Complaint, following oral argument held
on August 11, 2017, and for the reasons stated in the accompanying opinion, the
preliminary objections are dismissed and Defendants are afforded a period of 20 days
from the date of this order to file an answer to the amended complaint.
BY THE COURT,
) " ie i M..., J , I
V.Wesley Ole Jr., S.J.
Susan J. Smith, Esq.
2807 Market Street
Camp Hill, PA 17011
Attorney for Plaintiff Paul Ackroyd
45 Preliminary Objections,194.
46 Brief of Plaintiff in Opposition to Preliminary Objections, at 17.
12
Diane M. Tokarsky, Esq.
McNees Wallace & Nurick, LLC
100 Pine Street
P.O. Box 1166
Harrisburg, PA 17108-1166
Attorney for Defendants
13