HomeMy WebLinkAbout2008-4393
MARIO UMBELINA AND : IN THE COURT OF COMMON PLEAS OF
TABATHA SANTORE-UMBELINA, : CUMBERLAND COUNTY, PENNSYLVANIA
PLAINTIFFS :
:
V. :
:
JACK ADAMS, INDIVIDUALLY AND :
JACK ADAMS BUILDERS, LLC, and :
ADAMS & BREAM BUILDERS, LLC, :
DEFENDANTS : 08-4393 CIVIL TERM
IN RE: ADJUDICATION
OPINION AND ORDER OF COURT
Masland, J., December 2, 2010:--
In this difficult case arising out of the construction of a home, the
homeowners claimed that the contractor made fraudulent misrepresentations
regarding the quality and character of the home. Following a pre-trial
conference, plaintiffs elected to proceed solely with the equitable cause of action
for rescission and the cause of action pursuant to the Unfair Trade Practices and
Consumer Protection Law. All other causes of action were dismissed with
prejudice.
Findings of Fact
I. The parties
(1) Plaintiffs, Mario Umbelina and Tabatha Santore-Umbelina, are adult
individuals and husband and wife residing at 415 Woodlawn Lane,
1
Carlisle, PA 17015, which residence is the subject matter of this lawsuit.
Notes of Testimony, 8, Trial, June 21-23, 2010 hereinafter N.T. .
1
08-4393 CIVIL TERM
(2) Defendant, Albert E. Adams, III, (“Adams”) resides at 3 Arbor Drive,
2
Boiling Springs, PA 17007.
(3) Jack Adams is the owner and sole member of defendant Jack
Adams Builders, LLC, (“Jack Adams Builders”) which has a registered
3
address at 301 East Springville Road, Boiling Springs, PA 17007.
(4) Defendant, Adams & Bream Builders, LLC, (“Adams & Bream”) is a
limited liability company with a registered address at 115 Stable Run,
Zelienople, PA 16063 and a business address at 3 Arbor Drive, Boiling
Springs, PA 17007.
(5) Adams and his friend, Sid Bream are the sole members of Adams &
4
Bream, which built eight homes during its four to five year existence.
(6) Adams has been in the building trade since 1985, having worked for
eleven years for McCoy Brother’s, Inc., a general contractor, and working
as a sole proprietor doing remolding jobs prior to forming Adams &
5
Bream.
(7) Adams established Jack Adams Builders during the existence of
Adams & Bream, with the Umbelina house being the first new home
6
constructed by Jack Adams Builders.
N.T. 417.
2
N.T. 417, 419.
3
N.T. 418.
4
N.T. 418.
5
N.T. 418.
6
2-
-
08-4393 CIVIL TERM
II. Procedural History
(8) On June 21, 2007, plaintiffs initiated a lawsuit against Adams &
Bream seeking, inter alia, rescission of the agreement of sale and a
finding of violations of the Pennsylvania Unfair Trade Practices and
Consumer Protection Law (cite) (“UTPCPL”) at Cumberland County
Docket Number 07-3731.
(9) Upon discovering that Adams & Bream were asserting it did not build
the residence in question, plaintiffs initiated a similar action on July 22,
2008, against Adams, individually, and against Jack Adams Builders at
Cumberland County Docket Number 08-4393.
(10) By order dated July 28, 2009, the court consolidated the two
dockets for the purposes of discovery and trial at Docket Number 08-4393.
(11) Prior to trial, the plaintiffs stipulated that their claims would be
limited to rescission and violations of the UTPCPL.
(12) A three day bench trial, that included an observational visit to the
home, was held beginning on June 21, 2010 and ending June 23, 2010.
(13) At the conclusion of the trial, the court directed the parties to submit
proposed findings of fact and conclusions of law which were received on
August 30, 2010.
III. Negotiation of the Agreement
(14) During the spring of 2005 plaintiffs began a search for a lot on
7
which to build a house.
N.T. 14.
7
3-
-
08-4393 CIVIL TERM
(15) Mrs. Umbelina suffers from chronic knee pain in both knees, and
had two experimental knee surgeries performed by the United States
8
Army.
(16) Plaintiffs’ desired to build a home that would accommodate Mrs.
Umbelina’s limited mobility because Mr. Umbelina’s employment requires
9
him to be out of the country.
(17) Mrs. Umbelina discovered properties located in the Jefferson Court
Development in South Middleton Township, Cumberland County,
10
Pennsylvania.
(18) The development was divided pursuant to a subdivision titled Final
11
Subdivision Plan of Jefferson Court.
(19) The Umbelina’s called Ebener & Associates, a real estate agency,
12
in May, 2005, because of their sign on the lot.
(20) Other than the Ebener & Associates sign there were no other signs
13
on Lot 17.
N.T. 9-11.
8
N.T. 9, 102-103.
9
N.T. 14, 15, 245.
10
N.T. 17, 144; Plaintiffs’ Exhibit 2; Defendants’ Exhibit 4.
11
N.T. 14-15.
12
N.T. 128.
13
4-
-
08-4393 CIVIL TERM
(21) When Mrs. Umbelina contacted Ebener & Associates, she spoke
with Real Estate Broker, Robert J. Purvis (“Purvis”), to inquire about lots in
14
the Jefferson Court Development.
(22) Mrs. Umbelina explained to Purvis that due to her disabilities, the
plaintiffs’ required a lot and home of relatively flat terrain that would
15
accommodate Tabatha’s limited mobility.
(23) Plaintiffs signed an exclusive buyer agency contract pursuant to
which Purvis was to act as the buyers’ agent in the proposed
16
transaction.
(24) Mrs. Umbelina looked at other lots in the Jefferson Court
Development but selected Lot 17, in part, because it was the largest
property for the same price and because of its elevation and unobstructed
17
view.
(25) Purvis showed plaintiffs the adjacent lot, Lot 18, for which Eddie
Lanoue was the contractor. Lot 18 is significantly flatter, but is smaller
18
and has a lower elevation and, hence a more obstructed view.
N.T. 15, 16; Plaintiffs’ Exhibit 1.
14
N.T. 129.
15
Plaintiffs’ Exhibit 1.
16
N.T. 22, 404 and 422.
17
N.T. 404-405, 411; and the court’s view of the property on June 22, 2010, at
18
N.T. 302-311 (hereinafter “View”).
5-
-
08-4393 CIVIL TERM
(26) Although plaintiffs’ told Purvis they desired a lot with a relatively flat
terrain, they nonetheless selected the lot with the steepest terrain and the
19
best view.
(27) Before deciding to purchase Lot 17, plaintiffs visited the site
20
numerous times. In its natural state, Lot 17 had a substantial incline
from front to back, the steepness of which increased closer to the wooded
21
area at the rear of the lot.
(28) Purvis introduced the plaintiffs to Adams at a joint meeting in May
22
of 2005.
(29) During the initial meeting, Mrs. Umbelina informed Adams of her
experimental knee surgeries and stated that she was thankful to the Army
23
for allowing her to walk virtually pain free.
(30) Prior to signing an agreement for the construction of the home,
plaintiffs did not inform Adams that she suffered from any disability or had
24
any special requirements because of her surgeries.
N.T. 129; Defendant’s Exhibit 1 and View.
19
N.T. 19.
20
N.T. 17-19, 397.
21
N.T. 22-23.
22
N.T. 469-470.
23
N.T. 131-132, 463.
24
6-
-
08-4393 CIVIL TERM
(31) Adams informed plaintiffs that a ranch house would cost more than
a two story home and suggested that plaintiffs choose a two story house
25
plan with a first floor master bedroom.
(32) Plaintiffs were happy with Adams’ suggestion to build a two story
26
house because it would be cheaper.
(33) When the plaintiffs decided on a two story home Mrs. Umbelina did
not ask Adams how her physical limitations would be affected by this type
27
of home.
(34) After the initial meeting between the parties, plaintiffs researched
various building plans and selected one they believed was suitable to Mrs.
28
Umbelina’s needs.
(35) Adams informed plaintiffs that Lot 17 would accommodate the
house plan that plaintiffs had selected, and that it could be built within the
29
applicable setbacks.
(36) Plaintiffs received a proposal from Adams through Purvis in July or
August, 2005 which they discussed with Purvis, their settlement attorney
30
and Adams.
N.T. 24; 130-131; 249; 423.
25
N.T. 130.
26
N.T. 131.
27
N.T. 25-26; Plaintiffs’ Exhibit 5.
28
N.T. 27; 251-252.
29
N.T. 29-30; Plaintiffs’ Exhibit 4.
30
7-
-
08-4393 CIVIL TERM
(37) The specification sheet that was given to the plaintiffs as part of the
proposal documents was typed on Adams & Bream letterhead; however,
the proposal had “Jack Adams Builders, LLC” at the top and the signature
line of the document indicated “authorized signature of Jack Adams on
31
behalf of Jack Adams Builders, LLC.”
(38) The fact that Sid Bream was a partner in Adams & Bream was not
32
a controlling factor in plaintiffs’ choice of selecting a builder.
(39) Plaintiffs’ attorney told Mrs. Umbelina the proposal was fine and
33
she signed the document.
(40) Mrs. Umbelina did not instruct her attorney to add anything to the
34
proposal regarding her physical needs or restrictions. During
construction of the house the Umbelinas did not seek assistance from
their attorney to correct or resolve any of their concerns with the property
35
or the construction of the home.
(41) Jack Adams was an authorized agent of Jack Adams Builders,
36
LLC.
N.T. 137.
31
N.T. 299-300.
32
N.T. 137-138.
33
N.T. 143.
34
N.T. 299.
35
N.T. 425.
36
8-
-
08-4393 CIVIL TERM
(42) There was never any intent to have Adams & Bream Builders, LLC
37
construct the plaintiffs’ home.
(43) The “Adams & Bream Builders, LLC” name on the specification
38
sheet was an inadvertent mistake.
(44) The plaintiffs did not notice that the proposal and specifications
appeared to be coming from two different companies nor did they raise
39
any questions regarding the matter.
(45) The price quoted in the aforesaid documents was $307,000 and
40
included the real estate as well as construction of the house.
(46) The standard agreement for the sale of new construction was
executed on October 13, 2005 by the Plaintiffs and on October 15, 2005
41
by Adams.
(47) Paragraph 12F of the standard agreement for the sale of new
construction provides as follows: “Seller will comply with all restrictions
42
and requirements imposed by any governmental authorities.”
N.T. 426-427.
37
N.T. 426; Defendant’s Exhibit 3.
38
N.T. 30.
39
N.T. 35.
40
Plaintiffs’ Exhibit 6.
41
Plaintiffs’ Exhibit 6.
42
9-
-
08-4393 CIVIL TERM
(48) Paragraph 15 of the standard agreement for the sale of new
construction provides in relevant part that Adams was responsible for the
43
grading of Lot 17.
(49) The Umbelinas’ purchased Lot 17 from Residential Homes
44
Company on November 11, 2005, with a deed dated November 7, 2005.
(50) The deed to the Umbelinas stated that Lot 17 is subject to all
notations and conditions set forth in the final subdivision plan approval of
Jefferson Court. The Umbelinas relied on their attorneys to explain these
45
terms to them.
(51) At the time the Umbelinas purchased Lot 17 it was covered with
over-brush and some trees, the clearing of which began shortly after the
46
Umbelinas closed on the property.
IV. Construction Loan Schedule
(52) The payment schedule authorized by Commerce Bank, the
mortgage company, required that inspections would be made by the bank
47
prior to payment of each draw.
Plaintiffs’ Exhibit 6.
43
N.T. 17. Plaintiff’s Exhibit 7.
44
N.T. 144.
45
N.T. 17-18, 44.
46
N.T. 44.
47
10-
-
08-4393 CIVIL TERM
(53) There was a four draw payment schedule that paid Jack Adams
Builders periodically as construction progressed. Mrs. Umbelina would
48
sign off on the payments made to Jack Adams Builders.
(54) The draw schedule listed Jack Adams Builders as the builder and
the checks from Commerce Bank were made payable to “Jack Adams
49
Builders, LLC.”
(55) The checks were deposited into Jack Adams Builders’ corporate
50
account.
(56) Adams presented the Umbelinas with a final bill on June 26, 2006,
totaling $325,763.44 which was $18,763.44 above the estimated cost of
51
the house.
(57) Mrs. Umbelina wrote a check for the overages payable to “Jack
52
Adams Builders, LLC.”
V. Location of the House on Lot 17
(58) After the November 11, 2005, closing on the property Adams, Linda
Shover, a realtor with Ebener & Associates, Purvis and the Umbelinas met
on Lot 17 to discuss the location of the house on the lot. Prior to this
N.T. 204-205.
48
N.T. 429.
49
N.T. 430.
50
N.T. 87-89; Plaintiffs’ Exhibit 11.
51
N.T. 205.
52
11-
-
08-4393 CIVIL TERM
meeting Adams staked out the approximate location of the lot’s setback
53
restrictions under the township’s ordinance and the subdivision plan.
(59) At the aforesaid meeting, the Umbelinas viewed the setback
stakes, which had been placed by Adams, and agreed to the location of
the house without expressing any concern regarding the steepness of the
54
lot.
(60) Mrs. Umbelina discussed the possibility of putting a pool in the
55
backyard in the presence of Shover, Purvis and Adams.
(61) Adams advised the Umbelinas that the house could not be built
56
past the tree line at the rear of Lot 17.
(62) The location of the house on the lot was limited because the trees
shown on the subdivision and land development plan at the back of Lot 17
could not be removed due to restrictions placed on the subdivision plan by
57
the township,
(63) Adams explained to the Umbelinas that the trees could not be
58
removed because of township restrictions.
N.T. 49. Plaintiffs’ Exhibit 30.
53
N.T. 49, 149.
54
N.T. 150, 275.
55
N.T. 276.
56
N.T. 434 and 435. Defendant’s Exhibit 1.
57
N.T. 482.
58
12-
-
08-4393 CIVIL TERM
(64) At the request of Adams, Purvis spoke to Mrs. Umbelina about
moving the location of the house back an additional 20 feet. Mrs.
Umbelina gave permission to move the house back 12 feet from its
59
original proposed location.
VI. Construction
(65) Plaintiffs desired to have the property excavated in the “cheapest
60
way” possible.
(65) Prior to pouring the foundation, Adams showed Mrs. Umbelina the
61
approximate height of the garage floor by using a story pole.
(66) Adams wanted to confirm that Mrs. Umbelina approved of the
height garage prior to pouring the foundation and explained to her that the
62
house could not be relocated after the foundation was poured.
(67) After seeing the height of the basement walls, upon their
completion, Mrs. Umbelina became concerned that the front yard and
63
driveway would be too steep and relayed that concern to Adams.
(68) Although Adams did not guarantee that Lot 17 would be the same
as the grading of Lot 15, Adams did tell plaintiffs that the grading would
N.T. 50-51, 254, 406-407 431-432.
59
N.T. 34.
60
N.T. 432-433.
61
N.T. 478.
62
N.T. 52-53.
63
13-
-
08-4393 CIVIL TERM
64
be similar and would follow township and county requirements.
(69) Adams was aware that given the location of the house the
driveway was going to be “terribly steep,” and noted that he would not
65
personally want a driveway as steep as the Umbelinas.
(70) Although the house could have been moved back toward the tree
line without violating any setback requirements, doing so would have
66
restricted if not prevented the Umbelinas from constructing a pool.
(71) Adams acknowledged that if the basement had been dug deeper
the driveway would have been flatter, but he did not approach the
Umbelinas about the possibility of digging the basement deeper or
67
reducing the size of the garage walls from nine feet to eight feet.
(72) South Middleton Zoning Ordinance Section 1403 was violated
because no building plans were submitted addressing restrictions and
requirement associated with work within the “steep slope/precautionary
slope zone” where the Umbelinas’ driveway and the front of the house
68
were located.
N.T. 54-55, 58-59 and 445.
64
N.T. 432 and 484.
65
N.T. 295, 303 and View.
66
N.T. 471-472.
67
N.T. 330-331; 333; Plaintiffs’ Exhibit 27.
68
14-
-
08-4393 CIVIL TERM
(73) Neither the Township Enforcement Officers nor Adams were familiar
69
with the requirements of the steep slope ordinance.
(74) Russell E. Yinger (“Yinger”) the South Middleton Township
residential building inspector, did not know the steep slope regulation
existed and never told Adams that Lot 17 was subject to any steep slope
70
requirements.
(75) Yinger never required Adams to get a sealed architect or
engineering plan for the building methods to be used in overcoming
foundation and other structural problems created by the slope
71
conditions.
(76) Yinger testified that he issued the permit without those
72
requirements.
73
(77) Yinger indicated the township approved the house plans.
(78) When the building permit was issued Yinger believed the plans
74
complied with all the codes and ordinance of the township.
N.T. 186-187; 428; 475.
69
N.T. 187.
70
N.T. 187.
71
N.T. 188.
72
N.T. 180; Defendant’s Exhibit 6.
73
N.T. 189.
74
15-
-
08-4393 CIVIL TERM
(79) Yinger inspected the footings, foundation, energy and final
75
inspection on the Umbelina property.
(80) Yinger testified that when a certificate of occupancy is issued by the
township, it is an affirmative statement that the builder can rely upon that
76
the property meets all the applicable township codes.
(81) Following a final inspection June 27, 2006 by Yinger and Timothy
77
Stout, Yinger issued a certificate of occupancy.
VII. Final Inspection/Closing
78
(82) Plaintiffs moved into the house on June 28, 2006.
(83) On June 30, 2006, plaintiffs participated in a walkthrough of the
interior of the house along with Adams, Purvis, and Shover, at which time
plaintiffs prepared a “punch list” of items not completed as of the date of
79
the walkthrough.
(84) During the walkthrough nothing was ever mentioned or placed on
80
the punch list with respect to the driveway being unacceptable.
N.T. 164.
75
N.T. 190-191.
76
N.T. 165, 191; Defendant’s Exhibit 12.
77
N.T. 102.
78
N.T. 91; Plaintiffs’ Exhibit 12 and 13.
79
N.T. 37.
80
16-
-
08-4393 CIVIL TERM
(85) In spite of the numerous items on the punch list, the Umbelinas’
81
stated that they loved the house.
82
(86) Closing on the house was held on June 30, 2006.
(87) Adams did not complete the punch list items by July 6, 2006, as
83
agreed upon at the time of the walkthrough.
(88) Plaintiffs refinanced the construction loan at which time monies
84
were escrowed for grading and seeding of the property.
(89) Adams failed to complete the grading and seeding as promised by
85
August 31, 2006.
(90) On September 1, 2006, plaintiffs met with South Middleton
Township Code Enforcement Officers, Russell Yinger and Timothy Stout,
because they believed Adams had misrepresented various statements
86
about the South Middleton Township code requirements.
(91) Following the meeting with the Township, Mrs. Umbelina
confronted Adams regarding the Code requirements. According to Mrs.
Umbelina, Adams responded that he got the occupancy certificate;
however, he “apologized . . . for not building our house to what we
N.T. 464.
81
N.T. 67.
82
N.T. 93.
83
N.T. 94; Plaintiffs’ Exhibit 15 and 16.
84
N.T. 95
85
N.T. 101 and 258.
86
17-
-
08-4393 CIVIL TERM
needed, and he did not have the experience to build the house that we
87
required.”
(92) On September 22, 2006, Adams sent a letter to Shover at Ebener &
Associates seeking confirmation as to how he should proceed with “the
88
outstanding work.”
(93) By the time Adams sent the aforesaid letter to Shover, the
Umbelinas had reached a point of frustration with Adams and concluded
that Adams had no intention to continue the work on the punch list
89
items.
(94) On September 26, 2006, a consumer protection complaint was filed
by Mr. Umbelina with the Pennsylvania Office of Attorney General. The
complaint was filed against Jack Adams Builders, and did not mention
90
any involvement of Adams & Bream.
(95) The following items on the punch list were not completed by
Adams:
(a) Unfinished painting.
(b) Installation of downspouts.
(c) Correction of the continued mud infiltration into the basement.
(d) Exposed nails in the carpet.
(e) Separation of stairs leading to the second floor.
(f) Unsecured countertops.
(g) Dishwasher cabinet not meeting the floor.
(h) Unsealed wires and pipes on the left side of the house.
N.T. 114.
87
N.T. 441; Defendant’s Exhibit 18.
88
N.T. 98-99; Defendant’s Exhibit 19.
89
N.T. 279-280.
90
18-
-
08-4393 CIVIL TERM
(i) Cracks in the walkway, tilting the air conditioning unit.
91
(j) Rocky topsoil.
VIII. Evaluation by Plaintiffs’ Expert
(96) Gregory Rogalski, a court approved expert, engineer and codes
officer, testified that upon review of the South Middleton Township
approved subdivision plans relating to this property, it was envisioned
that a split-level or bi-level with a garage located in the lower floor facing
92
the front of the house would be constructed.
(97) Construction of a flat first floor home within a “precautionary slope
zone” usually requires a significant amount of earth moving and
93
excavation, resulting in the potential for soil erosion.
(98) The driveway, as constructed, is in violation of South Middleton
Township’s Zoning Ordinance Section 1807, requiring that a driveway not
exceed a slope of seven percent within twelve feet of the street line.
Although plaintiffs’ driveway as an overall slope of eighteen percent, the
first nine feet of the required aforesaid twelve foot area is only .8 percent
94
over the required seven percent.
(99) Although the slope of the driveway and front yard did not meet the
requirements of the township ordinances, Rogalski testified that it would
N.T. 98-99; 104-109; Plaintiffs’ Exhibit 30, photographs 59-76.
91
N.T. 326-328; Plaintiffs’ Exhibit 27.
92
N.T. 329.
93
N.T. 334, 354; Plaintiffs’ Exhibit 27.
94
19-
-
08-4393 CIVIL TERM
have been possible to construct a house on Lot 17 in compliance with the
95
zoning ordinances and building codes.
(100) In Rogalski’s opinion, the only two options to remediate the
sloping/grading issue are to (1) lower the garage or raise the street; or (2)
shift the house further back on the lot at the same elevation. In Rogalski’s
96
opinion, neither option is practical.
(101) During Rogalski’s field observations of the property he found that
anchor straps were missing from the house. These straps are used as a
connection between the framing of the house and the foundation. Such
absence of straps in addition to being a violation of International Resident
Code Section R403.1.5, exposes the house to the possibility of actually
97
lifting up during a windstorm.
(102) Rogalski testified that it would be challenging to correct the failure
98
to install anchor straps.
(103) Rogalski’s field observations also identified significant cracks, with
staining, to the foundation wall, indicating groundwater leakage into the
99
basement.
N.T. 336.
95
N.T. 336.
96
N.T. 338-341; 349; Plaintiffs’ Exhibit 27.
97
N.T. 341.
98
N.T. 341; Plaintiff’s Exhibit 27.
99
20-
-
08-4393 CIVIL TERM
(104) Adams admitted that a homeowner could get water seepage
through the cracks in the foundation and that the basement may need to
100
be sealed on the inside to prevent this from happening.
(105) Rogalski gave his expert opinion that the walls on the first floor
above the cracked foundation have moved as is evidenced by the
separation of the countertops, cabinets, drywall cracking and flooring
101
separation.
(106) Rogalski’s field observations revealed that the insulation in the
home was improperly installed, with the insulation facing out toward the
open basement, which in the event of a fire, would cause the fire to spread
102
more rapidly.
(107) Rogalski noted a violation of International Residential Code Section
R319.1.3, in that non-pressure treated wood was in direct contact with
concrete, permitting moisture from the concrete to decay the wood
103
causing a structural concern or devaluation of the home.
(108) The stone veneer on the front of the house is separating from the
104
house.
N.T. 453-454; Plaintiffs’ Exhibit 30; photograph 47.
100
N.T. 346-347; Plaintiffs’ Exhibit 27; Plaintiffs’ Exhibit 30; photographs 59-68.
101
N.T. 342; 350; Plaintiffs’ Exhibit 27.
102
N.T. 344; 350; Plaintiffs’ Exhibit 27.
103
Plaintiffs’ Exhibit 30; photograph 74.
104
21-
-
08-4393 CIVIL TERM
(109) In Rogalski’s opinion, “the general condition of the construction can
be rated as poor as compared to homes of similar age.”
IX. Additional Problems since Plaintiffs took Possession
(110) Due to grading issues, plaintiffs have experienced mud infiltration
into their basement, under the basement door, whenever it rains.
(111) Post-construction, plaintiffs paid Rose Construction $2,000 to install
105
a retaining wall to help alleviate this problem.
(112) Adams acknowledged the mud infiltration problem and that he had
106
not addressed it.
(113) After taking possession of the house, plaintiffs were required to
install gutters on the front of the house due to a leaking roof. Repair work
107
was performed by Slate Roofing at the cost of $965.33.
(114) After taking possession of the house plaintiffs noticed that both the
siding and downspout were coming off of the house. Plaintiffs had both
108
situations corrected.
(115) Due to water infiltration, plaintiffs were required to hire a contractor
109
to replace wet drywall in the garage.
(116) Plaintiffs contracted with Russell Silverman for drywall repair
N.T. 63-64; 117-118; Plaintiffs’ Exhibit 19 and Exhibit 30; photographs 18-23.
105
N.T. 450.
106
N.T. 75-76; 84; 123; Plaintiffs’ Exhibit 30; photographs 36 and 37; Plaintiffs’
107
Exhibit 23.
N.T. 78; Plaintiffs’ Exhibit 30; photographs 39-41.
108
N.T. 83-85; Plaintiffs’ Exhibit 30; photographs 53-58.
109
22-
-
08-4393 CIVIL TERM
110
caused by water damage.
(117) Mr. Silverman removed drywall damaged by the leaking roof and
discovered there was no insulation underneath the drywall between the
111
garage and the house.
(118) Instead, Mr. Silverman discovered that Adams had inserted scrap
112
pieces of drywall into the wall.
(119) Silverman replaced the drywall with a thicker drywall having an
113
appropriate fire rating for a garage.
114
(120) Silverman’s remediation efforts cost the plaintiffs $4,850.
(121) Post-construction and at the recommendation of Adams, plaintiffs
had some terraces put into the property to address the grading issue and
115
enable Mrs. Umbelina to maintain the property.
116
(122) Plaintiffs paid Fry’s Landscaping $15,651.86 to install terraces.
(123) After taking possession of the house, plaintiffs learned that there
was a non-grounded wire to their fuel line. Plaintiffs paid UGI $121 to
N.T. 152-153; Plaintiffs’ Exhibits 28 and 29.
110
N.T. 154.
111
N.T. 155.
112
N.T. 158-159.
113
Plaintiffs’ Exhibit 28-29.
114
N.T. 65; 70-71; 259; Plaintiffs’ Exhibit 30; photographs 27-28.
115
N.T. 116-117; Plaintiffs Exhibit 18.
116
23-
-
08-4393 CIVIL TERM
117
ground this wire.
(124) Due to the Code requirements and safety concerns, plaintiffs paid
118
Gerald Brown $448.49 to install a railing on the porch.
X. Discussion
A. Liability of Jack Adams, individually, and
Adams & Bream Builders, LLC
We begin our discussion with the easiest matter to resolve: were Jack
Adams, individually and/or Adams & Bream Builders, LLC parties to the contract
with plaintiffs? As noted in the finding of fact, but for the inadvertent use of
Adams & Bream letterhead on the specification sheet, there is nothing to connect
this entity with the construction of plaintiffs’ home. Every other document, the
draw schedule, the checks and even plaintiffs’ consumer protection complaint
filed with the Pennsylvania Attorney General references Jack Adams Builders
exclusively. Furthermore, the court finds no deception on the part of Adams or
anyone representing the sellers regarding the involvement of Adams & Bream.
The attempt to include Mr. Bream appears to be based less on his involvement
and more on a perception that a former major league baseball player has deep
pockets. Perceptions aside, neither the facts nor the law will permit that.
Slightly more difficult is the question of the individual defendant, Jack
Adams. But for the fact that he is the sole member of Jack Adams Builders, its
authorized signor and its primary human face on and off the jobsite, there is
nothing in the record to warrant that we pierce the corporate veil of a sham
N.T. 119-120; Plaintiffs; Exhibit 20.
117
N.T. 122-124; Plaintiffs’ Exhibits 22 and 25.
118
24-
-
08-4393 CIVIL TERM
corporation, which Jack Adams Builders is decidedly not. Alternatively, plaintiffs
suggest that we rely on the participation theory set forth in Wicks v. Milzoco
Builders, Inc.,470 A.2d 86 (Pa. 1983), claiming that Adams participated in
various fraudulent actions, which we address hereafter.
First, plaintiffs claim that Adams misrepresented the corporate structure of
Jack Adams Builders and his relationship to Adams & Bream. The court is not
persuaded by this argument, which is not borne out by the facts. If plaintiffs did
not understand who was building the house and with whom they had contracted,
it was because they failed to pay attention, not because of any alleged
misrepresentation. Plaintiffs’ consumer protection complaint against Jack Adams
Builders in September of 2006 belies any confusion on their part.
Second, it is alleged that Adams misrepresented his building experience.
Although Adams’ abilities fell short of what this job ultimately required, Adams did
not intentionally mislead plaintiffs regarding his experience. Adams’ work for
McCoy Brothers, Inc., his sole proprietorship as a remodeler, his 4 to 5 years as
a partner with Adams & Bream and his selection as a contractor by Ebener &
Associates, were not misrepresented. He did not need to, nor did he, embellish
his experience to induce plaintiffs to enter into the contract. Unfortunately, his
experience proved to be insufficient.
The primary focus of plaintiffs’ “participation” claim lies with the
assurances that Adams gave regarding the steepness of the driveway. The court
acknowledges that the driveway is steep – as Adams noted, “we all knew it was
25-
-
08-4393 CIVIL TERM
119
steep.” In fact, as the court approached the development for its view, the
Umbelina residence was clearly visible from a considerable distance, perched at
the apex of the development. Consequently, the court was not surprised, after
traveling up the steady incline of Woodlawn Drive, to find a home with an
unmatchable view. The driveway is steeper than the court would desire, and we
sympathize with the plaintiffs’ concerns, but that is the price one pays for a
picturesque view of the valley.
If the court was not startled by the steepness, nor, should it have been a
post-construction revelation to anyone involved in this transaction. Once the site
of the home was determined, and Mrs. Umbelina was unquestionably involved in
that process, the steepness of the grade of the yard and driveway were
inevitable. Moving the house back another 10 or 20 feet would, perforce, have
lessened the slope, but under no scenario does the court find that this driveway
would have been an easy climb for anyone other than Lance Armstrong.
Therefore, the question of what Adams might have said to the plaintiffs
regarding the steepness is almost irrelevant. Whether Adams merely said he
would try to meet plaintiffs’ needs and they were in good hands or if he
absolutely guaranteed them that driveway would be a gradual, moderate incline
is not decisive. No amount of handholding promises or bald-faced lies could
obscure the fact that the “finished” driveway, taking the same straight path up a
hill from the street to the garage, is going to be just as steep as the “construction”
driveway. As plaintiffs’ expert noted, the only way to remediate the slope is to
N.T. 484.
119
26-
-
08-4393 CIVIL TERM
lower the garage, raise the street or move the house back, none of which are
viable today. Neither the court nor the contractor can bend the laws of nature.
The fact remains that the Umbelinas chose this lot primarily for its cost,
size and view. With that choice, they were not only locked into the contractor,
but they were also locked into a house on a hill. Perhaps, they were so
enamored with the view of the valley that their perspective of the slope of the
property was distorted. Regardless, we do not find that Adams’ opinions,
statements about codes or even his own wishful thinking regarding the driveway
constitute fraudulent misrepresentations that expose him to any personal liability.
B. Rescission
With respect to the remaining defendant, Jack Adams Builders, the court
now turns to plaintiffs’ request for the equitable remedy of rescission. In an
equity matter, we may “fashion a remedy based upon consideration of fairness,
justness, and right dealing in a particular situation as contrasted with strictly
formulated rules of common law.” Armstrong School District v. Armstrong
Education Assoc., 595 A.2d 1139, 1142 n.2 (Pa. 1991). In doing so, we are
expected to consider the panoply of interests affecting the parties and have
broad discretion in effectuating a remedy. Id. Specifically, with respect to
rescission, the purpose of this doctrine is to return the parties as nearly as
possible to their original positions with regard to the subject matter of the
contract. Lackner v. Glosser, 892 A.2d 21, 31 n.7 (Pa. Super. 2006). Rescission
amounts to the unmaking of a contract and results in an abrogation of all rights
and responsibilities of the parties towards each other from the inception of the
27-
-
08-4393 CIVIL TERM
contract. Metropolitan Property and Liability Ins. Co. v. Pennsylvania, 509 A.2d
1346, 1348 (Pa. Cmwlth. 1986), aff’d 535 A.2d 588 (Pa. 1987).
The question is whether Jack Adams Builders breached the very essence
of the contract to defeat the object of the parties and justify the extraordinary
relief of rescission. Castle v. Cohen, 676 F.Supp. 620, 627 (E.D.Pa. 1979) aff’d
840 F.2d 173 (3d. Cir. 1988). The court will first look at whether a breach
occurred and then turn to the related issue of whether plaintiffs were induced to
enter into and consummate the contract by fraud.
Plaintiffs’ various allegations that Jack Adams Builders breached its
contractual obligations ultimately boil down to (1) an allegation that the defendant
failed to properly site the house on Lot 17, leading to an unreasonably sloped
front yard and driveway, contrary to the South Middleton Township grading
requirements; and (2) that the defendant failed to construct a house of
reasonable workmanship and value. With respect to the first allegation, as
discussed above, we have found that the plaintiffs were intimately involved in
siting the house on Lot 17. Moreover, when defendant asked to move the site of
the house back plaintiffs declined to do so in order to preserve a backyard in
which a pool could be constructed. Furthermore, Mrs. Umbelina was present to
observe and approve of the site of the house before the foundation was poured.
To be sure, the basement could have been dug deeper or the height of the
basement walls could have been reduced; however, speculation after the fact
does not constitute a breach when the slope of the driveway was readily
ascertainable by plaintiffs by simple observation.
28-
-
08-4393 CIVIL TERM
Likewise we decline to find the defendant liable for failing to comply with
the South Middleton Township (“Township”) grading requirements, including the
7% slope requirement and the steep slope ordinance. In this respect, the
Township bears the brunt of responsibility. The Township never requested an
engineer’s statement or any other materials concerning the driveway’s steep
slope nor did it apprise Adams of any code violations during construction. To the
contrary, until approached by plaintiffs in September, 2006, the Township (and
defendant) believed that all of the code requirements had been met, resulting in
the issuance of a certificate of occupancy. Unfortunately, if the Township, at this
late date, required the regrading of the first twelve feet of the driveway so that it
conforms to code, this would have the effect of making the driveway even
steeper than it is in its current state. Under these circumstances, the court is
reluctant to find that Jack Adams Builders should be held responsible for violating
code requirements that were unknown and unenforced by the Township.
The second manner in which plaintiffs allege that Jack Adams Builders
breached its contractual obligations involve the faulty workmanship noted in
finding of fact number 95. Suffice it to say that plaintiffs’ claim in this respect has
merit. Our Supreme Court has found that “as between the builder-vender and
the vendee, the position of the former, even though he exercises reasonable
care, dictates that he bears the risk that a home which he has built will be
functional and habitable in accordance with contemporary community standards.”
Elderkin v. Gaster, 288 A.2d 771, 777 (Pa. 1972) citing Kellogg Bridge Co. v.
Hamilton, 110 U.S. 108 (1884). Furthermore, a buyer justifiably relies on the skill
29-
-
08-4393 CIVIL TERM
of the builder because the builder holds himself out as having the necessary
expertise with which to produce an adequate dwelling, and “has by far the better
opportunity to examine the suitability of the home site and to determine what
measures should be taken to provide a home fit for habitation.” Id.
We have previously addressed the issue of the site of the home, finding
that plaintiffs’ involvement nullifies defendant’s liability. We turn, therefore, to the
issue of habitability, where the quality of the finished product reveals a house that
is less than what was bargained for. As plaintiffs’ expert noted, “the general
condition of construction can be rated as poor as compared to homes of similar
age,” and contrary to Elderkin, it was not “functional and habitable in accordance
with contemporary community standards.” Elderkin, 288 A.2d at 777.
Although, we find that defendant did not misrepresent his experience in
order to induce plaintiffs to enter into the contract, he failed to live up to his
abilities with the construction of the house. Consequently, we find that plaintiffs
are entitled to an award of restitution for their losses. We recognize that such an
award normally accompanies an order granting rescission of the contract (see
Metz v. Quaker Highlands, Inc., 714 A.2d 447 (Pa. Super. 1998) and Maker v.
Cambridge Chase, Inc., 725 A.2d 757 (Pa. Super. 1999)). Although we decline
to grant rescission and direct Jack Adams Builders to return the purchase price in
exchange for conveying the property to Jack Adams Builders, we believe that
equity requires an order of restitution for defendant’s faulty work.
In short, we do not believe that the extraordinary relief of rescission is
appropriate in this case. Plaintiffs have not proven that they were fraudulently
30-
-
08-4393 CIVIL TERM
induced to enter the contract by Adams or that they relied on any
misrepresentations by Adams. Plaintiffs knowingly purchased a lot with a steep
120
slope, selected a two-story house design, balked at moving the foundation of
the house back further in order to preserve the possibility of installing a pool, and
walked the property repeatedly during construction. Adams made no intentional,
material misrepresentations to induce plaintiffs in this process and warrant
rescission.
Nevertheless, Jack Adams Builders failed to perform in a workmanlike
manner, resulting in losses to plaintiffs, which may not address their concerns
with the site of the house, but will enable them to address their concerns over the
sight of the house.
C. Plaintiffs’ Claims under Pennsylvania’s Unfair Trade Practices
and Consumer Protection Law
At trial, plaintiffs proceeded under the “catchall” provision of the UTPCPL,
73 P.S. Section 201-2(4)(xxi). For all the aforesaid reasons, we find that plaintiffs
failed to make out a cause of action for fraud, which is a requirement under the
“catchall” provision. Skurnowicz v. Lucci, 798 A.2d 788 (Pa. Super. 2002).
Accordingly, relief under the UTPCPL is denied.
Based upon the foregoing, the following order will be entered:
ORDER OF COURT
AND NOW, this day of December, 2010, following a bench trial
IT IS ORDERED AND DIRECTED
held over the course of three days, as follows:
Although none of the parties were aware of the Township’s steep slope
120
requirements, they all had eyes to see.
31-
-
08-4393 CIVIL TERM
(1) A verdict is entered in favor of Jack Adams, individually, and
Adams & Bream Builders, LLC, as to all claims in that they were not
parties to the contract at issue;
(2) The court finds that plaintiffs failed to meet their burden of proof to
establish that they reasonably relied upon any material
misrepresentations of defendant Jack Adams Builders, LLC and,
consequently, a verdict is entered in favor of Jack Adams Builders,
LLC with respect to plaintiffs request for a rescission of the contract;
(3) Plaintiffs are awarded the sum of $26,036.68 as damages from
defendant Jack Adams Builders, LLC for improvements plaintiffs made
to the property to remedy defendant’s faulty work;
(4) A verdict is entered in favor of Jack Adams Builders, LLC with
respect to plaintiffs’ claim under the Unfair Trade Practices and
Consumer Protection Law.
(5) Plaintiffs are awarded costs of suit; and
(6) No other relief is granted to either side.
By the Court,
Albert H. Masland, J.
Ronald L. Finch, Esquire
For Plaintiffs
E. Ralph Godfrey, Esquire
For Defendants
:saa
32-
-