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HomeMy WebLinkAbout2005-2884 Civil GH SINKING SPRING ASSOCIATES, L.P., Plaintiff IN THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYLVANIA v. CIVIL ACTION-LAW MSB PROPERTY, LLC, Defendant NO. 05-2884 CIVIL TERM IN RE: PLAINTIFF'S PRELIMINARY OBJECTIONS TO DEFENDANT'S COUNTERCLAIM BEFORE HESS and OLER, JJ. OPINION and ORDER OF COURT OLER, 1., March 27,2006. In this action for declaratory judgment, Plaintiff GH Sinking Spring (Plaintiff/Seller), a seller of real property, has brought suit for a declaration as to its rights concerning a down payment made by Defendant MSB Property (Defendant/Buyer), the buyer of the real property. 1 Plaintiff seller has asserted it is entitled to the deposit based upon Defendant's alleged termination of the parties' "Agreement of Sale" outside of a designated "due diligence period.,,2 In response to Plaintiff s assertions, Defendant has filed counterclaims based upon theories of breach of contract and unjust emichment. 3 For disposition at this time are Plaintiffs preliminary objections in the nature of a demurrer to Defendant's unjust emichment claim.4 The ground for the demurrer is that "[t]he doctrine of unjust emichment is not applicable when the 1 See generally Action for Declaratory Judgment, filed June 3, 2005 (hereinafter Compl. ~ ~; Answer with New Matter and Counterclaim of Defendant MSB Property, LLC, filed August 4, 2005 (hereinafter Answer ~ ~. 2 Compl. ~~ 7-24. 3 Answer ~~ 36-57. 4 Preliminary Objections ~~ 1-9, filed August 25,2005 (hereinafter Prelim. Obj. ~~. relationship between the part[ies] is founded on a written agreement or express contract. "S Plaintiffs preliminary objections were argued on January 11, 2006. For the reasons stated in this opinion, the preliminary objections will be denied. STATEMENT OF FACTS In reviewing a preliminary objection in the nature of a demurrer, which challenges the legal sufficiency of a pleading, the court "must accept all material facts set forth in the [pleading] as well as all the inferences reasonably deducible therefrom as true." Powell v. Drumheller, 539 Pa. 484, 489, 653 A.2d 619, 621 (1995) (citations omitted). Based upon this principle, the facts of this case may be summarized as follows: Plaintiff GH Sinking Spring is a Pennsylvania limited partnership with its principal place of business at 20 Erford Road, Lemoyne, Cumberland County, Pennsylvania.6 Defendant MSB Property is a California limited liability company based in Huntington Beach, California. 7 On January 10, 2005, Plaintiff and Defendant entered into an Agreement of Sale in which Plaintiff was to sell Defendant certain real property, known as Units 1, 3, and 4 at a shopping complex known as Sinking Spring Retail Center, Berks County, Pennsylvania. 8 The purchase price for this property was to be $7,525,000.00, subject to certain adjustments.9 As part of the payment for the purchase price, Defendant provided a down payment of $100,000.00 to KLNB, 5 Prelim. Obj. ~ 5; See generally Prelim. Obj. ~~ 1-9. 6 Compl. ~ 1; Answer ~ 1. 7 Compl. ~ 2; Answer ~ 2. 8 Compl. ~ 4, Ex. A; Answer ~ 4. 9 Compl. ~ 4, Ex. A; Answer ~ 4. 2 LLC, which deposited the money into an interest bearing escrow account.10 KLNB has since paid the $100,000.00 deposit into the court.ll According to Paragraph 11 of the Agreement of Sale, Defendant was afforded a due diligence period in order to perform such tests, investigations, assessments, and audits, and to make such inquiries, as it deemed necessary or appropriate, to evaluate the soundness of its decision to purchase the property.12 If Defendant were to be sufficiently dissatisfied with any of its findings, Defendant could terminate the Agreement of Sale and receive a refund of its down payment, provided that it provided Plaintiff with written notice of its intent to terminate on or before the last day of the due diligence period. 13 Termination of the Agreement of Sale after the due diligence period would constitute a waiver by Defendant of its right to the down payment. 14 The original due diligence period was to end on January 30, 2005.1S The parties then agreed to extend the due diligence period to February 11, 2005.16 There is a dispute between Plaintiff and Defendant as to whether further extensions of the due diligence period were agreed upon; 17 however, resolution of this dispute is unnecessary to a disposition of Plaintiff s preliminary objections. 10 Answer ~ 47; Stipulation, filed November 15, 2005. Pursuant to the Agreement of Sale, Defendant was supposed to deposit $150,000.00 with KLNB. Compl. ~ 4, Ex. A; Answer ~ 4. 11 Order of Court, November 28,2005; Order of Court, January 18,2006. KLNB was originally named as a defendant in this action. See Compl. However, Plaintiff and Defendant stipulated that KLNB was named as a defendant based solely on its status as escrow agent and holder of the deposit, and that KLNB could be dismissed from the action upon payment of the $100,000.00 deposit into the court. Stipulation. KLNB has since paid the $100,000.00 deposit into the court, and has been dismissed from this action. Order of Court, November 28,2005; Order of Court, January 18,2006. 12 Compl. ~ 4, Ex. A; Answer ~ 4. 13 Compl. ~ 4, Ex. A; Answer ~ 4. 14 Compl. ~ 4, Ex. A; Answer ~ 4. 15 Compl. ~ 4, Ex. A; Answer ~ 4. 16 Compl. ~ 11, Ex. B; Answer ~ 11. 17 Compl. ~~ 12-19; Answer ~~ 12-19, 39-41, 43-44, 48-52. 3 On February 22, 2005, Defendant sent a letter to Plaintiff requesting certain amendments to the Agreement of Sale and stating that, if such amendments were not made, Plaintiff should consider the Agreement of Sale terminated.18 Plaintiff has alleged that the termination was invalid because it was made after the expiration of the due diligence period; thus, Plaintiff has asserted that Defendant has waived its right to the $100,000.00 down payment. 19 Defendant, on the other hand, has alleged that the due diligence period was extended, and that Plaintiff was given written notice of the termination during the due diligence period; thus, Defendant has asserted that it is entitled to a return of the $100,000.00 down payment. 20 Additionally, Defendant has advanced a claim for unjust emichment, contending that Plaintiff would be unjustly emiched if it were to be paid the down 21 payment. On August 25, 2005, Plaintiff filed preliminary objections to Defendant's answer-specifically to Defendant's unjust emichment claim-stating that "[t]he doctrine of unjust emichment is not applicable when the relationship between the part[ies] is founded on a written agreement or express contract.,,22 DISCUSSION A preliminary objection in the form of a demurrer should be sustained only when, "on the facts averred, the law says with certainty that" the position challenged by the demurrer cannot prevail. Powell v. Drumheller, 539 Pa. 484, 489, 653 A.2d 619, 621 (1995). If any lingering doubt remains as to whether to sustain the demurrer, "this doubt should be resolved in favor of [the nonmoving party]." Presbyterian Medical Center v. Budd, 2003 P A Super. 323, ,-r6, 832 A.2d 1066, 1070 (2003). 18 Compl. ~ 15, Ex. E; Answer ~~ 15,45. 19 Compl. ~~ 16-19. 20 Answer ~~ 32-33, 39-45,48-53. 21 Answer ~~ 54-57. 22 Prelim. Obj. ~ 5. See generally Prelim. Obj. ~~ 1-9. 4 Under Pennsylvania Rule of Civil Procedure 1 020( c), "[ c ]auses of action may be pleaded in the alternative." Thus, although it may be true that a claimant cannot recover on more than one theory in a given case, at the pleading stage he or she is not required to make an election as to that theory. See Braginetz v. Foreign Motor Sales, Inc., 76 Dauphin Co. 1 (1960). This principle has been emphasized by the Honorable Edward E. Guido of this court as follows: [In their preliminary objection,] Defendants' only argument is that quantum meruit relief is not available where the parties' relationship is founded on an express agreement. They have cited numerous cases which stand for this proposition. However, not one of those cases involve an objection to the pleadings. The reason is clear. Pennsylvania Rule of Civil Procedure 1 020( c) unequivocally provides that causes of action may be pleaded in the alternative. It has long been the law of this Commonwealth that "... plaintiffs should not be forced to elect a particular theory in pursuing a claim" at the pleadings stage. Schreiber v. Republic Intermodal Corp., 473 Pa. 614, 375 A.2d 1285 (1977). There is not one scintilla of doubt that Defendants' preliminary objection should be denied. Humbert v. Gates, 47 Cumberland L.1. 186, 187 (1998), aff'd, 760 A.2d 437 (Pa. Super. Ct. 2000). In the present case, as a more complete record is developed, Plaintiff s position that unjust emichment is not a tenable theory upon which relief can be granted to Defendant may become more evident. However, such a conclusion at the pleadings stage would not be warranted. ORDER OF COURT AND NOW, this 2ih day of March, 2006, upon consideration of Plaintiff s preliminary objections in the nature of a demurrer to Defendant's unjust emichment claim, and for the reasons stated in the accompanying opinion, the preliminary objections are denied. 5 Stephen C. Nudel, Esq. Andrew T. Kravitz, Esq. 219 Pine Street Harrisburg, P A 17101 Attorneys for Plaintiff Paul 1. Cianci, Esq. Eizen, Fineburg & McCarthy, P.C. Two Commerce Square, Suite 3410 2001 Market Street Philadelphia, P A 19103 Attorney for Defendant BY THE COURT, s/ 1. Wesley Oler, Jr. 1. Wesley Oler, Jr., 1. 6 7 GH SINKING SPRING ASSOCIATES, L.P., Plaintiff IN THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYLVANIA v. CIVIL ACTION-LAW MSB PROPERTY, LLC, Defendant NO. 05-2884 CIVIL TERM IN RE: PLAINTIFF'S PRELIMINARY OBJECTIONS TO DEFENDANT'S COUNTERCLAIM BEFORE HESS and OLER, JJ. ORDER OF COURT AND NOW, this 2ih day of March, 2006, upon consideration of Plaintiff s preliminary objections in the nature of a demurrer to Defendant's unjust emichment claim, and for the reasons stated in the accompanying opinion, the preliminary objections are denied. BY THE COURT, 1. Wesley Oler, Jr., 1. Stephen C. Nudel, Esq. Andrew T. Kravitz, Esq. 219 Pine Street Harrisburg, P A 17101 Attorneys for Plaintiff Paul 1. Cianci, Esq. Eizen, Fineburg & McCarthy, P.C. Two Commerce Square, Suite 3410 2001 Market Street Philadelphia, P A 19103 Attorney for Defendant 9