HomeMy WebLinkAbout92-3089 Civil CARL D. HABIG and : IN THE COURT OF COMMON PLEAS OF
ANNE H. HABIG, : CUMBERLAND COUNTY, PENNSYLVANIA
Plaintiffs :
:
v. : CIVIL ACTION - LAW
:
MARY JANE SPENCER, t/a :
and d/b/a WINDSOR RIDGE :
HOMES, and JOHN H. :
HOCKER, :
Defendants : NO. 3089 CIVIL 1992
IN RE: ADJUDICATION
BEFORE OLER, J.
ORDER OF COURT
AND NOW, this %~ day of September, 1995, upon consideration
of the Amended Complaint of Plaintiffs, and of the Counterclaim of
Defendant Mary Jane Spencer, trading and doing business as Windsor
Ridge Homes, following a nonjury trial and for the reasons stated
in the accompanying Opinion, the court makes the following
adjudication:
1. On Plaintiffs' Amended Complaint as it relates to unfair
trade practices, the court finds in favor of Defendants.
2. On the balance of Plaintiffs' Amended Complaint, and on
the Counterclaim of Mary Jane Spencer, the court finds in favor of
Carl D. Habig and Anne H. Habig and against Mary Jane Spencer for
the overall amount of $30,726.28, plus interest at the legal rate
from September 1, 1991, with the further order and direction that
Mary Jane Spencer save the Habigs harmless from any claim by her
company or its unpaid subcontractors which serves to encumber
Plaintiffs' property.
BY THE COURT,
J Wesley Ole~Jr., j.
James D. Bogar, Esq.
Andrew C. Sheely, Esq.
5 West Main Street
Shiremanstown, PA 17011
Attorneys for Plaintiffs
Sally J. Winder, Esq.
701 East King Street
Shippensburg, PA 17257
Attorney for Defendant
:re
CARL D. HABIG and : IN THE COURT OF COMMON PLEAS OF
ANNE H. HABIG, : CUMBERLAND COUNTY, PENNSYLVANIA
Plaintiffs :
:
v. : CIVIL ACTION - LAW
:
MARY JANE SPENCER, t/a :
and d/b/a WINDSOR RIDGE :
HOMES, and JOHN H. :
HOCKER, :
Defendants : NO. 3089 CIVIL 1992
IN RE: ADJUDICATION
BEFORE OLER, J.
OPINION and ORDER OF COURT
Oler, J.
This building construction case arises out of the construction
by Defendant Mary Jane Spencer, trading and doing business as
Windsor Ridge Homes, of a house for Plaintiffs Carl D. Habig and
Anne H. Habig. Defendant John H. Hocker served as agent and
foreman for Defendant Spencer.
Plaintiffs maintain, inter alia, that the construction work
was defective and incomplete. Defendant Spencer maintains, inter
· alia, that money owed to her company for the construction was not
paid.
A bench trial was held by the writer of this Opinion. For the
reasons stated herein, the court will find in favor of Plaintiffs
and against Defendant Spencer in the amount of $30,726.28.
STATEMENT OF FACTS
Procedural history. Plaintiffs commenced this action on
September 1, 1992, by the filing of a complaint. As the result of
NO. 3089 CIVIL 1992
preliminary objections to the complaint, and a ruling which
sustained the objections in part,~ Plaintiffs filed an amended
complaint on February 8, 1993.
Plaintiffs' amended complaint consisted of four counts. Three
counts were against Defendant Spencer alone, and were entitled
"breach of contract, .... construction delays" and "breach of
warranty." One count was against both Defendant Spencer and
Defendant Hocker, and was entitled "unlawful acts and trade
practices." The complaint sought damages in liquidated amounts of
$90,717.96 and $11,985.44 on the breach of contract and
construction delay counts, and unliquidated damages in excess of
$10,000.00 on the breach of warranty count and on the unlawful
trade practices count.
Defendants filed an answer and counterclaim on March 5, 1993.
The counterclaim, which was brought on behalf of Defendant Spencer
only, alleged that Plaintiffs had unilaterally terminated the
contract, failed to pay for extras, and failed to pay the full
contract price. It sought damages from Plaintiffs in the amount of
$37,518.32. Plaintiffs filed a reply to the counterclaim on March
29, 1993.
Trial was held on May 23, May 24, August 4, August 5, and
October 21, 1994. Pursuant to requests of counsel, the court
authorized the submission of proposed findings of fact, conclusions
~ See Opinion and Order of Court, January 28, 1993.
2
NO. 3089 CIVIL 1992
of law and briefs within three weeks of the filing of any requested
portions of the trial transcript. The last such transcript portion
was filed on April 24, 1995, and counsels' submissions have been
received.
Findinqs of fact. Plaintiffs are Carl D. Habig and Anne H.
Habig, a--married couple now residing at 21951 Amberson Road,
Amberson, Franklin County, Pennsylvania.2 Defendants are Mary Jane
Spencer and John H. Hocker, who live at 203 Log Cabin Road,
Newville, Cumberland County, Pennsylvania.3
Defendant Hocker became involved in the building construction
business in the 1950's.4 From 1950 through 1988, as a self-
employed builder, he constructed between 150 and 200 homes.5
Defendant Spencer's background is that of a homemaker.~ Defendants
have lived together since 1987.?
In 1988, a company was formed with the fictitious or trade
name of Windsor Ridge Homes, as a vehicle for Defendant Spencer's
2 N.T. (5/23/94 - Carl Do Habig) 2; N.T. (8/5/94 - Anne H.
Habig) 61.
3 N.T. (10/21/94 - Mary Jane Spencer) 109; N.T. (8/5/94 -
John H. Hocker) 4; N.T. (10/21/94 - John H. Hocker) 74-75.
N.T. (10/21/94 - John H. Hocker) 73.
5 N.T. (10/21/94 - John H. Hocker) 76.
N.T. (10/21/94 - Mary Jane Spencer) 148; N.T. (10/21/94 -
John H. Hocker) 73.
7 N.T. (10/21/94 - Mary Jane Spencer) 153.
3
NO. 3089 CIVIL 1992
entry into the construction business.8 Defendant Hocker, who had
an income from social security, acted as an unpaid supervisor for
Windsor Ridge Homes.9 As a practical matter, he also ran the
company.~° Until the fall of 1990, Windsor Ridge Homes had engaged
in only a few small jobs.~
In April of 1990, Plaintiffs made a successful offer to
purchase a 120-acre tract containing a farmhouse, built in 1756, at
21951 Amberson Road, Amberson, Franklin County, Pennsylvania.~2
Their plans with respect to the property were described by Mr.
Habig as follows:
[The farmhouse was] probably one of the
oldest farms in the county, if not the oldest
farm in the county. We planned to renovate
that. And it had a - on the back of that,
later, in the 1800s, there was a frame
structure, two-story frame structure, that was
built that was not salvageable. We planned to
rip that down and build a new addition on the
back of that farmhouse. It's a beautiful spot
to have. It's got fields and streams and
trout and turkeys.~3
Prior to settlement on the property, Plaintiffs engaged a
8 N.T. (10/21/94 - John H. Hocker) 73.
9 N.T. (10/21/94 - John H. Hocker) 74.
~o See, e.g., N.T. (5/23/94 - Carl D. Habig) 17-21; N.T.
(8/5/94 - John H. Hocker) 26.
N.T. (10/21/94 - John D. Hocker) 76.
N.T. (5/23/94 - Carl D. Habig) 2-3.
N.T. (5/23/94 - Carl D. Habig) 3.
4
NO. 3089 CIVIL 1992
Lancaster architect to draft plans for the addition, which was in
essence a second house on the premises.TM Settlement on the
property took place on June 5, 1990.~5
Plaintiffs contacted several builders in the area, including
Defendant Hocker, and solicited bids for the house on the basis of
plans detailing a 2,533 square foot structure.~6 Defendant Hocker
quoted a price of $150,000.00.~7
Plaintiffs decided to increase the size of the house by about
100 square feet, and to that end secured revised plans from the
architect for a 2,637 square foot house in August of 1990.~8 They
presented these plans, with a list of specifications which they had
prepared, to Defendant Hocker on August 27, 1990.~9 After making
a number of phone calls to obtain quotes from persons such as
potential subcontractors, Defendant Hocker quoted a price on the
basis of the revised plans of $160,000.00.20
N.T. (5/23/94 - Carl D. Habig) 4.
N.T. (5/23/94 - Carl D. Habig) 3.
N.T. (5/23/94 - Carl D. Habig) 5-9. Renovation of the old
farmhouse on the property, which was eventually contracted for on
a time-and-materials basis, is not directly involved in the present
litigation. Id. 6-7.
N.T. (5/23/94 - Carl D. Habig) 8.
N.T. (5/23/94 - Carl D. Habig) 10.
N.T. (5/23/94 - Carl D. Habig) 11.
20 N.T. (5/23/94 - Carl D. Habig) 12.
5
NO. 3089 CIVIL 1992
A day or so later, Plaintiffs called Defendant Hocker and told
him that they had decided to engage him.2~ Plaintiffs made
arrangements to meet with Defendant Hocker on September 5, 1990, at
which time Mr. Hocker was to supply a basic contract, which had
been previously shown to Plaintiffs, with the specifications
provided by Plaintiffs integrated into it.22
On September 5, 1990, Plaintiffs met with Defendant Hocker at
Defendants' residence.23 The contract document which Plaintiffs had
anticipated would be ready had not been drawn up, and a
considerable amount of time was expended as Defendant Hocker
undertook to merge Plaintiffs' specifications into the aforesaid
basic contract for the purpose of creating a unified written
agreement.~4 Eventually, Defendant Spencer joined the conference.
When Ms. Spencer joined the conference, Plaintiffs learned for
the first time that, because of a divorce in which Defendant Hocker
was involved, Defendants had decided that Ms. Spencer, doing
2~ N.T. (5/23/94 - Carl D. Habig) 20-21.
N.T. (5/23/94 - Carl D. Habig) 12-13.
N.T. (5/23/94 - Carl D. Habig) 14.
N.T. (5/23/94 - Carl D. Habig) 13-14. A disagreement
exists between Plaintiffs and Defendant Hocker as to whether the
list of specifications on September 5, 1990, was the same list as
that provided by the Plaintiffs on August 27, 1990, or a more
elaborate one. Compare N.T. (5/23/94 - Carl D. Habig) 14 with N.T.
(8/5/94 - John D. Hocker) 11-12. The court is satisfied that the
contractor assumed responsibility for the specifications as
attached to the contract.
6
NO. 3089 CIVIL 1992
business as Windsor Ridge Homes, would be the contract signatory.25
The process of drafting the agreement was eventually completed by
the expediency of physically attaching Plaintiffs' specification
list to the basic document, along with a list of allowances.26
The contract between Plaintiffs and Defendant Spencer provided
for a ~construction price of $160,000.00, payable in four'draws of
$40,000.00.27 Although the agreement contained no completion date,
Defendant Hocker had predicted that Plaintiffs would be in the home
by February, 1991, and his availability to commence work promptly
had been a major factor in Plaintiffs' decision to reject other
bids.~8 The final $40,000.00 draw was to be due upon substantial
completion of construction or at the time of occupancy of the
building by Plaintiffs, whichever occurred first.~9
During construction, Plaintiffs lived in a rented home in
Hershey, Dauphin County, Pennsylvania, and kept some of their
personal property in storage.3° They paid, inter alia, rent of
25 N.T. (5/23/94 - Carl D. Habig) 14-15.
N.T. (5/23/94 - Carl D. Habig) 13-17.
N.T. (5/23/94 - Carl D. Habig) 23-30.
N.T. (5/23/94 - Carl D. Habig) 21-22.
N.T. (5/23/94 - Carl D. Habig) 28; Plaintiffs' Exhibit 4.
N.T. (8/5/94 - Anne H. Habig) 61-63.
7
NO. 3089 CIVIL 1992
$1,000.00 per month and storage fees of $48.00 per month.3~
Groundbreaking occurred during the first week of October,
1990.32 Unfortunately, a measurement error in the staking out of
the house, discovered after the footers had been poured, resulted
in a dimensional variance between the size of the house as it was
being constructed and the size of the house as it had been
designed.TM The error, in the form of an extension of a line by
five feet, displayed itself in a lengthened kitchen area downstairs
and a lengthened bathroom area upstairs.34 Plaintiffs were told
that any increase in cost occasioned by the mistake would not be
their responsibility.~5
Although initially the relationship between the parties was
good,~6 as time passed it deteriorated for a number of reasons.
First, Defendant Hocker had a heart condition, undisclosed to the
Plaintiffs, which had led his doctor to advise him against working
3~ N.T. (8/5/94 - Anne H. Habig) 61, 63. From April, 1991,
through December, 1991, they also paid $412.68 for electricity,
$396.34 for heating oil, $720.00 for renters' insurance, and
$1,000.86 for automobile fuel used in visiting the construction
site. N.T. (8/5/94 - Anne H. Habig) 64-66, 69.
N.T. (5/23/94 - Carl D. Habig) 22.
N.T. (5/23/94 - Carl D. Habig) 31.
N.T. (5/23/94 - Carl D. Habig) 31.
N.T. (10/21/94 - John H. Hocker) 84-85.
N.T. (5/23/94 - Carl D. Habig) 32.
8
NO. 3089 CIVIL 1992
more than 20 hours a week.37 His crew took advantage of his
absences,38 spat tobacco juice throughout the structure,39 and
performed poor quality work;4° Mr. Hocker became moody and
occasionally rude.4~
Second, significant portions of the work, such as application
of shingles to the roof42 and construction of stairs,~ were
incorrectly done. One of Plaintiffs' experts described the roof as
"pretty much the worst roof I've ever seen in my life. The work
was terrible. It did not follow specs of the roof. It was causing
leaks .... ..44 Another of Plaintiffs' experts referred to unparallel
walls that "looked horrible.',4s A painter described the outside of
the house as "dingy."46 Stair handrails were characterized as
37 N.T. (10/21/94 - John H. Hocker) 78-79; N.T. (10/21/94 -
Mary Jane Spencer) 130.
N.T. (5/24/94 - Fred M. Myers) 97.
N.T. (5/24/94 - Fred M. Myers) 94-95°
N.T. (5/24/94 - Fred M. Myers) 93-96; N.T. (5/24/94 - Brian
L. Getty) 62.
N.T. (5/24/94 - Fred M. Myers) 97.
N.T. (5/24/94 - Harvey B. Landis) 6-8; 13.
N.T. (5/24/94 - Douglas L. Collins) 150-51; N.T. (8/4/94 -
Ronald Grosso) 22, 27-28.
N.T. (10/21/94 - Douglas Collins) 9.
N.T. (8/4/94 - Ronald Grosso) 33.
N.T. (5/24/94 - Fred M. Myers) 100.
9
NO. 3089 CIVIL 1992
looking "horrible.,,47
Third, the extended kitchen ceiling began to sag noticeably,
because the beam chosen by the builder to support it was
inadequate.48 In this regard, one of Plaintiffs' experts observed,
"There is no wood beam made in America that will span that distance
and carry that load without sagging. Actually [it was] a dangerous
situation."49 An attempt on the part of Defendant Hocker to correct
the problem by a truss arrangement involving an all-thread metal
rod in the attic, tying together the roof ridge and the beam,5° was
not sound in an engineering sense$~ and caused the walls of the
house to bulge, giving it a "pregnant" appearance.~2 The degree of
47 N.T. (5/24/94 - Douglas Collins) 151.
48 N.T. (5/23/94 - Carl D. Habig) 97-98; N.T. (8/4/94 - Ronald
Grosso 24; N.T. (8/5/94 - L. Edwin Berkheimer) 97.
N.T. (5/24/94 - Douglas L. Collins) 143.
s0 N.T. (10/21/94 - John H. Hocker) 33.
N.T. (5/24/95 - Douglas L. Collins) 145.
N.T. (8/4/94 - Ronald Grosso) 25.
10
NO. 3089 CIVIL 1992
tension created in the rod also made the attempted repair unsafe.53
Fourth, the builder began to run short of money and needed to
obtain advances on the draws.54 Equally disturbing to the
Plaintiffs was the fact that five of the builder's subcontractors
had not been paid approximately $20,000.00 which they were owed.55
Fifth, as of August 1991, the construction, which could have
56
been completed in about four months, was far from being finished.5?
Finally, Defendant Hocker was becoming less than cordial in his
relationship with the Plaintiffs, with the result that Plaintiffs
at one point paid a bill for $741.00 for work that should have been
53 N.T. (8/4/94 - Ronald Grosso) 26. One of Plaintiffs'
experts made this observation:
I was concerned - when I was up in the
attic, to test the load of the all-thread rod
- I work with houses, with studs, and one of
the ways you can tell the weight load is to
literally strike the rod, and depending on the
~ ~ frequency, the sound it makes, gives you an
idea of how much weight is on it. When I
struck that rod, it was like a tight piano
wire. That thing was under tremendous stress.
I was concerned that something might let loose
Id.
N.T. (5/23/94 - Carl D. Habig) 26-28.
5s N.T. (5/23/94 - Carl D. Habig) 88.
N.T. (8/5/94 - L. Edwin Berkheimer) 105-06.
N.T. (5/24/94 - Douglas L. Collins) 138; N.T. (8/4/94 -
Ronald Grosso) 22-23.
11
NO. 3089 CIVIL 1992
covered by the contract simply to avoid a confrontation with him.58
In August of 1991, a dispute between the parties arose over
two change order bills submitted by the builder,s9 In the middle
of August, the builder left the job.6° Various attempts to resolve
the parties' differences ensued.~ These included a clearly
unreasonable assertion on the part of Defendants ~lat Plaintiffs
owed $6,696.02 for the difference in square footage between the set
of plans first reviewed by Defendant Hocker and the set which
resulted in the contract.~2
At a meeting on September 7, 1991, Plaintiff Anne H. Habig
told Defendants -- justifiably, in the court's view - that she did
not think that she and her husband wanted Defendants to finish the
house. Defendant Spencer responded that she was not sure she and
Mr. Hocker wanted to finish the house.63
When the parties parted company, Defendant Spencer was, for
the reasons indicated above, in substantial breach of the contract.
As of that time, Plaintiffs had paid Defendant Spencer all but
N.T. (5/23/94 - Carl D. Habig) 38, 40, 48.
N.T. (5/23/94 - Carl D. Habig) 51.
N.T. (10/21/94 - John H. Hocker) 71-72.
N.T. (5/23/94 - Carl D. Habig) 67-72.
N.T. (5/23/94 - Carl D. Habig) 74-75; N.T. (10/21/94 - John
D. Hocker) 103; Plaintiffs' Exhibit 41.
~3 N.T. (10/21/94 - Mary Jane Spencer) 129-30.
12
NO. 3089 CIVIL 1992
· 64
$20,000.00 of the $160,000 00 contract price, as well as over
$20,000.00 in change order charges;65 the house was only 70 percent
complete;~6 serious construction defects needed to be rectified;~?
certain credits were due Plaintiffs;~" certain credits were due
Defendant Spencer (doing business as Windsor Ridge Homes);~9 and
various subcontractors had not been paid.TM Windsor Ridge Homes
went out of business a few weeks later.TM
Plaintiffs commenced the process of having various
deficiencies in the construction rectified to the extent possible
and having the unfinished work completed.TM The sagging kitchen
ceiling, for instance, was addressed through the installation of a
post under the first floor and a post in the center of the kitchen
under the second floor.TM The aesthetic impression created by the
N.T. (5/23/94 - Carl D. Habig) 24, 30.
N.T. (5/23/94 - Carl D. Habig) 48-49.
N.T. (5/24/94 - Douglas L. Collins) 138 ........
See, e.g., text accompanying notes 39-49.
See, e.g., Plaintiffs' Exhibit 40.
See, e.g., N.T. (5/23/94 - Carl D. Habig) 77.
N.T. (10/21/94 - Mary Jane Spencer) 159-60.
7~ The company had stopped operating by September 30, 1991.
N.T. (10/21/94 - Mary Jane Spencer) 150, 158. Its bank account was
closed by the end of December, 1991. Id. 159.
72 N.T. (5/23/94 - Carl D. Habig) 88-134.
73 N.T. (5/23/94 - Carl D. Habig) 98-99.
13
NO. 3089 CIVIL 1992
kitchen post was, however, best characterized as "very
unfortunate. "74
Numerous materials had to be purchased.?S In addition,
Plaintiffs found it necessary to hire or engage a tile installer,TM
a roofer,?? a plumber,TM a painter,TM a mason,8° a grading company,8~
$2
a septic system company, an insulation company,83 a heating service
company, 84 and a carpentry company, 8s inter alia. In this
undertaking, the Plaintiffs exhausted their funds.86 They moved
into the house a few days before Christmas in 1991.87
74 N.T. (8/4/94 - Ronald Grosso) 27.
75 E.g., plumbing fixtures and carpeting. N.T. (5/23/94 -
Carl D. Habig) 116.
N.T. (5/23/94 - Roger Ford) 1-21.
N.T. (5/24/94 - Harvey B. Landis ) 3-55.
N.T. (5/24/94 - Brian L. Getty) 55-89.
N.T. (5/24/94 - Fred M. Myers) 89-127.
80 N.T. (8/4/94 - Carl D. Habig) 100.
N.T. (8/4/94 - Carl D. Habig) 88.
N.T. (8/4/94 - Carl D. Habig) 92.
N.T. (8/4/94 - Carl D. Habig) 95.
N.T. (8/4/94 - Carl D. Habig) 97.
N.T. (8/4/94 - Carl D. Habig) 81.
N.T. (8/4/94 - Carl D. Habig) 84.
N.T. (5/23/94 - Carl D. Habig) 134.
14
NO. 3089 CIVIL 1992
Most of the aforesaid unpaid subcontractors have yet to be
paid.88 A mechanic's lien, the validity of which is not entirely
clear, has been filed against Plaintiffs' property.89 The house is
not yet fully repaired and complete.9°
On the basis of the evidence presented, the court finds that
reasonable costs for the repair ~and completion of the house by
Plaintiffs, attributable to Defendant Spencer's obligations under
the contract, have been substantiated in the amount of $49,161.72;
that credits due Plaintiffs under the contract have been
substantiated in the amount of $3,499.46; that credits due
Defendant Spencer under the contract have been substantiated in the
amount of $4,934.90; and that a reasonable completion date for
construction was not later than September 1, 1991, with the
consequence of delay beyond that date being Plaintiffs' incurrence
of additional rental expenses of about $3,000.00.9~ The court does
not find that the conduct of either Defendant rose to the level of
"" N.T. (10/21/94 - Mary Jane Spencer) 160. Plaintiffs did
pay one of the subcontractors $1,300.00 out of their own pockets.
N.T. (8/5/94 - Carl D. Habig) 39.
N.T. (10/21/94 - Mary Jane Spencer) 160-61.
N.T. (8/4/94 -Carl D. Habig) 84.
The derivation of all of these figures is shown in the
appendix to this Opinion.
Although the Plaintiffs incurred other expenses as a
result of the delay, the court does not believe that they fall
within the purview of the consequential damages rule discussed
hereafter in the text.
15
NO. 3089 CIVIL 1992
a violation of Pennsylvania's Unfair Trade Practices and Consumer
Protection Law.92
STATEMENT OF LAW
"'Generally speaking, the measure of damages applicable in a
case of breach of contract is that the aggrieved party should be
placed as nearly as possible in the same position he~ would have
occupied had there been no breach.'" Young v. Dart, 428 Pa. Super.
43, 53, 630 A.2d 22, 27 (1993), quoting Harman v. Chambers, 358 Pa.
516, 521, 57 A.2d 842, 845 (1948).
"[I]t is the general rule that where no time is agreed upon
for the completion of a contract, it must be completed within a
reasonable time under all circumstances." Francis Gerard Janson,
P.C. v. Frost, 422 Pa. Super. 36, 41, 618 A.2d 1003, 1006 (1993)
(citations omitted). Although consequential damages from a delay
in the performance of a contractual duty are recoverable, they must
be "such as would normally and ordinarily result from the breach"
or have been "reasonably foreseeable and within the contemplation
of the parties at the time they made the contract." Commonwealth
of Pennsylvania, Dep't of Transp. v. Cumberland Constr. Co., 90 Pa.
Commw. 273, 282, 494 A.2d 520, 525 (1985).
92 See Act of December 17, 1968, P.L. 1224, as reenacted, 73
P.S. S~201-1 et seq.
16
NO. 3089 CIVIL 1992
APPLICATION OF LAW TO FACTS
In the present case, where Defendant Spencer (Windsor Ridge
Homes) substantially breached the parties' construction contract,
Plaintiffs were entitled to be placed as nearly as possible in the
same position they would have occupied had there been no breach.
Had there been no breach, they would have paid the sum of
$160,000.00, plus reasonable charges for extras, less credits due
them for work under the contract which was excused by mutual
agreement; they would not have incurred expenses legally
consequential to the delay; and their property would not be subject
to any lien related to the construction by the builder or
subcontractors of the builder.
Based upon the foregoing findings of fact, the figure which
will place Plaintiffs in the proper position, when coupled with a
requirement that Defendant Spencer save Plaintiffs harmless from
liens of the builder or its subcontractors, is $30,726.28.93 For
these reasons, the following Order will be entered:
ORDER OF COURT
AND NOW, this 13th day of September, 1995, upon consideration
of the Amended Complaint of Plaintiffs, and of the Counterclaim of
Defendant Mary Jane Spencer, trading and doing business as Windsor
Ridge Homes, following a nonjury trial and for the reasons stated
93 See the appendix to this Opinion for a recitation of the
components of the computation yielding this amount.
17
NO. 3089 CIVIL 1992
in the accompanying Opinion, the court makes the following
adjudication:
1. On Plaintiffs' Amended Complaint as it relates to unfair
trade practices, the court finds in favor of Defendants.
2. On the balance of Plaintiffs' Amended Complaint, and on
the Counterclaim of Mary Jane Spencer, the court finds in favor of
Carl D. Habig and Anne H. Habig and against Mary Jane Spencer for
the overall amount of $30,726.28, plus interest at the legal rate
from September 1, 1991, with the further order and direction that
Mary Jane Spencer save the Habigs harmless from any claim by her
company or its unpaid subcontractors which serves to encumber
Plaintiffs' property.
BY THE COURT,
s/ J. Wesley Oler, Jr.
J. Wesley Oler, Jr., J.
James D. Bogar, Esq.
Andrew C. Sheely, Esq.
5 West Main Street
Shiremanstown, PA 17011
Attorneys for Plaintiffs
Sally J. Winder, Esq.
701 East King Street
Shippensburg, PA 17257
Attorney for Defendant
:re
18
NO. 3089 CIVIL 1992
APPENDIX
I. ACTUAL EXPENDITURES BY PLAINTIFFS IN REPAIRING OR
COMPLETING HOUSE
Amount Provider Purpose
$1,571.00 Penelec .~ Underground electric
850.00 Monroe Mech. Co. Heating/air conditioning
283.97 Appleby Bros. Air filters
680.00 Ronald Grosso Kitchen app. instal.
253.34 David Zimmerman Cabinet work
7.95 Zimmerman Cabinet Shop Cabinet work
70..65 Builders Supply Kitchen post
89.00 Pella Window Window rep.
4,150.00~ Whitco Tile pur. and instal.
1,513.00 Whitco Waterproofing, misc.
12.60 Conestoga Tile Sealer
2,029.50 Gettys Mechanical Cont. Plumbing
138.00 Gettys Mechanical Cont. Sink instal.
3,170.72 R.F. Fager Co. Plumbing fixtures
3,796.22 Harvey Landis Roof repair
3,000.002 Whitco Carpeting
2,725.003 Fred M. Myers Painting
15.45 York Corrugating P.C. strainer
271.10 York Corrugating Sink
133.71 York Corrugating Sink
16.96 York Corrugating Dryer vents
707.94 Baldwin Brass Cent. Locks
100.97 Hechingers Locks
18.22 K-Mart Doorstops
241.68 R.F. Fager Co. Plumbing fixtures
159.99 Middletown Lumber Lumber
70.46 Middletown Lumber Molding
7.90 McCune's Lumber Rosin paper
~ Reduced from actual expenditure to court's estimate of
reasonable figure.
2 Reduced from actual expenditure to allowance figure
provided by contract.
3 Includes $1,300.00 paid by Plaintiffs to Myers for painting
on house while working for Defendant Spencer (Windsor Ridge Homes)
and for which Myers was not compensated.
1
NO. 3089 CIVIL 1992
717.45 Carl Rosenberry's Lumber
54.34 Carl Rosenberry's Lumber
164.65 McCune's Lumber Lumber
300.00 Webber Drywall Drywall
51.01 Webers Hardware Supplies
21.76 Carter Lumber Lumber
246.84 Hechingers Locks, scooter
65.78 St. Thos. Hardware Hinges
222.02 Hechingers Supplies
68.62 Lumber Yard Lumber
1,352.40 F & G Floors Refinishing
1,000.004 Lumber Yard Cherry stairs
733.00 Saul Cohick Masonry
680.00 Maryland Bluestone Sandstone
2,087.00 John Walters Excav. Rough grading
54.53 Martins Well Drill. Tank relocation
1,476.00 Whisler's Well Drill. Septic repair
81.56 Bruce B. Gamble Septic supplies
11.02 Bruce B. Gamble Septic supplies
18.82 Carter Plumbing PVC pipe
79.14 Carter Plumbing PVC pipe
166.71 New Enterprises Septic stone
886.00 Amer. Alum. & Insul. Insulation
534.51 Penn Fuel Gas, Inc. Gas service
42.34 Penn Fuel Gas, Inc. Gas service
2,078.90 Monroe Contractors Furnace work
8.62 Eberts Paints Paint
22.37 Eberts Paints Paint, stain
$39,310.725
4 Reduced from actual expenditure to court's estimate of cost
of oak as provided for in contract.
5 To the extent that a given expenditure submitted by
Plaintiffs does not appear in this list, the court did not find it
sufficiently substantiated, whether in amount, relevancy to the
contract, or reasonableness, to justify inclusion in an award of
damages.
2
NO. 3089 CIVIL 1992
II. ESTIMATED cOSTS TO PLAINTIFFS FOR REPAIR AND cOMPLETION
OF HouSE NOT YET UNDERTAKEN
Amount Pur_~
$ 704.00 Repair screen porch
3,667.00 Repair master bedroom
3,722.00 Repair staircase
363.00 Level floor, carpeting
304.00 Bridging
606.00 House fan
485.0Q Vacuum system
$--9,851.006
III. CREDITS DUE pLAINTIFFS FROM DEFENDANT SPENCER
(WINDSOR RIDGE HOMES)
Amount Item
$3,091.00 Omitted stonework
408.4~ Wood type substitution
~3,499.4~v
6 To the extent that a given prospective expenditure
submitted by Plaintiffs does not appear in this list, the court did
not find it sufficiently substantiated, whether in amount,
relevancy to the contract, or reasonableness, to justify inclusion
in an award of damages.
7 To the extent that a given credit submitted by Plaintiffs
does not appear in this list, the court did not find it
sufficiently substantiated, whether in amount, relevancy to the
contract, or reasonableness, to justify inclusion in an award of
damages.
3
NO. 3089 CIVIL 1992
IV. CREDITS DUE DEFENDANT SPENCER (WINDSOR RIDGE HOMES)
FROM PLAINTIFFS
Amount Item
$4,304.50 Change orders represented by Plaintiffs,
Exhibits 31-32
572.40 Shower door refund
._ 58.00 Central
$4,934.908 vacuum
V, DELAy DAMAGES DUE PLAINTIFFS FROM DEFENDANT SPENCER
(WINDSOR RIDGE HOMES)
~Amoun~ ~tem
$3'000-009 Rent
Vi. PLAINTIFFS, UNPAID BA/2~NCE OF THE CONTRACT PRICE
Amount
$20,000.00~°
8 To the extent that a given credit submitted by Defendant
Spencer (Windsor Ridge Homes) does not appear in this list, the
court did not find it sufficiently substantiated, whether in
amount, relevancy to the contract, or reasonableness, to justify
inclusion in an award of damages.
9 As noted in the text, it is believed that, of the alleged
damages from unreasonable delay submitted by Plaintiffs, their
rental payments alone meet the legal test for recoverable
consequential damages.
z0 When the parties separated Plaintiffs had paid Defendant
Spencer $140,000.00 of the $160,000.00 contract price.
4
NO. 3089 CIVIL 1992
IV. CREDITS DUE DEFENDANT SPENCER (WINDSOR RIDGE HOMES)
FROM PLAINTIFFS
Amount Item
$4,304.50 Change orders represented by Plaintiffs
Exhibits 31-32 '
572.40 Shower door refund
58.00 Central vacuum
$4,934.908
V-~ DELAY DASL~GES DUE PLAINTIFFS FROM DEFENDANT SPENCER
(WINDSOR RIDGE HOMES)
Amount Item
$3'000'009 Rent
Vi. PLAINTIFFS, UNPAID BALANCE OF THE CONTRACT PRICE
Amount
$20,000.00~0
8 To the extent that a given credit submitted by Defendant
Spencer (Windsor Ridge Homes) does not appear in this list, the
court did not find it sufficiently substantiated, whether in
amount, relevancy to the contract, or reasonableness to justify
inclusion in an award of damages. ,
9 As noted in the text, it is believed that, of the alleged
damages from unreasonable delay submitted by Plaintiffs, their
rental payments alone meet the legal test for recoverable
consequential damages.
~0 When the parties separated Plaintiffs had paid Defendant
Spencer $140,000.00 of the $160,000.00 contract price.
4
James D. Bogar, Esq.
Andrew C. Sheely, Esq.
5 West Main Street
Shiremanstown, PA 17011
Attorneys for Plaintiffs
Sally J. Winder, Esq.
701 East King Street
Shippensburg, PA 17257
Attorney for Defendant
:rc
CARL D. HABIG and : IN THE COURT OF COMMON PLEAS OF
ANNE H. HABIG, : CUMBERLAND COUNTY, PENNSYLVANIA
Plaintiffs :
:
v. : CIVIL ACTION - LAW
:
MARY JANE SPENCER, t/a :
and d/b/a WINDSOR RIDGE :
HOMES, and JOHN H. :
HOCKER, .
Defendants : NO. 3089 CIVIL 1992
IN RE: ADJUDICATION
BEFORE OLER, J.
OPINION and ORDER OF COURT
Oler, J.
This building construction case arises out of the construction
by Defendant Mary Jane Spencer, trading and doing business as
Windsor Ridge Homes, of a house for Plaintiffs Carl D. Habig and
Anne H. Habig. Defendant John H. Hocker served as agent and
foreman for Defendant Spencer.
Plaintiffs maintain, inter alia, that the construction work
was defective and incomplete. Defendant Spencer maintains, inter
alia, that money owed to her company for the construction was not
paid.
A bench trial was held by the writer of this Opinion. For the
reasons stated herein, the court will find in favor of Plaintiffs
and against Defendant Spencer in the amount of $30,726.28.
STATEMENT OF FACTS
Procedural history. Plaintiffs commenced this action on
September 1, 1992, by the filing of a complaint. As the result of
NO. 3089 CIVIL 1992
preliminary objections to the complaint, and a ruling which
sustained the objections in part,~ Plaintiffs filed an amended
complaint on February 8, 1993.
Plaintiffs' amended complaint consisted of four counts. Three
counts were against Defendant Spencer alone, and were entitled
"breach of contract," "construction delays" and '~breach of
warranty." One count was against both Defendant Spencer and
Defendant Hocker, and was entitled "unlawful acts and trade
practices." The complaint sought damages in liquidated amounts of
$90,717.96 and $11,985.44 on the breach of contract and
construction delay counts, and unliquidated damages in excess of
$10,000.00 on the breach of warranty count and on the unlawful
trade practices count.
Defendants filed an answer and counterclaim on March 5, 1993.
The counterclaim, which was brought on behalf of Defendant Spencer
only, alleged that Plaintiffs had unilaterally terminated the
contract, failed to pay for extras, and failed to pay the full
contract price. It sought damages from Plaintiffs in the amount of
$37,518.32. Plaintiffs filed a reply to the counterclaim on March
29, 1993.
Trial was held on May 23, May 24, August 4, August 5, and
October 21, 1994. Pursuant to requests of counsel, the court
authorized the submission of proposed findings of fact, conclusions
~ See Opinion and Order of Court, January 28, 1993.
2
NO. 3089 CIVIL 1992
of law and briefs within three weeks of the filing of any requested
portions of the trial transcript. The last such transcript portion
was filed on April 24, 1995, and counsels' submissions have been
received.
Findinqs of fact. Plaintiffs are Carl D. Habig and Anne H.
Habig, a-~married couple now residing at 21951 Amberson Road,
Amberson, Franklin County, Pennsylvania.2 Defendants are Mary Jane
Spencer and John H. Hocker, who live at 203 Log Cabin Road,
Newville, Cumberland County, Pennsylvania.3
Defendant Hocker became involved in the building construction
business in the 1950's.4 From 1950 through 1988, as a self-
employed builder, he constructed between 150 and 200 homes,s
Defendant Spencer's background is that of a homemaker.6 Defendants
have lived together since 1987.7
In 1988, a company was formed with the fictitious or trade
name of Windsor Ridge Homes, as a vehicle for Defendant Spencer's
2 N.T. (5/23/94 - Carl Do Habig) 2; N.T. (8/5/94 - Anne H.
Habig) 61.
3 N.T. (10/21/94 - Mary Jane Spencer) 109; N.T. (8/5/94 -
John H. Hocker) 4; N.T. (10/21/94 - John H. Hocker) 74-75.
N.T. (10/21/94 - John H. Hocker) 73.
N.T. (10/21/94 - John H. Hocker) 76.
N.T. (10/21/94 - Mary Jane Spencer) 148; N.T. (10/21/94 -
John H. Hocker) 73.
7 N.T. (10/21/94 - Mary Jane Spencer) 153.
3
NO. 3089 CIVIL 1992
entry into the construction business.8 Defendant Hocker, who had
an income from social security, acted as an unpaid supervisor for
Windsor Ridge Homes.9 As a practical matter, he also ran the
company.~° Until the fall of 1990, Windsor Ridge Homes had engaged
in only a few small jobs.~
In April of 1990, Plaintiffs made a successful offer to
purchase a 120-acre tract containing a farmhouse, built in 1756, at
21951 Amberson Road, Amberson, Franklin County, Pennsylvania.~2
Their plans with respect to the property were described by Mr.
Habig as follows:
[The farmhouse was] probably one of the
oldest farms in the county, if not the oldest
farm in the county. We planned to renovate
that. And it had a - on the back of that,
later, in the 1800s, there was a frame
structure, two-story frame structure, that was
built that was not salvageable. We planned to
rip that down and build a new addition on the
back of that farmhouse. It's a beautiful spot
to have. It's got fields and streams and
trout and turkeys.~3
Prior to settlement on the property, Plaintiffs engaged a
8 N.T. (10/21/94 - John H. Hocker) 73.
9 N.T. (10/21/94 - John H. Mocker) 74.
~o See, e.g., N.T. (5/23/94 - Carl D. Habig) 17-21; N.T.
(8/5/94 - John H. Hocker) 26.
N.T. (10/21/94 - John D. Hocker) 76.
N.T. (5/23/94 - Carl D. Habig) 2-3.
N.T. (5/23/94 - Carl D. Habig) 3.
4
NO. 3089 CIVIL 1992
Lancaster architect to draft plans for the addition, which was in
essence a second house on the premises.TM Settlement on the
property took place on June 5, 1990.~5
Plaintiffs contacted several builders in the area, including
Defendant Hocker, and solicited bids for the house on the basis of
plans detailing a 2,533 square foot structure.~ Defendant Hocker
quoted a price of $150,000.00.~7
Plaintiffs decided to increase the size of the house by about
100 square feet, and to that end secured revised plans from the
architect for a 2,637 square foot house in August of 1990.~8 They
presented these plans, with a list of specifications which they had
prepared, to Defendant Hocker on August 27, 1990.~9 After making
a number of phone calls to obtain quotes from persons such as
potential subcontractors, Defendant Hocker quoted a price on the
basis of the revised plans of $160,000.00.20
N.T. (5/23/94 - Carl D. Habig) 4.
N.T. (5/23/94 - Carl D. Habig) 3.
N.T. (5/23/94 - Carl D. Habig) 5-9. Renovation of the old
farmhouse on the property, which was eventually contracted for on
a time-and-materials basis, is not directly involved in the present
litigation. Id. 6-7.
N.T. (5/23/94 - Carl D. Habig) 8.
N.T. (5/23/94 - Carl D. Habig) 10.
N.T. (5/23/94 - Carl D. Habig) 11.
N.T. (5/23/94 - Carl D. Habig) 12.
5
NO. 3089 CIVIL 1992
A day or so later, Plaintiffs called Defendant Hocker and told
him that they had decided to engage him.2~ Plaintiffs made
arrangements to meet with Defendant Hocker on September 5, 1990, at
which time Mr. Hocker was to supply a basic contract, which had
been previously shown to Plaintiffs, with the specifications
provided by Plaintiffs integrated into it.22
On September 5, 1990, Plaintiffs met with Defendant Hocker at
Defendants' residence.23 The contract document which Plaintiffs had
anticipated would be ready had not been drawn up, and a
considerable amount of time was expended as Defendant Hocker
undertook to merge Plaintiffs' specifications into the aforesaid
basic contract for the purpose of creating a unified written
agreement.24 Eventually, Defendant Spencer joined the conference.
When Ms. Spencer joined the conference, Plaintiffs learned for
the first time that, because of a divorce in which Defendant Hocker
was involved, Defendants had decided that Ms. Spencer, doing
N.T. (5/23/94 - Carl D. Habig) 20-21.
N.T. (5/23/94 - Carl D. Habig) 12-13.
N.T. (5/23/94 - Carl D. Habig) 14.
N.T. (5/23/94 - Carl D. Habig) 13-14. A disagreement
exists between Plaintiffs and Defendant Hocker as to whether the
list of specifications on September 5, 1990, was the same list as
that provided by the Plaintiffs on August 27, 1990, or a more
elaborate one. Compare N.T. (5/23/94 - Carl D. Habig) 14 with N.T.
(8/5/94 - John D. Hocker) 11-12. The court is satisfied that the
contractor assumed responsibility for the specifications as
attached to the contract.
6
NO. 3089 CIVIL 1992
business as Windsor Ridge Homes, would be the contract signatory.25
The process of drafting the agreement was eventually completed by
the expediency of physically attaching Plaintiffs' specification
list to the basic document, along with a list of allowances.26
The contract between Plaintiffs and Defendant Spencer provided
for a ~construction price of $160,000.00, payable in four'draws of
$40,000.00.27 Although the agreement contained no completion date,
Defendant Hocker had predicted that Plaintiffs would be in the home
by February, 1991, and his availability to commence work promptly
had been a major factor in Plaintiffs' decision to reject other
bids.28 The final $40,000.00 draw was to be due upon substantial
completion of construction or at the time of occupancy of the
building by Plaintiffs, whichever occurred first.29
During construction, Plaintiffs lived in a rented home in
Hershey, Dauphin County, Pennsylvania, and kept some of their
personal property in storage.3° They paid, inter alia, rent of
25 N.T. (5/23/94 - Carl D. Habig) 14-15.
N.T. (5/23/94 - Carl D. Habig) 13-17.
N.T. (5/23/94 - Carl D. Habig) 23-30.
N.T. (5/23/94 - Carl D. Habig) 21-22.
N.T. (5/23/94 - Carl D. Habig) 28; Plaintiffs' Exhibit 4.
N.T. (8/5/94 - Anne H. Habig) 61-63.
7
NO. 3089 CIVIL 1992
$1,000.00 per month and storage fees of $48.00 per month.3~
Groundbreaking occurred during the first week of October,
1990.32 Unfortunately, a measurement error in the staking out of
the house, discovered after the footers had been poured, resulted
in a dimensional variance between the size of the house as it was
being constructed and the size of the house as it had been
designed.TM The error, in the form of an extension of a line by
five feet, displayed itself in a lengthened kitchen area downstairs
and a lengthened bathroom area upstairs.34 Plaintiffs were told
that any increase in cost occasioned by the mistake would not be
their responsibility. 35
Although initially the relationship between the parties was
36
good, as time passed it deteriorated for a number of reasons.
First, Defendant Hocker had a heart condition, undisclosed to the
Plaintiffs, which had led his doctor to advise him against working
3~ N.T. (8/5/94 - Anne H. Habig) 61, 63. From April, 1991,
through December, 1991, they also paid $412.68 for electricity,
$396.34 for heating oil, $720.00 for renters' insurance, and
$1,000.86 for automobile fuel used in visiting the construction
site. N.T. (8/5/94 - Anne H. Habig) 64-66, 69.
N.T. (5/23/94 - Carl D. Habig) 22.
N.T. (5/23/94 - Carl D. Habig) 31.
N.T. (5/23/94 - Carl D. Habig) 31.
N.T. (10/21/94 - John H. Hocker) 84-85.
N.T. (5/23/94 - Carl D. Habig) 32.
8
NO. 3089 CIVIL 1992
more than 20 hours a week.37 His crew took advantage of his
absences,38 spat tobacco juice throughout the structure,~9 and
performed poor quality work;4° Mr. Hocker became moody and
occasionally rude.4~
Second, significant portions of the work, such as application
of shingles to the roof42 and construct-ion of stairs,~ were
incorrectly done. One of Plaintiffs' experts described the roof as
"pretty much the worst roof I've ever seen in my life. The work
was terrible. It did not follow specs of the roof. It was causing
leaks .... ..44 Another of Plaintiffs' experts referred to unparallel
walls that "looked horrible.-45 A painter described the outside of
the house as "dingy.-46 Stair handrails were characterized as
37 N.T. (10/21/94 - John H. Hocker) 78-79; N.T. (10/21/94 -
Mary Jane Spencer) 130.
N.T. (5/24/94 - Fred M. Myers) 97.
N.T. (5/24/94 - Fred M. Myers) 94-95°
N.T. (5/24/94 - Fred M. Myers) 93-96; N.T. (5/24/94 - Brian
L. Getty) 62.
N.T. (5/24/94 - Fred M. Myers) 97.
N.T. (5/24/94 - Harvey B. Landis) 6-8; 13.
N.T. (5/24/94 - Douglas L. Collins) 150-51; N.T. (8/4/94 -
Ronald Grosso) 22, 27-28.
N.T. (10/21/94 - Douglas Collins) 9.
N.T. (8/4/94 - Ronald Grosso) 33.
N.T. (5/24/94 - Fred M. Myers) 100.
9
NO. 3089 CIVIL 1992
looking "horrible.-47
Third, the extended kitchen ceiling began to sag noticeably,
because the beam chosen by the builder to support it was
inadequate.48 In this regard, one of Plaintiffs' experts observed,
"There is no wood beam made in America that will span that distance
and carry that load without sagging. Actually [it was] a dangerous
situation."~9 An attempt on the part of Defendant Hocker to correct
the problem by a truss arrangement involving an all-thread metal
rod in the attic, tying together the roof ridge and the beam,so was
not sound in an engineering senses~ and caused the walls of the
house to bulge, giving it a "pregnant" appearance,s2 The degree of
N.T. (5/24/94 - Douglas Collins) 151.
N.T. (5/23/94 - Carl D. Habig) 97-98; N.T. (8/4/94 - Ronald
24; N.T. (8/5/94 - L. Edwin Berkheimer) 97.
N.T. (5/24/94 - Douglas L. Collins) 143.
N.T. (10/21/94 - John H. Hocker) 33.
N.T. (5/24/95 - Douglas L. Collins) 145.
N.T. (8/4/94 - Ronald Grosso) 25.
10
NO. 3089 CIVIL 1992
tension created in the rod also made the attempted repair unsafe,s3
Fourth, the builder began to run short of money and needed to
obtain advances on the draws,s4 Equally disturbing to the
Plaintiffs was the fact that five of the builder's subcontractors
had not been paid approximately $20,000.00 which they were owed.s~
Fifth, as of August 1991, the construction, which could have
been completed in about four months,s6 was far from being finished.~7
Finally, Defendant Hocker was becoming less than cordial in his
relationship with the Plaintiffs, with the result that Plaintiffs
at one point paid a bill for $741.00 for work that should have been
~3 N.T. (8/4/94 - Ronald Grosso) 26. One of Plaintiffs'
experts made this observation:
I was concerned - when I was up in the
attic, to test the load of the all-thread rod
- I work with houses, with studs, and one of
the ways you can tell the weight load is to
literally strike the rod, and depending on the
~. frequency, the sound it makes, gives you an
idea of how much weight is on it. When I
struck that rod, it was like a tight piano
wire. That thing was under tremendous stress.
I was concerned that something might let loose
Id.
N.T. (5/23/94 - Carl D. Habig) 26-28.
N.T. (5/23/94 - Carl D. Habig) 88.
N.T. (8/5/94 - L. Edwin Berkheimer) 105-06.
57 N.T. (5/24/94 - Douglas L. Collins) 138; N.T. (8/4/94 -
Ronald Grosso) 22-23.
11
NOo 3089 CIVIL 1992
covered by the contract simply to avoid a confrontation with him.s"
In August of 1991, a dispute between the parties arose over
two change order bills submitted by the builder,s9 In the middle
of August, the builder left the job.6° Various attempts to resolve
the parties' differences ensued.6~ These included a clearly
unreasonable assertion on the part of Defendants that Plaintiffs
owed $6,696.02 for the difference in square footage between the set
of plans first reviewed by Defendant Hocker and the set which
resulted in the contract.62
At a meeting on September 7, 1991, Plaintiff Anne H. Habig
told Defendants -- justifiably, in the court's view - that she did
not think that she and her husband wanted Defendants to finish the
house. Defendant Spencer responded that she was not sure she and
Mr° Hocker wanted to finish the house.63
When the parties parted company, Defendant Spencer was, for
the reasons indicated above, in substantial breach of the contract.
-As of that time, Plaintiffs had paid Defendant Spencer all but
se N.T. (5/23/94 - Carl D. Habig) 38, 40, 48.
N.T. (5/23/94 - Carl D. Habig) 51.
N.T. (10/21/94 - John H. Hocker) 71-72.
N.T. (5/23/94 - Carl D. Habig) 67-72.
N.T. (5/23/94 - Carl D. Habig) 74-75; N.T. (10/21/94 - John
D. Hocker) 103; Plaintiffs' Exhibit 41.
63 N.T. (10/21/94 - Mary Jane Spencer) 129-30.
12
NO. 3089 CIVIL 1992
· 64
$20,000.00 of the $160,000 00 contract price, as well as over
$20,000.00 in change order charges;6s the house was only 70 percent
complete;66 serious construction defects needed to be rectified;67
certain credits were due Plaintiffs;68 certain credits were due
Defendant Spencer (doing business as Windsor Ridge Homes);69 and
various subcontractors had not been paid.TM Windsor Ridge Homes
went out of business a few weeks later.TM
Plaintiffs commenced the process of having various
deficiencies in the construction rectified to the extent possible
and having the unfinished work completed.72 The sagging kitchen
ceiling, for instance, was addressed through the installation of a
post under the first floor and a post in the center of the kitchen
under the second floor.TM The aesthetic impression created by the
N.T. (5/23/94 - Carl D. Habig) 24, 30.
N.T. (5/23/94 - Carl D. Habig) 48-49.
N.T. (5/24/94 - Douglas L. Collins) 138
See, e.g., text accompanying notes 39-49.
See, e.g., Plaintiffs' Exhibit 40.
See, e.g., N.T. (5/23/94 -Carl D. Habig) 77.
N.T. (10/21/94 - Mary Jane Spencer) 159-60.
?~ The company had stopped operating by September 30, 1991.
closedN'T' (10/21/94by the endM%rfy-December,Jane Spencer)1991.150,id.158.159 .Its bank account was
72 N.T. (5/23/94 - Carl D. Habig) 88-134·
~3 N.T. (5/23/94 - Carl D. Habig) 98-99.
13
NO. 3089 CIVIL 1992
kitchen post was, however, best characterized as "very
unfortunate. "74
Numerous materials had to be purchased.75 In addition,
Plaintiffs found it necessary to hire or engage a tile installer,TM
79 80 81
a roofer,77 a plumber,TM a painter, a mason, a grading company,
a septic system company,82 an insulation company,83 a heating service
84 and a carpentry company,
company, 85 inter alia. In this
undertaking, the Plaintiffs exhausted their funds."6 They moved
into the house a few days before Christmas in 1991.87
74 N.T. (8/4/94 - Ronald Grosso) 27.
75 E.g., plumbing fixtures and carpeting. N.T. (5/23/94 -
Carl D. Habig) 116.
N.T. (5/23/94 - Roger Ford) 1-21o
N.T. (5/24/94 - Harvey B. Landis ) 3-55.
N.T. (5/24/94 - Brian L. Getty) 55-89.
N.T. (5/24/94 - Fred M. Myers) 89-127.
80 N.T. (8/4/94 - Carl D. Habig) 100.
N.T. (8/4/94 - Carl D. Habig) 88.
N.T. (8/4/94 - Carl D. Habig) 92.
N.T. (8/4/94 - Carl D. Habig) 95.
N.T. (8/4/94 - Carl D. Habig) 97.
N.T. (8/4/94 - Carl D. Habig) 81.
N.T. (8/4/94 - Carl D. Habig) 84.
N.T. (5/23/94 - Carl D. Habig) 134.
14
NO. 3089 CIVIL 1992
Most of the aforesaid unpaid subcontractors have yet to be
paid.88 A mechanic's lien, the validity of which is not entirely
clear, has been filed against Plaintiffs' property.89 The house is
not yet fully repaired and complete.9°
On the basis of the evidence presented, the court finds that
reasonable costs for the repair 'and completion of the house by
Plaintiffs, attributable to Defendant Spencer's obligations under
the contract, have been substantiated in the amount of $49,161.72;
that credits due Plaintiffs under the contract have been
substantiated in the amount of $3,499.46; that credits due
Defendant Spencer under the contract have been substantiated in the
amount of $4,934.90; and that a reasonable completion date for
construction was not later than September 1, 1991, with the
consequence of delay beyond that date being Plaintiffs' incurrence
of additional rental expenses of about $3,000.00.~ The court does
not find that the conduct of either Defendant rose to the level of
"" N.T. (10/21/94 - Mary Jane Spencer) 160. Plaintiffs did
pay one of the subcontractors $1,300.00 out of their own pockets.
N.T. (8/5/94 - Carl D. Habig) 39.
N.T. (10/21/94 - Mary Jane Spencer) 160-61.
90 N.T. (8/4/94 -Carl D. Habig) 84.
The derivation of all of these figures is shown in the
appendix to this Opinion.
Although the Plaintiffs incurred other expenses as a
result of the delay, the court does not believe that they fall
within the purview of the consequential damages rule discussed
hereafter in the text.
15
NO. 3089 CIVIL 1992
a violation of Pennsylvania's Unfair Trade Practices and Consumer
Protection Law.92
STATEMENT OF LAW
"'Generally speaking, the measure of damages applicable in a
case of breach of contract is that the aggrieved party should be
placed as nearly as possible in the same position he would have
occupied had there been no breach.'" Young v. Dart, 428 Pa. Super.
43, 53, 630 A.2d 22, 27 (1993), quoting Harman v. Chambers, 358 Pa.
516, 521, 57 A.2d 842, 845 (1948).
"[I]t is the general rule that where no time is agreed upon
for the completion of a contract, it must be completed within a
reasonable time under all circumstances." Francis Gerard Janson,
P.C. v. Frost, 422 Pa. Super. 36, 41, 618 A.2d 1003, 1006 (1993)
(citations omitted). Although consequential damages from a delay
in the performance of a contractual duty are recoverable, they must
be "such as would normally and ordinarily result from the breach"
or have been "reasonably foreseeable and within the contemplation
of the parties at the time they made the contract." Commonwealth
of Pennsylvania, Dep't of Transp. v. Cumberland Constr. Co., 90 Pa.
Commw. 273, 282, 494 A.2d 520, 525 (1985).
~ See Act of December 17, 1968, P.L. 1224, as reenacted, 73
P.S. ~201-1 et seq.
16
NO. 3089 CIVIL 1992
APPLICATION OF LAW TO FACTS
In the present case, where Defendant Spencer (Windsor Ridge
Homes) substantially breached the parties' construction contract,
Plaintiffs were entitled to be placed as nearly as possible in the
same position they would have occupied had there been no breach.
Had these been no breach, they would have paid the sum of
$160,000.00, plus reasonable charges for extras, less credits due
them for work under the contract which was excused by mutual
agreement; they would not have incurred expenses legally
consequential to the delay; and their property would not be subject
to any lien related to the construction by the builder or
subcontractors of the builder.
Based upon the foregoing findings of fact, the figure which
will place Plaintiffs in the proper position, when coupled with a
requirement that Defendant Spencer save Plaintiffs harmless from
liens of the builder or its subcontractors, is $30,726.28.93 For
these reasons, the following Order will be entered:
ORDER OF COURT
AND NOW, this 13th day of September, 1995, upon consideration
of the Amended Complaint of Plaintiffs, and of the Counterclaim of
Defendant Mary Jane Spencer, trading and doing business as Windsor
Ridge Homes, following a nonjury trial and for the reasons stated
93 See the appendix to this Opinion for a recitation of the
components of the computation yielding this amount.
17
NO. 3089 CIVIL 1992
in the accompanying Opinion, the court makes the following
adjudication:
1. On Plaintiffs' Amended Complaint as it relates to unfair
trade practices, the court finds in favor of Defendants.
2. On the balance of Plaintiffs' Amended Complaint, and on
the Counterclaim of Mary Jane Spencer, the court finds in favor of
Carl D. Habig and Anne H. Habig and against Mary Jane Spencer for
the overall amount of $30,726.28, plus interest at the legal rate
from September 1, 1991, with the further order and direction that
Mary Jane Spencer save the Habigs harmless from any claim by her
company or its unpaid subcontractors which serves to encumber
Plaintiffs' property.
BY THE COURT,
s/ J. Wesley Oler, Jr.
J. Wesley Oler, Jr., J.
James D. Bogar, Esq.
Andrew C. Sheely, Esq.
5 West Main Street
Shiremanstown, PA 17011
Attorneys for Plaintiffs
Sally J. Winder, Esq.
701 East King Street
Shippensburg, PA 17257
Attorney for Defendant
:rc
18
NO. 3089 CIVIL 1992
APPENDIX
I. ACTUAL EXPENDITURES BY PLAINTIFFS IN REPAIRING OR
COMPLETING HOUSE
Amount Provider Purpose
$1,571.00 Penelec Underground electric
850.00 Monroe Mech. Co. Heating/air conditioning
283.97 Appleby Bros. Air filters
680.00 Ronald Grosso Kitchen app. instal.
253.34 David Zimmerman Cabinet work
7.95 Zimmerman Cabinet Shop Cabinet work
70-.65 Builders Supply Kitchen post
89.00 Pella Window Window rep.
4,150-00~ Whitco Tile pur. and instal.
1,513.00 Whitco Waterproofing, misc.
12.60 Conestoga Tile Sealer
2,029.50 Gettys Mechanical Cont. Plumbing
138.00 Gettys Mechanical Cont. Sink instal.
3,170.72 R.F. Fager Co. Plumbing fixtures
3,796.22 Harvey Landis Roof repair
3,000.002 Whitco Carpeting
2,725.003 Fred M. Myers Painting
15.45 York Corrugating P.C. strainer
271.10 York Corrugating Sink
133.71 York Corrugating Sink
16.96 York Corrugating Dryer vents
707.94 Baldwin Brass Cent. Locks
100.97 Hechingers Locks
18.22 K-Mart Doorstops
241.68 R.F. Fager Co. Plumbing fixtures
159.99 Middletown Lumber Lumber
70.46 Middletown Lumber Molding
7.90 McCune's Lumber Rosin paper
~ Reduced from actual expenditure to court's estimate of
reasonable figure.
2 Reduced from actual expenditure to allowance figure
provided by contract.
3 Includes $1,300.00 paid by Plaintiffs to Myers for painting
on house while working for Defendant Spencer (Windsor Ridge Homes)
and for which Myers was not compensated.
1
NO. 3089 CIVIL 1992
717.45 Carl Rosenberry's Lumber
54.34 Carl Rosenberry's Lumber
164.65 McCune's Lumber Lumber
300.00 Webber Drywall Drywall
51.01 Webers Hardware Supplies
21.76 Carter Lumber Lumber
246.84 Hechingers Locks, scooter
65.78 St. Thos. Hardware Hinges
222.02 Hechingers Supplies
68.62 Lumber Yard Lumber
i,352.40 F & G Floors Refinishing
1,000.004 Lumber Yard Cherry stairs
733.00 Saul Cohick Masonry
680.00 Maryland Bluestone Sandstone
2,087.00 John Walters Excav. Rough grading
54.53 Martins Well Drill. Tank relocation
1,476.00 Whisler's Well Drill. Septic repair
81.56 Bruce B. Gamble Septic supplies
11.02 Bruce B. Gamble Septic supplies
18.82 Carter Plumbing PVC pipe
79.14 Carter Plumbing PVC pipe
166.71 New Enterprises Septic stone
886.00 Amer. Alum. & Insul. Insulation
534.51 Penn Fuel Gas, Inc. Gas service
42.34 Penn Fuel Gas, Inc. Gas service
2,078.90 Monroe Contractors Furnace work
8.62 Eberts Paints Paint
22.37 Eberts Paints Paint, stain
$39,310.725
4 Reduced from actual expenditure to court's estimate of cost
of oak as provided for in contract.
5 To the extent that a given expenditure submitted by
Plaintiffs does not appear in this list, the court did not find it
sufficiently substantiated, whether in amount, relevancy to the
contract, or reasonableness, to justify inclusion in an award of
damages.
2
NO. 3089 CIVIL 1992
II. ESTIMATED COSTS TO PLAINTIFFS FOR REPAIR AND COMPLETION
OF HOUSE NOT YET UNDERTAKEN
Amount Purpose
$ 704.00 Repair screen porch
3,667.00 Repair master bedroom
3,722.00 Repair staircase
363.00 Level floor, carpeting
304.00 Bridging
606.00 House fan
485.00 Vacuum system
$9,851.006
III. CREDITS DUE PLAINTIFFS FROM DEFENDANT SPENCER
(WINDSOR RIDGE HOMES)
Amount Item
$3,091.00 Omitted stonework
408.46 Wood type substitution
$3,499.467
6 To the extent that a given prospective expenditure
submitted by Plaintiffs does not appear in this list, the court did
not find it sufficiently substantiated, whether in amount,
~elevancy to the contract, or reasonableness, to justify inclusion
an an award of damages.
7 To the extent that a given credit submitted by Plaintiffs
does not appear in this list, the court did not find it
sufficiently substantiated, whether in amount, relevancy to the
contract, or reasonableness, to justify inclusion in an award of
damages.
NO. 3089 CIVIL 1992
IV. CREDITS DUE DEFENDANT SPENCER (WINDSOR RIDGE HOMES)
FROM PLAINTIFFS
Amount Item
$4,304.50 Change orders represented by Plaintiffs'
Exhibits 31-32
572.40 Shower door refund
58.00 Central vacuum
$4,934.908
V, DELAY DAMAGES DUE PLAINTIFFS FROM DEFENDANT SPENCER
(WINDSOR RIDGE HOMES)
Amount Item
$3,000.009 Rent
Vl. PLAINTIFFS' UNPAID BALANCE OF THE CONTRACT PRICE
Amount
$20,000.00~°
8 To the extent that a given credit submitted by Defendant
Spencer (Windsor Ridge Homes) does not appear in this list, the
court did not find it sufficiently substantiated, whether in
amount, relevancy to the contract, or reasonableness, to justify
inclusion in an award of damages.
9 As noted in the text, it is believed that, of the alleged
damages from unreasonable delay submitted by Plaintiffs, their
rental payments alone meet the legal test for recoverable
consequential damages.
~0 When the parties separated Plaintiffs had paid Defendant
Spencer $140,000.00 of the $160,000.00 contract price.
4
NO. 3089 CIVIL 1992
IV. CREDITS DUE DEFENDANT SPENCER (WINDSOR RIDGE HOMES)
FROM PLAINTIFFS
Amount Item
$4,304.50 Change orders represented by Plaintiffs'
Exhibits 31-32
572.40 Shower door refund
58.00 Central vacuum
$4,934.908
V.~ DELAY DA~L~GES DUE PLAINTIFFS FROM DEFENDANT SPENCER
(WINDSOR RIDGE HOMES)
Amount Item
$3,000.009 Rent
Vl. PLAINTIFFS' UNPAID BALANCE OF THE CONTRACT PRICE
Amount
$20,000.00~°
8 To the extent that a given credit submitted by Defendant
Spencer (Windsor Ridge Homes) does not appear in this list, the
court did not find it sufficiently substantiated, whether in
amount, relevancy to the contract, or reasonableness, to justify
inclusion in an award of damages.
9 As noted in the text, it is believed that, of the alleged
damages from unreasonable delay submitted by Plaintiffs, their
rental payments alone meet the legal test for recoverable
consequential damages.
~0 When the parties separated Plaintiffs had paid Defendant
Spencer $140,000.00 of the $160,000.00 contract price.
4