J-S70045-16
NON-PRECEDENTIAL DECISION - SEE SUPERIOR COURT I.O.P. 65.37
HOWARD E. COHEN AND EILEEN C. : IN THE SUPERIOR COURT OF
COHEN, Husband and Wife, : PENNSYLVANIA
:
Appellants :
:
v. :
:
LONG & FOSTER REAL ESTATE, INC., : No. 698 EDA 2016
Appeal from the Judgment entered March 31, 2016
in the Court of Common Pleas of Delaware County,
Civil Division, No(s): 2014-9715
BEFORE: OLSON, OTT and MUSMANNO, JJ.
MEMORANDUM BY MUSMANNO, J.: FILED NOVEMBER 23, 2016
Howard E. Cohen and Eileen C. Cohen (collectively, “the Cohens”),
husband and wife, appeal from the Judgment entered against them and in
favor of their real estate broker, Long & Foster Real Estate, Inc. (“L&F”), in
this action brought pursuant to Pennsylvania’s Unfair Trade Practices and
Consumer Protection Law (“UTPCPL”).1 We affirm.
In its Opinion, the trial court set forth the factual and procedural
history underlying the instant appeal, which we incorporate herein by
reference. See Trial Court Opinion, 4/29/16, at 1-5.
Following a bench trial, the trial court entered a verdict in favor of L&F
and against the Cohens. The Cohens filed post-trial Motions, which the trial
court denied. On February 16, 2016, the trial court denied the Cohens’ post-
trial Motions, after which the Cohens filed a Notice of Appeal, followed by a
1
73 P.S. § 201-1 et seq.
J-S70045-16
court-ordered Pa.R.A.P. 1925(b) Concise Statement of matters complained
of on appeal. On March 31, 2016, the trial court entered judgment.
Accordingly, we may consider the issue presented by the Cohens in this
appeal. See Commonwealth v. Cooper, 27 A.3d 994, 1008 (Pa. 2011)
(stating that “[a] notice of appeal filed after the announcement of a
determination but before the entry of an appealable order shall be treated as
filed after such entry and on the date thereof.”) (citation omitted).
The Cohens present the following claim for our review:
Did the [trial] court commit legal error and/or abuse its
discretion by entering a [v]erdict in favor of [L&F] and against
[the Cohens], based solely on the [trial] court’s stated rejection
of [the Cohens’] credible, unimpeached, uncontroverted and
unrebutted expert testimony regarding the unreasonable conduct
by the sales agent of [L&F] in underestimating the future
settlement costs and monthly carrying charges, specifically[,]
the ongoing real estate taxes, beginning from the date of a
future settlement on a to-be-constructed new home?
Brief for Appellants at 2-3.
The Cohens argue that the testimony of their expert, Donald Weiss
(“Weiss”), confirmed that, pursuant to 49 Pa. Code. § 35.334, it is a real
estate broker’s duty to provide the buyer with a statement of estimated
settlement and carrying costs. Brief for Appellants at 14. The Cohens assert
that pursuant to subsection 35.334(a), before an agreement of sale is
executed, the broker is required to provide each party with a written
estimate of reasonably foreseeable expenses that the party can be expected
-2-
J-S70045-16
to pay, including but not limited to taxes and assessments. Id. According
to the Cohens, Weiss testified that
a knowledgeable and experienced sales broker should have
known in February 2010 that taxes go up annually, that the
common level ratio increases in July prior to the next calendar
year to which it would apply, that the school taxes increase as of
July 1 of each year, that the other township and county taxes
increase as of January 1 of each year, and that the taxes had
increased by 9% from 2009 to 2010....
Id. at 16. The Cohens argue that L&F should have projected this same 9%
increase factor when it made forward-looking estimates of settlement costs
and monthly carrying charges, including future real estate taxes. Id. The
Cohens assert that, based upon the evidence presented by Weiss, and L&F’s
failure to counter this evidence, the trial court abused its discretion in not
crediting Weiss’s testimony. Id. at 17. The Cohens claim that L&F’s conduct
“deprived [them] of the fundamental fairness of having the material
information to which they were entitled in order to make their purchase
decision.” Id. They further argue that they relied upon this “deceptive and
misleading” information, and that the verdict should be reversed. Id.
As this appeal arises from a non-jury trial, we observe that
with regard to factual determinations, the trial court acts as the
factfinder in a bench trial and may believe all, part or none of
the evidence presented. Issues of credibility and conflicts in
evidence are for the trial court to resolve; this Court is not
permitted to reexamine the weight and credibility determinations
or substitute our judgment for that of the factfinder.
Furthermore, the findings of the judge in a non-jury trial are
given the same weight and effect as a jury verdict such that the
court’s findings will not be disturbed on appeal absent an abuse
of discretion, error of law, or lack of support in the record. We
-3-
J-S70045-16
will not disturb the court’s factual findings merely on the basis
we would have reached a different conclusion; rather, our task is
to “determine whether there is competent evidence in the record
that a judicial mind could reasonably have determined to support
the finding.
Ruthrauff, Inc. v. Ravin, Inc., 914 A.2d 880, 888 (Pa. Super. 2006)
(internal quotation marks and citations omitted). “Conclusions of law,
however, are not binding on an appellate court[,] whose duty it is to
determine whether there was a proper application of law to fact by the lower
court. On pure questions of law, … our review is plenary.” Kohl v. PNC
Bank Nat’l Ass’n, 912 A.2d 237, 248 n.16 (Pa. 2006) (internal quotation
marks and citation omitted).
In its Opinion, the trial court addressed this claim, and determined
that it is without merit. See Trial Court Opinion, 4/29/16, at 11-15, 17-18.
We agree with the sound reasoning of the trial court, as set forth in its
Opinion, and affirm on this basis. See id.
Judgment affirmed.
Judgment Entered.
Joseph D. Seletyn, Esq.
Prothonotary
Date: 11/23/2016
-4-
Circulated 10/31/2016 03:41 PM
IN THE COURT OF COMMON PLEAS OF DELAWARE COUNTY, PENNSYLVANIA
CIVIL DIVISION
HOWARD E. COHEN : NO. 14-009715
and
EILEEN COHEN h/w
v.
LONG & FOSTER REAL ESTATE, INC.
HONORABLE CHRISTINE FIZZANO CANNON FILED: April 29, 2016
OPINION
After a non-jury trial conducted on December 9, 2015, this Court entered an
Order/Verdict, on December 21, 2015, finding in favor of Defendant, Long & Foster Real
Estate, Inc. (hereinafter "Defendant") and against Plaintiffs, Howard E. Cohen and
Eileen Cohen, husband and wife (hereinafter "Plaintiffs"). On February 16, 2016, after
argument, this Court denied Plaintiffs' Motion for Post-Trial Relief. Plaintiffs filed an
appeal on March 2, 2016.
Plaintiffs purchased 245 Valley Ridge Road, Haverford Township, Delaware
County, Pennsylvania 19041 (hereinafter "the subject property"), on January 10, 2011,
for the sum of $1,113,444.04. Plaintiffs' Amended Complaint, filed December 10, 2014,
1118. The subject property was a newly constructed residential home within the
Haverford Reserve project. Id. at ,i 13. Defendant, Long & Foster Real Estate, Inc. was
1
the listing broker for the builder/developer of the Haverford Reserve project. Id. at~
12. Notes of Testimony, p. 67. The agreement of sale between the Plaintiffs and
Haverford Reserve, L.P. was fully executed on March 3, 2010. Exhibit D-5. Prior to
execution of the sales agreement, Plaintiffs met with Jeannine M. Carleton, the sales
manager for the Haverford Reserve project and a licensed real estate salesperson
employed by Defendant. Plaintiffs' Amended Complaint,~~ 7 and 8; Notes of
Testimony, p. ~8. On February 13, 2010, Ms. Carleton submitted to the Plaintiffs a
written Buyer Settlement Cost Estimate, that she prepared, which contained information
that the estimate for county, township and school district real estate property taxes for
the property would amount to $17,719.33 annually. Plaintiffs' Amended Complaint,~
15; Exhibit P-2; Notes of Testimony, p. 15-16. Plaintiffs claimed that the Defendant's
agent, Ms. Carleton, made verbal representations that the real estate taxes for the
property would be about 2 percent of the sales price. Notes of Testimony, p. 13. The
Buyer Cost Estimate Sheet indicated that the property taxes were estimated to be 2.08
percent of the then-believed sale price of $850,000. Plaintiffs' Amended Complaint,~
15; Notes of Testimony, p. 13, 17 and 35. Ms. Carleton testified that while she did not
recall making any verbal representations regarding real estate taxes, if she made any
representations, she would have told Plaintiffs that their taxes would be approximately
2.1 percent of the sales price. Notes of Testimony, p. 85 and 92. She also stated that
she told the Plaintiffs that they should "check with the township". Notes of Testimony,
p. 92. The Plaintiffs never verified the tax information. Notes of Testimony, p. 19.
2
The Plaintiffs signed the Agreement of Sale, on March 3, 2010, three weeks after
they received the Buyer Settlement Cost Estimate. Notes of Testimony, p. 36. Due to
an increased sale price caused by construction extras and upgrades, the Plaintiff,
Howard Cohen, testified that he expected that their annual real estate taxes would
amount to $23,382.32, based on the projected 2.1 percent of sales price tax estimate,
as the final sales price was $1,113,444.04. Plaintiffs' Complaint, 19; Notes of
Testimony p. 23 and 40-41. The title company that handled the settlement on the
subject property estimated the taxes to be $24,500.00, on the HUD-1 settlement sheet,
a difference of $1,118.00 more than the Plaintiffs' expectation based on the Buyer
Settlement Cost Estimate. Exhibit P-2; Exhibit P-4; Notes of Testimony, p. 42. After
multiple tax assessment appeals, the annual taxes for 2014 amounted to $26,500.00,
$3,117.68 a year higher than the Defendant's original 2010 estimate, or 2.38 percent of
the final sales price. Plaintiffs' Amended Complaint, ~23; Notes of Testimony, p. 26.
At the non-jury trial, Plaintiff, Howard E. Cohen, testified on his own behalf and
reviewed his experience purchasing the subject property, the contract for sale,
settlement, and the subsequent real estate tax proceedings. Notes of Testimony, pp. 8-
63. Plaintiff called Jeannine Carleton, as of cross examination, who reviewed her efforts
as the sales manager at the Haverford Reserve project. Notes of Testimony, pp. 63-
100. Finally, Plaintiff called Donald J. Weiss, Esquire, an expert qualified by the Court
to testify as a licensed real estate broker. Notes of Testimony, pp. 112-154.
3
Defendant presented the testimony of Andrea Baptiste, the managing broker of
the Long & Foster office location in Doylestown, Pennsylvania, and Janice Robinson, a
sales and administrative support assistant at the Haverford Reserve project for the
Goldenberg Group. Notes of Testimony, pp. 159-167 and 169-180.
Plaintiff introduced and admitted into the record at trial: certain pleadings (P-1);
the Buyer Settlement Cost Estimate (P-2); the agreement of sale, dated March 3, 2010
(P-3); the HUD-1 Settlement Statement (P-4); selected provisions of the Pennsylvania
Real Estate Agent Professional Conduct Regulations under the Pennsylvania Real Estate
Licensing and Registration Act, 63 P.S. §455.101 et. seq., (P-5); historical property real
estate assessments for the Haverford Reserve project (P-6); historic common level
ratios, tax rate tables, bond market yields, and a portion of Modern Real Estate Practice
in PA (P-7); Plaintiffs' statement of attorney's fees (P-8); a Summary of Plaintiffs'
Compensatory Damage Calculations by Donald Weiss, Esquire, (P-9); and the
deposition transcript of Jeannine Carleton (P-10). See Plaintiffs Exhibit P-1 through P-
10.
The Defendant introduced and admitted into evidence: the agreement of sale (D-
5); the HUD-1 Settlement Statement (D-9); the Public Offering Statement for the
Haverford Reserve (D-6); the Buyer Settlement Cost Estimate (D-8), Plaintiffs' Response
to Defendant's Request for Production of Documents (D-10); and an Options List for the
subject property (D-12). See Defendant's Exhibits D-5, D-6, D-8, D-10 and D-12.
4
Plaintiffs' Amended Complaint did not include claims for negligence, negligent
misrepresentation, breach of contract, or fraud, but rather, the Amended Complaint
contained only one count, for claimed violation of Pennsylvania's Unfair Trade Practices
and Consumer Protection Law, 73 P.S. §201-1 et. seq. (hereinafter "UTPCPL"). See
Plaintiffs' Amended Complaint,~~ 26-63. Plaintiffs' Amended Complaint sought relief
under subsections 201-2(4)(v) and (xxi) of the Act. At trial, Plaintiffs also sought relief
under section 201-2(4)(ii).
The UTPCPL prohibits "Unfair methods of competition" and "unfair or deceptive
acts or practices" as follows, in relevant part:
(4) "Unfair methods of competition" and "unfair or deceptive acts or practices"
mean any one or more of the following: ...
(ii) Causing likelihood of confusion or of misunderstanding as to the
source, sponsorship, approval or certification of goods or services; ...
(v) Representing that goods or services have sponsorship, approval,
characteristics, ingredients, uses, benefits or quantities that they do not
have or that a person has a sponsorship, approval, status, affiliation or
connection that he does not have; ...
(xxi) Engaging in any other fraudulent or deceptive conduct which creates
likelihood of confusion or of misunderstanding.
73 P.S. Section 201-1 and 201-2(4)(ii), (v) and (xxl).
After submission of post-trial memoranda, this Court entered its Verdict/Order on
December 21, 2015 finding in favor of the Defendant and against Plaintiffs.
Plaintiffs complain on appeal as follows:
1. This Honorable Court committed error of law or abused its discretion, if and
to the extent that its verdict was based on a ruling that the parol evidence
5
rule or contract integration clause barred Plaintiffs' PA Unfair Trade Practices
and Consumer Protection Law ("UTPCPL'') claim against Defendant.
2. This Honorable Court committed error of law or abused its discretion, if and
to the extent that its verdict was based on a ruling that Plaintiffs' UTPCPL
claim required proof of an intentional action by Defendant.
3. This Honorable Court committed error of Jaw or abused its discretion, if and
to the extent that its verdict was based on a ruling that there was insufficient
evidence of liability as to Plaintiffs' UTPCPL claim against Defendant.
4. This· Honorable-co.urt-commTttederrorof law or abused its discretion, if and
to the extent that its verdict was based on a ruling that there was insufficient
evidence of damages as to Plaintiffs' UTPCPL claim against Defendant.
5. This Honorable Court committed error of law or abused its discretion, if and
to the extent that its verdict was based on a ruling that Plaintiffs allegedly
misrepresented their actual purchase price for the subject real estate in any
manner, or otherwise allegedly violated any section of the Real Estate
Settlement Procedures Act, and/or the Pennsylvania real estate transfer tax
laws.
6. This Honorable Court committed error of law or abused its discretion, if and
to the extent that its verdict was based on a rulinq which considered any
matter other than the differential between (a) the proportionate annualized
real estate taxes which Defendants actually had estimated for Plaintiffs at the
time before Plaintiffs had committed to purchase the home, and (b) the
proportionate annualized real estate taxes which Defendant should have been
able to estimate at the time before Plaintiffs had committed to purchase the
home, using publicly available information.
7. · This Honorable Court committed error of law or abused its discretion, if and
to the extent that its verdict was based on a ruling that any portion of the
testimony proffered by any of Defendant's fact witnesses was accepted as
expert testimony.
8. This Honorable Court committed error qf law or abused its discretion, if and
to the extent that its verdict was based on a ruling that any portion of the
unrebutted testimony proffered by any of Plaintiffs' fact and expert witnesses
was deemed not credible.
Plaintiff's Concise Statement of Errors and/or Rulings Complained of an Appeal, filed
March 23, 2016.
6
First, this Court addresses the Plaintiffs' complaint that this Court erred if it based
its decision on a ruling that the parol evidence or contract integration clause barred
Plaintiffs' UTPCPL claim against the Defendant. This Court did not exclude any
testimony or exhibits due to application of the parol evidence rule.
Next, the Plaintiffs complain on appeal that this Court erred if it based its
decision on a ruling that Plaintiffs' UTPCPL claim required proof of an intentional action
by Defendant. This Court did not make such a ruling and did not require proof of
intentional wrongdoing.
The UTPCPL is Pennsylvania's consumer protection law and seeks to prevent
"[u]nfair methods of competition and unfair or deceptive acts or practices in the
conduct of any trade or commerce ... " The purpose of the UTPCPL is to protect
the public from unfair or deceptive business practices. Our Supreme Court has
stated courts should liberally construe the UTPCPL in order to affect the
legislative goal of consumer protection. DeArmitt v. New York Life Ins. Co., 73
A.2d 578, 591 (Pa. Super. 2013).
The UTPCPL provides a private right of action for anyone who "suffers any
ascertainable loss of money or property" as a result of "an unlawful
method, act or practice". Upon a finding of liability, the court has the
discretion to award "up to three times the actual damages" and provide
any additional relief the court deems proper. Section 201-2( 4) lists twenty
enumerated practices which constitute actionable "unfair methods of
competition" or "unfair or deceptive acts of practices." The UTPCPL also
contains a catchall provision at 73 P.S. 201-2(4)(xxi). The pre-1996
catchall provision prohibited "fraudulent conduct" that created a likelihood
of confusion or misunderstanding. In 1996, the General Assembly
amended the UTPCPL and revised Section 201-2(4)(xxi) to add "deceptive
conduct" as a prohibited practice. The current catchall provision proscribes
"fraudulent or deceptive conduct which creates the likelihood of confusion
or of misunderstanding."
7
Id. at 591-592 (citing Bennett v. A.T. Masterpiece Homes at Broadsprings, 40
A.3d 145, 151-52 (Pa. Super. 2012) (internal citations omitted)). See also Agliori
v. Metropolitan Life Ins. Co., 879 A.2d 315, 318 (Pa. Super. 2005).
In order for a private individual to bring a private claim under Unfair Trade
Practice and Consumer Protection Law (UTPCPL), that individual must first
establish that he or she is a purchaser or lessee, that the transaction is dealing
with goods or services, that the good or service was primarily for personal,
family, or household purposes, and that he or she suffered damages arising from
the purchase or lease of goods or services; to prevail, the individual must
then prove that the defendant was engaged in unfair methods of
competition and unfair or deceptive acts or practices and that the
transaction constituted trade or commerce within the meaning of the UTPCPL.
Fazio v. Guardian Life Ins. Co. Of America, 62 A.3d 396. hn 3 (Pa. Super.
2012)(citing73 P.S. § 201-1)) (emphasis added).
. . . the UTPCPL plaintiff must still prove justifiablereliance and
causation, because the legislature "never intended [the] statutory language
directed against consumer fraud to do away with the traditional common law
elements of reliance and causation." DeArmitt v. New York Life Ins. Co., 73 A.2d
at 592. (citing Toy v. Metropolitan Life Insurance Company, 928 A.2d 186, 202)
(emphasis added).
Plaintiffs claim that the Defendant violated the UTPCPL by:
... (ii) Causing likelihood of confusion or of misunderstanding as to the
source, sponsorship, approval or certification of goods or services; ... 73
P.S. Section 201-1 and 201-2(4)(ii)
Plaintiffs did not establish that the Defendant's caused likelihood of confusion or of
misunderstanding as to the source, sponsorship, approval or certification of goods or
services. In fact, there is no evidence of record regarding the source, sponsorship,
approval or certification of the subject property.
Plaintiffs further claim that the Defendant violated the UTPCPL by:
... (v) Representing that goods or services have sponsorship, approval,
characteristics, ingredients, uses, benefits or quantities that they do not have or
8
that a person has a sponsorship, approval, status, affiliation or connection that
he does not have; ...
73 P.S. Section 201-1 and 201-2(4) (v).
Plaintiffs, however, failed to meet their burden of proof to establish a violation of this
section.
Specifically, the Plaintiffs complain that the real estate agent's alleged verbal
representations, that the estimated real property taxes on the subject property would
be about2.0 percent, and/or the written estimate, that the real estate taxes would be
about 2.1 percent of the purchase price, were representations of a characteristic that
the subject property did not have. However, the real estate agent, Ms. Carleton,
testified credibly that any verbal representations that she may have made to Plaintiffs
about real estate taxes, although she did not recollect any, would have included the
word approximately. Notes of Testimony, pp. 85 and 92. In fact, Plaintiff, Howard
Cohen, asserted that she stated that the real estate taxes would be about 2 percent of
the sale price. Notes of Testimony, p. 13. In addition, the record makes clear that the
Buyer Settlement Cost Estimate provides that the estimated real estate taxes would be
about 2.1 percent of the purchase price, or $17,719.33, only $5.33 less than the
Plaintiffs' own expert testified his calculations would have concluded, if providing an
estimate at the same time.1 See discussion, infra, pp. 11 - 15. Exhibit P-2. In addition,
1
The Plaintiffs' expert testified that his calculation would have resulted in an estimate of $17, 714.00 for February
2010. See Notes ofTestimony, pp. 140-142. The expert opined that to determine taxes, you should first determine
what the common level ratio factor is, then multiply the value of the property (in this case the sales price) by the
common level ratio factor (to come up with an assessment} and then multiply the assessment by the millage.
Notes ofTestimony, p. 116.
9
the real estate taxes escrowed by the title company reflected an annual amount of
$24,500.00 in January 2011, and the actual real estate taxes in 2014 (four years after
the estimate was provided and three years after settlement) were set at 2.38 percent of
the total purchase price, $26,500.00. Notes of Testimony, pp. 31-31; Plaintiff's
Amended Complaint, ,i23. This Court finds that the alleged misrepresentation of a
characteristic of the property made by Defendant's agent of the estimated real estate
taxes in 2010 was not a misrepresentation at all and there was no likelihood of
confusion or misunderstanding. See discussion, infra, pp. 11-15.
Furthermore, the Plaintiffs in this matter argue that the Defendant is liable
pursuant to the "catch-all provision" of the Unfair Trade Practices and Consumer
Protection Law ("UTPCPL") that provides: "(xxi) engaging in any other fraudulent or
deceptive conduct which creates a likelihood of confusion or of misunderstanding." 73
P.S. Section 201-2(4)(xxi). "In Bennett v. A.T. Masterpiece Homes at Broadsprings,
LLC, 40 A.3d 145 (Pa. Super. 2012), the [Pennsylvania Superior Court] panel concluded
that a 1996 ... amendment to the catch-all provision that added the language "or
deceptive conduct" changed the requirement from proving actual fraud to merely
proving deceptive conduct". Milliken v. Jacono, 60 A.3d 133 (Pa. Super 2012) (citing
Bennett v. A.T. Masterpiece Homes at Broadsprings. LLC, 40 A.3d 145, 150-153 (Pa.
Super. 2012)). The Pennsylvania Superior Court has held that '"misleading conduct'
could be a catch[-]all violation." Bennett at 155.
10
Even with this lowered burden, the buyers in the instant case did not prove their
claim for violation of the UTPCPL as the Plaintiffs failed to provide any evidence that the
Defendant engaged in deceptive or misleading conduct. The Plaintiffs in this case made
a calculation of an estimate of settlement costs that included a figure for estimated real
estate taxes that was only $5.33 different than that which the Plaintiffs' expert
calculations would have established. See Notes of Testimony, pp. 140-141. There was
simply no evidence of deceptive conduct or misleading conduct.
Third, the Plaintiffs complain on appeal that this Court erred in finding that there
was insufficient evidence of Defendant's violation of the UTPCPL. This Court did, in
fact, conclude that the Plaintiffs did not establish any violation of the UTPCPL by
Defendant, and, in addition to that noted above, this Court further notes:
By using the formula proposed by the Plaintiffs' expert, by the expert's own
admission on cross-examination, the Defendant's calculation at the time it was made,
February, 2010, should have been $17,714.00. Notes of Testimony, pp. 140-141.
Again, what Defendant did estimate was $17,719.33, a difference of $5.33. Id.
Plaintiffs' expert actually states that the estimate provided to the Plaintiffs on February
17, 2010 was the correct calculation. Id., p. 137 and 141. Plaintiffs' expert, however,
criticized the Defendant for providing the estimate for February 2010, when the
settlement did not take place until January 2011. Id. at p. 141. However, Plaintiffs'
expert admitted that a real estate agent or broker must provide the estimate at or
before the Agreement of Sale is executed in accordance with 49 Pa. Code 35.334. Id. at
11
142. The Agreement of Sale in this matter was signed on March 3, 2010. Exhibit D-5.
Title 49, Section 35.334 of the Pennsylvania Code provides that a real estate agent is
required to provide an estimate of closing costs before an Agreement of Sale is
executed. 49 Pa. Code 35.334 (a) (emphasis added); Notes of Testimony, p. 142.
This section further provides that the estimate provided "shall be as accurate as may be
reasonably expected of a person having knowledge of, and experience in, real estate
sales." 49 Pa. Code 35-334(b). The Plaintiffs' expert claimed that Ms. Carleton should
have known that her estimate would not accurately reflect the estimate of taxes for the
subject property because she provided the number for February 2010 instead of the
number when the settlement was expected to take place, after the annual change in
common level ratio factor would have been published. Notes of Testimony, pp. 129-
130, p. 143. This argument is without merit.
Plaintiffs' expert testified that a reason that the Plaintiffs "got wacked" on their
real estate taxes was because the common level ratio factor changed after they signed
the Agreement of Sale and before settlement. Notes of Testimony, p. 135. However,
this Court finds that Defendant's agent simply could not predict such a change. Even
the table of common level ratio factors admitted into evidence by the Plaintiffs indicated
that some years the common level ratio factor rises, some years it falls and some years
it remains the same. Exhibit P-7. The information becomes available in or about July
of a given year. Notes of Testimony, p. 117 and 132. A common level ratio factor is the
"mathematical reciprocal of the actual common level ratio". Exhibit P-7. These real
estate valuation factors are based on sales data compiled by the State Tax Equalization
12
Board". Id. Plaintiffs' expert claimed that we "all know that taxes are going up ...
school taxes ... [s]o they should have been basing iton what the millages would have
been for school taxes at the end of the year. And the CLR changes every July and so
do school taxes change every July ... [T]hey should have redone it in July." Notes of
Testimony, pp. 129-130. This Court found Ms. Carleton had to provide the estimate
before the Agreement of Sale was executed. This Court further found that is not
reasonable to expect a real estate agent with experience in real estate sales to predict
the change in school tax millage2 or the annual rise or fall in the common level ratio
factor.3 It is further unreasonable to require that the agent include that prediction in
his/her calculation of an estimate of settlement costs many months before the change,
if any, in the CLR and change in school tax millage are made public. The Buyer
Settlement Cost Estimate was required to be provided before the Agreement of Sale
was signed, redoing it in July would not have changed the Agreement that had already
been executed by the Plaintiffs. This Court rejects the expert's testimony indicating
that such a prediction and inclusion would be reasonably included in such an estimate
and rejects the conclusion that the calculation should have been redone in July, months
after the Plaintiffs have entered into the Agreement of Sale.
The agreement of sale was signed in March 2010. Exhibit D-5. Plaintiffs' expert
claimed that Defendant's agent should have projected the taxes after July 2010
2
Plaintiffs' expert testified that school tax millage is set in May and takes effect July 1 '1• Notes of Testimony, p.
117.
3
Plaintiffs' expert testified that the common level ratio factor changes in or about June or July. !Q. at p. 135.
13
because real estate tax rates and common level ratio factors would change before
settlement on the subject property. Notes of Testimony, p. 135. However, a reasonable
real estate agent with experience in real estate sales cannot be expected to predict
those changes and Plaintiffs failed to establish Defendant was required to change the
pre-agreement estimate. It must also be noted that the settlement date for this
property had been extended. Exhibit P-4; Exhibit D-5. The anticipated closing date was
in November of 2010. Exhibit D-5. The settlement took place in January 2011. There is
no evidence that anyone could have known that the settlement date would be
extended, or to what date it would be extended. However, according to Plaintiffs'
expert's theory, the real estate agent providing the estimate would reasonably be
responsible for predicting when the property settlement would take place for the
subject property or providing a new estimate every time the millage, tax rate or CLR
change. This Court does not accept this assertion and the Plaintiff did not point to any
case law, statute, rule or regulation governing real estate agents that would have
established such a requirement.
The Public Offering Statement, incorporated into the Agreement of Sale,
provided that: "The assessed value of the completed Units for real estate tax purposes
is not yet known. The assessed value of the Units may vary depending on their size,
features, and cost." Exhibit D-6. Furthermore, the Buyer Estimate Settlement Cost
sheet clearly states that the "Information herein deemed reliable but not guaranteed."
Exhibit P-2. The title of the document itself makes clear that it is an estimate. Id. The
Buyer Settlement Cost Estimate indicated that "[t]he above figures are approximate
14
settlement costs and will be adjusted as of the date of final settlement, if necessary."
Exhibit P-2. The figures were adjusted for the HUD-1 Settlement Sheet at the final
settlement. Exhibit" P-4.
Plaintiffs' expert also testified that "[e]very new property is over-assessed when
it comes out of the block" and that the subject property was over-assessed. Notes of
Testimony p. 152. An over-assessment, of course, would make the taxes higher than
anticipated. Under Plaintiffs' expert's theory, a real estate agent would also have to
guess what the over assessment might be for a given property in order to properly
estimate the real property taxes.
Fourth, Plaintiffs have claimed that this Court erred, if it based its decision upon
a finding that there was insufficient evidence of damages as to Plaintiffs' UTPCPL claim
against Defendant. This Court did not and need not address the sufficiency of evidence
of damages in this matter, as the Plaintiffs have failed to establish a violation of any
section of the UTPCPL.
Fifth, Plaintiffs complain on appeal that this Court erred if it based its decision on
a finding that the Plaintiffs misrepresented their actual purchase price for the subject
property, or that Plaintiffs violated the Real Estate Settlement Procedures Act or
Pennsylvania's real estate transfer laws. This was not a conclusion or finding that this
Court made in this matter.
15
Next, Plaintiffs also claimed on appeal that this Court erred if its decision was
based upon a finding that the testimony of Defendant's fact witnesses was expert
testimony. This Court did not consider the testimony of any of Defendant's witnesses
to be expert testimony. However, this Court did not accept Plaintiffs' expert's testimony
that the Defendant should have modified her estimate, and did not find that the
Defendant's actions, through its agent, were deceptive or misleading in any way. See
discussion, supra, pp. 11-15.
Plaintiffs also complain on appeal that this Court erred by basing its decision on
any matter other than the differential between "(a) the proportionate annualized real
estate taxes which Defendants actually had estimated for Plaintiffs at the time before
Plaintiffs had committed to purchase the home, and (b) the proportionate annualized
real estate taxes which Defendant should have been able to estimate at the time before
Plaintiffs had committed to purchase the home, using publicly available information."
Plaintiffs' Concise Statement of Errors and/or Rulings Complained of an Appeal, filed
March 23, 2016, ~ 6. This complaint by Plaintiffs on appeal seems to imply that any
deviation between the two numbers is a violation of the UTPCPL. This Court does not
accept this theory. The Defendant must prove misleading conduct and has failed to do
so. A deviation of $5.33 proves that Ms. Carleton's was a good faith and reasonable
estimate, not a deceptive act that would have constituted a violation of the UTPCPL. In
addition, it must be noted that even Plaintiff, in its Concise Statement of Matters
Complained of On Appeal, only suggests that the relevant inquiry is that figure that was
provided and that figure that should have been provided at the time before Plaintiffs'
16
committed to purchase the house, March 3, 2010. Plaintiffs' Concise Statement of
Errors and/or Rulings Complained of an Appeal, filed March 23, 2016, ~ 6. As such,
Plaintiff does not seem to be suggesting that the estimate should have been redone
after execution of the agreement of sale and this Court agrees that it was not required
to be recalculated after the CLR and school tax information became available in July
2010.
Lastly, Plaintiffs complain that this Court erred by ruling that any portion of the
testimony proffered by any of the Plaintiffs' fact and expert witnesses was deemed not
credible. The relevant facts to this Court's analysis are not in dispute. This Court
accepts that the Defendant estimated, in March 2010, that the real estate taxes for a
$850,000.00 home would be $17,719.33 at settlement and accepts that the actual real
estate taxes for a $1,113,444.04 home in this matter were $26,500 in 2014. However,
this Court finds that the Defendant made a good faith estimate as required by 49 Pa.
Code 35.334. This Court does not agree that it would have been reasonable for the
Defendant to predict the change in the common level ratio factor or the school tax
millage when making her estimate before the Agreement of Sale was signed. As such,
based on the calculations used by the Defendant's expert, the proper estimate, made in
March 2010, would have been $17,714.00. The minor difference between a $17,719.33
estimate and a $17,714.00 estimate cannot be deemed a misrepresentation, deceptive
or misleading. The representation made by the Defendant was reasonable and
accurate at the time that it was made and the Buyer Settlement Cost Estimate makes
clear to the Plaintiffs that that the figures provided are an estimate, are the
17
approximate settlement costs, and "will be adjusted as of the date of final settlement, if
necessary." Exhibit P-2 (emphasis added). The numbers were adjusted by the title
company on the HUD-1 Settlement Sheet to reflect the annual taxes to be $24,500, still
lower than the actual taxes that resulted after what Plaintiffs' own expert calls the over-
assessment of the subject property, and still lower than the amount the taxing
authorities were willing to accept in 2014, $26,500. The real estate agent could not
have been expected to predict the change in CLR, the change in school tax millage, the
change in settlement date, the over-assessment, or the amount the taxing authorities
would bewillinq to accept with exact precision and this Court finds that the estimate
that was made was made at the appropriate time, was reasonable under the
circumstances and did not constitute a deceptive or misleading act.
BY THE COURT:
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