I. INTRODUCTION
Before the court for consideration are plaintiffs, Shannon Floyd, Norman D’Avanzo, and Ruth D’Avanzo’s, complaint filed April 2, 2013, defendant Edward C. Wigfield’s new matter and cross-claim filed on May 16, 2013, and defendant Northampton County Regional Realty, LLC d/b/a Keller Williams Real Estate’s new matter and new matter cross-claims filed on May 7, 2013, defendant’s, Krause Home Inspection Service, Inc. answer to plaintiffs’ complaint with new matter and cross claims filed on July 17, 2013, answer, new matter and crossclaims of defendant, Prudential Patt, White Real Estate-Macungie, to plaintiffs’ complaint filed on August 8, 2013.
Prior to trial, at the pre-trial conference on August 19, 2014, and after specific discussion with the court, Wigfield informed the court that, at trial, he would be pursuing all cross-claims against Keller Williams, Krause, and PattWhite. As a result of Wigfield’s representation at the pretrial conference, counsel for said defendants appeared at trial prepared to defend against the Wigfields ’ cross-claims. However, at the trial held September 8, 2014, Wigfield did not present any evidence whatsoever in support of the Wigfields’ cross-claims against Keller Williams, Krause, or Patt-White. Based upon the Wigfields’ failure to present any evidence in furtherance of their cross-claims, this court dismisses the cross-claims filed by the Wigfields against Keller Williams, Krause, and Patt-White and the following findings and conclusions will not further address said cross-claims.
Also at the pre-trial conference, counsel for Keller Williams, Krause, and Patt-White advised the court that Keller Williams, Krause, and Patt-White indicated that they had reached an agreement to withdraw all claims, cross-claims, joinders, and new matters filed by and
Additionally, at the outset of trial, the parties stipulated to the fact that plaintiffs, in the course of litigation, have entered into settlement agreements with all defendants except the Wigfields. At the close of the evidentiary portion of the non-jury trial held September 8, 2014, counsel for Keller Williams, Krause, and PattWhite presented and entered into evidence the following settlement agreements: “Keller Williams 1,” “Krause 1,” and “Prudential 1.” These agreements, executed individually between the plaintiffs and all defendants except the Wigfields, release and discharge the plaintiffs’ claims against Keller Williams, Krause, and Patt-White. Therefore, this court will not address Count VII, Count VIII, Count IX, and the portion of Count X against Keller Williams, as the claims contained in said counts have been released and discharged by virtue of the individual settlement agreements executed between the plaintiffs and Keller Williams, Krause, and Patt-White.
In light of the foregoing, the findings and conclusions contained in this opinion will only address claims by the plaintiffs against the Wigfields which are contained in Count I-VI and X-XI of the plaintiffs’ complaint.
II. FINDINGS OF FACT
1. On or about October 9, 2010, plaintiffs purchased property from defendant Wigfields, located at 4774 Jasper Road, Emmaus, Pennsylvania, (“property”)
2. Prior to plaintiffs purchase of said real estate, it was solely owned by defendant Wigfields, who made significant changes to the characteristics and use of the property between the time they bought it and the time it was sold to plaintiffs.
3. During their ownership, defendant Wigfields, converted a barn building located on the property into multiple apartment units, renovated other buildings on the property, altered the property’s water waste system and performed other general work as owners of the property.
4. When defendant Wigfields decided to sell the property in 2009, they entered into a listing agreement with defendant Keller Williams.
5. Thereafter, defendant Wigfields prepared various documents and provided information, including a disclosure statement, wherein they made representations with regard to the characteristics, qualities, defects and other matters concerning the property, but did not disclose any violations or unpermitted work concerning the additions, alterations and structural changes which were performed.
6. Defendant Wigfields knew permits were required for portions of the work done at the property and intentionally did not obtain permits.
7. Defendant Wigfields made representations toPage 147plaintiffs that said property, specifically the main residence and apartments were ready for use and that no issues existed with the property.
8. The property was marketed as having two operable income producing rental units.
9. Plaintiffs entered into an agreement of sale to purchase the property on or about August 16, 2010, with settlement to occur before October 9, 2010.
10. At the time of purchase, the rental units were occupied by tenants.
11. Subsequent to plaintiffs’ purchase of the property, an issue arose with tenants prompting inspection of the property by Upper Milford Township zoning officer, Alan Brokate, which revealed that there were numerous violations of the Upper Milford Township’s laws, regulations and ordinances including, but not limited to, the fact that the property was not zoned or approved for multiple rental units and that one of the rental units would need to be eliminated.
12. Plaintiffs filed a request for a variance and were granted their request to allow for two rental units on said property, conditioned upon an inspection to confirm compliance with Upper Milford Township standards for each dwelling unit.
13. Plaintiffs in the course of litigation have entered into settlement agreements with all defendants except the Wigfield defendants.
In addition to the parties’ stipulated findings of fact which this court accepts as findings of fact, this court, upon consideration of the evidence presented at trial, makes the following findings of fact:
Page 14814. Despite being marketed as having two operable income producing rental units, the detached bam, bottom dwelling-unit was unpermitted. See testimony of Alan Brokate; See also notice of violation dated May 25, 2012, Exhibit P-2.
15. In the face of a legal obligation to do so and despite a specific question regarding zoning violations on the property, the Wigfields failed to disclose any zoning violations on the Seller’s Property Disclosure Form, Exhibit P-4.
16. Furthermore, on the same Seller’s Property Disclosure Form, Exhibit P-4, the Wigfields represented that they were unaware of any “material defects” on the property.
17. Edward C. Wigfield served as a former Upper Milford Township Zoning Officer and was familiar with zoning hearing procedures, zoning laws, building laws, and septic system laws. See testimony of Edward C. Wigfield.
18. The Wigfields made the previous representations and nondisclosures despite possessing actual knowledge that the current septic system was unpermitted for three (3) dwelling units and that the detached bam, bottom dwelling unit was unpermitted.
19. At the time the Wigfields made the aforementioned disclosures, they acted with the intent to conceal material defects with the property which would have adversely affected the property’s value and to mislead the plaintiffs into relying on said false disclosures.
20. The plaintiffs justifiably relied on said disclosures to their detriment.
Page 14921. The Upper Milford Township Zoning Hearing Board granted the plaintiffs a zoning variance for the bottom dwelling unit on the express condition that the septic system on the property be certified as adequate and up to current state and township standards. See “Shannon Floyd Zoning Appeal” dated August 13, 2012, Exhibit P-7.
22. The Wigfields performed unpermitted work on the property’s septic system.
23. The septic system on the property is noncompliant for three dwelling units.
24. Installing a new, compliant, septic system on the property appropriate for three dwelling units would cost roughly $40,000.00. See testimony of Paul Golrilc.
II. CONCLUSIONS OF LAW
The court makes the following conclusions of law concerning Counts I-VI and X-XI contained in the Plaintiffs’ Complaint against the Wigifields:
A. COUNTS I-III & XI — INTENTIONAL MISREPRESENTATION, NEGLIGENT MISREPRESENTATION, INNOCENT MISREPRESENTATION, AND FRAUDULENT NONDISCLOSURE
Generally, a misrepresentation may be actionable pursuant to three theories: intentional misrepresentation, negligent misrepresentation, and innocent misrepresentation. Bortz v. Noon, 729 A.2d 555, 560 (Pa. 1999). Similar to a claim for intentional misrepresentation, a separate claim also lies for intentional nondisclosure where the offending party intentionally conceals a material fact to a transaction rather than making an affirmative misrepresentation. Bortz, 729 A.2d at 560, citing Gibbs,
i. Count I — Intentional Misrepresentation
The court in Bortz listed the elements of intentional representation as follows:
(1) A representation;
(2) which is material to the transaction at hand;
(3) made falsely, with knowledge of its falsity or recklessness as to whether it is true or false;
(4) with the intent of misleading another into relying on it;
(5) justifiable reliance on the misrepresentation; and,
(6) the resulting injury was proximately caused by the reliance.
Id. at 560, citing Gibbs, 647 A.2d 882, 889 (Pa. 1994), citing Restatement (Second) of Torts § 525 (1977).
For purposes of applying the foregoing to the facts of this case, this court observes, and as stipulated by the parties, that the property was marketed as having two operable, income-producing apartments, that the Wigfields
Here, the Wigfields marketed their property as having two operable, income-producing apartments. They allowed their home to be advertised in this manner with the full knowledge that one of the apartments was never permitted and that the septic system on the property was never permitted to accommodate the apartments. The Wigfields were aware that revealing these facts would adversely impact the value of their property. Furthermore, the Wigfields specifically represented on the Seller Disclosure Form, Exhibit P-4, that the property was free of “material defects.” Based on these facts, this court concludes that the representation made by the Wigfields on the Seller’s Property Disclosure Form, Exhibit P-4, that the property was free of “material defects” was material to the transaction and made by the Wigfields falsely, with knowledge of its falsity, and with the intent to mislead the plaintiffs into relying on it.
Moreover, the Wigfields ’ argument that the septic system
Whether or not the Wigfields intended to harm the plaintiffs is not the question in this case. Rather, the question is whether the Wigfields knowingly made false representations with the intent of deceiving the plaintiffs. This court concludes that they did. Finally, this court concludes that the plaintiffs ’ reliance on the representations made by the Wigfields was justified and the injury, suffered by plaintiffs, namely the expense required to bring the property into compliance, was proximately caused by this justified reliance.
ii. Count II — Negligent Misrepresentation
The court in Bortz also reviewed the elements of negligent misrepresentation as follows:
(1) A misrepresentation of a material fact;
(2) made under circumstances in which the misrepresenter ought to have known its falsity;
(3)with an intent to induce another to act on it; and
Page 153(4) which results in injury to a party acting in justifiable reliance on the misrepresentation.
Bortz, at 561. The Pennsylvania Supreme Court went on to describe the difference between the tort of negligent misrepresentation from the tort of intentional misrepresentation as follows, “The elements of negligent misrepresentation differ from intentional misrepresentation in that the misrepresentation must concern a material fact and the speaker need not know his or her words are untrue, but must have failed to make a reasonable investigation of the truth of these words.” Id.
Despite this court’s conclusion that the Wigfields’ conduct rose to the level of an intentional misrepresentation, this court also concludes that the Wigfields’ conduct was negligent. As previously stated, the Wigfields misrepresented that the property contained a compliant septic system and that the property was zoned for two income-producing apartments. The Wigfields misrepresented these facts by stating on the Seller’s Property Disclosure Form, Exhibit P-4, that the property contained no “material defects.” This court concludes that the Wigfields’ decision to make this statement in the face of their actual knowledge of the facts was unreasonable. For the foregoing and the conclusions already made above regarding intentional misrepresentation, this court concludes that the Wigfields’ representations were also negligent.
iii. Count III — Innocent Misrepresentation
Next, a claim for innocent misrepresentation, to the extent recognized in this Commonwealth, is an equitable doctrine based upon contract principles supporting equitable rescission to make a contract voidable by the innocent party, where appropriate. Bortz, at 564. The
iv. Count XI — Intentional Nondisclosure
In addition to the misrepresentation claims, the plaintiffs seek recovery for the claim of intentional nondisclosure. The tort of intentional nondisclosure maintains the same elements as intentional misrepresentation, except that, in the case of intentional nondisclosure, the offending party intentionally conceals a material fact rather than making an affirmative misrepresentation. Bortz, 729 A.2d at 560, citing Gibbs, 647 A.2d at 889; Ortho-McNeil-Janssen Pharms., Inc., 52 A.3d 498, citing Bortz. In this case, the Wigfields failed to respond to the question, “Are you aware of...any violations of zoning...?” contained at 19(d) of the Seller’s Property Disclosure Form, Exhibit P-4. Based on the Wigfields actual knowledge that the second apartment was not properly zoned, this court concludes that the Wigfields intentionally failed to disclose this fact at 19(d) for the express purpose of concealing it from the plaintiffs. For the foregoing and the conclusions already made above regarding the plaintiffs’ claim for intentional misrepresentation, this court concludes that the Wigfields’ nondisclosure was intentional in this case.
B. COUNT IV — BREACH OF CONTRACT
Additionally, the plaintiffs’ complaint also seek damages for breach of contract. In their complaint, the plaintiffs allege that the Wigfields breached the “duty of good faith and fair dealing” by making the aforementioned misrepresentations. In Pennsylvania, every contract imposes a duty of good faith and fair dealing. Southeastern
C. COUNT V — VIOLATION OF PENNSYLVANIA’S RESDL
Furthermore, the plaintiffs allege violations of the Pennsylvania Real Estate Seller Disclosure Law 68 Pa.C.S.A. § 7301 (“RESDL”). The RESDL places the following affirmative duty on sellers, “In completing the property disclosure statement, the seller shall not make any representations that the seller or the agent for the seller knows or has reason to know are false, deceptive or misleading and shall not fail to disclose a known material defect.” 68 Pa.C.S.A. § 7308. Furthermore, “any person who willfully or negligently violates or fails to perform any duty prescribed by any provision of this chapter shall be liable in the amount of actual damages suffered by the buyer as a result of a violation of this chapter....” 68 Pa.C.S.A. § 7311. In this instance, the Wigfields represented, on the Seller’s Property Disclosure Form,
D. COUNT VI — UNJUST ENRICHMENT
In the event of a rescission, the plaintiffs’ complaint also makes an unjust enrichment claim. However, as already discussed above regarding the claim for innocent misrepresentation, this court concludes that rescission is an inappropriate remedy in this case. Moreover, “it has long been held in this Commonwealth that the doctrine of unjust enrichment is inapplicable when the relationship between parties is founded upon a written agreement or express contract...” Wilson Area School Dist. v. Skepton, 895 A.2d 1250, 1254 (Pa. 2006). Here, the plaintiffs and Wigfields maintain such an express agreement and this court declines to rescind that express agreement. Therefore, the doctrine of unjust enrichment does not apply in this case.
E. COUNT X — VIOLATION OF UNFAIR TRADE PRACTICES AND CONSUMER PROTECTION LAW
Finally, the plaintiffs make a claim for violations of the Unfair Trade Practices And Consumer Protection Law, 73 P.S. § 201-1 etseq. (“UTPCPL”) and seek damages, treble damages, and attorneys fees under the statute. Under the UTPCPL, an individual who purchases goods, including real estate, may bring a private action to recover damages caused by another’s “act or practice declared unlawful” by the UTPCPL. 73 P.S. 201-9.2; Skurnowicz v. Lucci, 798
F. DAMAGES
In this case, the plaintiffs seek actual damages, consequential damages, treble damages under the UTPCPL, and attorney fees and costs under the UTPCPL. The plaintiffs seek damages in an amount sufficient to cover the expense to install a compliant septic system, which would allow the plaintiffs to be granted a zoning variance for the second apartment from the Township. See “Shannon Floyd Zoning Appeal,”at 9, Exhibit P-7 (“Therefore[,] it is the decision of the Zoning Hearing Board of Upper Milford Township...to grant the requested variance...on the express condition that the septic systems on the premises be certified as adequate and up to current state and township standards...”). At trial, the plaintiffs’ expert testified that installation of a compliant septic system would cost approximately $40,000.00. Therefore, this court awards damages to the plaintiffs in the amount of $40,000.00.
In addition to actual and consequential damages, this court must consider the plaintiffs’ claims for treble damages and
III. CONCLUSION
Pursuant to the findings of fact and conclusions of law set forth above, the court finds that defendants, Edward C. Wigfield and Carol A. Wigfield, are liable to the plaintiffs, Shannon Floyd, Norman D’Avanzo, and Ruth D’Avanzo, in the amount of $40,000.00 in damages and $20,126.18
ORDER
And now, this of October, 2014, upon consideration of plaintiffs, Shannon Floyd, Norman D’Avanzo, and Ruth D’Avanzo’s, complaint filed onApril 2,2013, answer, new matter and cross-claim on behalf of defendants Edward C. Wigfield And Carol A. Wigfield filed on May 16, 2013, defendant Northampton County Regional Realty, LLC d/b/a Keller Williams real estate’s new matter and new matter cross-claims filed on May 7, 2013, defendant’s, Krause Home Inspection Service, Inc. Answer to plaintiffs’ complaint with new matter and cross claims filed on July 17,2013, answer, new matter and crossclaims of defendant, prudential patt, white real estate-macungie, to plaintiffs’ complaint filed on August 8,2013, after non-jury trial held September 8, 2014, and for the reasons set forth in the accompanying opinion;
It is hereby ordered that verdict is entered in favor of plaintiffs, Shannon Floyd, Norman D’Avanzo, and Ruth D’Avanzo, and against defendants, Edward C. Wigfield and Carol A. Wigfield, in the amount of $60,126.18;
And it is further ordered that all said cross-claims filed by defendants, Edward C. Wigfield, Carol A. Wigfield, Northampton County Regional Realty, LLC d/b/a Keller Williams Real Estate, Krause Home Inspection Service, Inc., and Prudential Patt-White Real Estate-Macungie, are hereby dismissed with prejudice.1
1.
At trial, no evidence was presented by any of the defendants in furtherance of any of their cross-claims.