Bhatla v. U.S. Capital Corp.
| Citation | 990 F.2d 780 |
| Decision Date | 12 April 1993 |
| Docket Number | No. 7,No. 11,No. 1,PASQUALIS-POLITI and M,Nos. 92-3417,92-3555,7,11,1,s. 92-3417 |
| Parties | Monmohan BHATLA; Shabnam Bhatla; Larry Ayrers; Anthony Read; John E. Barden; Elizabeth Ann Barden; James Sourwine; Annette Sourwine; Frank Binder; Edward Collier; Jeanne Collier; Joseph Curcio; Mary Curcio; John A. Maxin; Patricia Maxin; Frances Maxin; Judith Maxin; Samuel H. Depew, Marilyn Depew (d/b/a Depew Investment Group); Glenn Dolfi; Martha F. Dolfi; John Driscoll and Eileen M. Driscoll; Ronald Elin; Susan M. Elin; Jack Farls (d/b/a J. Foster Associates); George Fenzl; Roxana Fenzl; Gregg Fogg; James P. Grinham; Keith R. Holbrook; and Richard W. Oliver (d/b/a Quadco); William Fox and Myra Fox; Harvey Gutman; Beverly Gutman; Martin Karasick; Joan Karasick; Martin Gang; Judith Gang; Mark Hayden; Greg Hayden; Mike D'Avanzo; Randy Vilford; Joseph Hanzel; Judy M. Bedell; Frank Hryshko; Michael Hettleman; Barbara Hettleman; Thomas L. Hoivik; Judith Lisa Hoivik; Edward Lewis; Sally Lewis; Donald Peterson; Rebecca Peterson; Marcelo Politi; Mariana Politi; Raul Truffat; Soffia Truffat; Dennis Richardson; Virginia Richardson; Ferdinand C. Rodriguez; Maelecora Rodriguez; Victor C. Rivera; Milagros G. Rivera; Gordon Seccombe; Joan Seccombe; Raymond Smith; Joy Mottel; Donald Swenson; Elizabeth Swenson; Michael Ternisky; Jerry Totten; Ellen Totten; William Walker, Appellants v. U.S. CAPITAL CORPORATION; Resort Development Corporation (a/k/a Resort Investment Corporation); Capital Acceptance Corporation; First Capital Finance Corporation; U.S. Capital Mortgage Corporation; Mellon Financial Services Corporation(formerly Carruth Mortgage Corporation); Mellon Financial Services Corporation; Mellon Financial Services Corporation(d/b/a Mellon National Mortgage Group and National Mortgage Group); Mellon Bank N.A.; Billy J. Bobo; Donald J. Tomlin; Patrick L. Tomlin; Robert E. Sease; Richard W. Payton and Jeffrey B. Wheeler. MELLON BANK, N.A. v. Marceloariana Pasqualis-Politi, Appellants. MELLON BANK, N.A. v. John BARDEN and Elizabeth A. Barden and James Sourwine and Annette Sourwi |
| Court | United States Courts of Appeals. United States Court of Appeals (3rd Circuit) |
Donald F. Mintmire (argued), Vaness M. Moore, Mintmire, Alagia, Day, Trautwein & Smith, Palm Beach, FL, for appellants.
Ira S. Lefton (argued), Henry F. Reichner, Reed Smith Shaw & McClay, Philadelphia, PA, for Mellon Bank, N.A.
Eric Breslin (argued), Hannoch Weisman, A Professional Corp., Roseland, NJ, for appellees Billy J. Bobo, Donald J. Tomlin, Patrick L. Tomlin, Robert E. Sease, Richard W. Payton, and Jeffrey B. Wheeler.
Before BECKER and GREENBERG, Circuit Judges, and ROBINSON, District Judge. *
These cases, consolidated on appeal, arise in the aftermath of purchases of condominium units in Phase I of a development known as the Blue Knob Ski and Country Club in Bedford County, Pennsylvania (Development). 1 Some of the purchasers of these units contend, inter alia, that they were fraudulently induced into buying these units based on misrepresentations made to them by sales persons of Resort Investment Corporation (now In the first case, Bhatla v. Resort Development Corp., No. 92-3417 (Bhatla), the purchasers sued Resort, Mellon, and certain other entities and individuals we describe below for losses suffered as a result of the alleged fraud. In the second case, Mellon Bank, N.A. v. Pasqualis-Politi, No. 92-3555 (Mellon Bank), Mellon sued some of the purchasers, seeking judgments on the notes and foreclosures on the mortgages used to finance their purchases of the condominium units. We have consolidated the cases on appeal because they involve related factual and legal issues.
known as Resort Development Corporation). These purchasers appeal from judgments and orders in two separate district court cases, both of which involved Mellon Bank. While there were other purchasers in the Development not involved in this litigation, as a matter of convenience we will refer to the appellants as the purchasers. 2 Mellon has a twofold involvement in these disputes. First, pursuant to a Commitment Letter of August 12, 1982, in which it agreed to lend Resort slightly over $3 million, it made loans for use in the acquisition of the land and the construction of part of the Development. Second, Mellon became the indenture trustee for bonds secured at least in part by the notes and mortgages used to purchase the Phase I condominium units
In the early 1980s, Resort sought to build a condominium development on a 32-acre parcel of land in the Allegheny Mountains of Western Pennsylvania. The initial Public Offering Statement, dated November 25, 1981, stated that the Development would be built in four phases. Phase I was to consist of 96 units, 72 two-bedroom units and 24 one-bedroom units. Phase II was to consist of 54 two-bedroom units. The make-up of the other two phases is not relevant to these appeals. The purchasers all acquired units in Phase I.
According to the purchasers, in marketing the Development, Resort's sales persons made several material misrepresentations, the principal ones being (1) that Phase II would be built even though the initial Public Offering Statement stated that Phase II "Need Not Be Built" and (2) that the developer had arranged for a major hotel chain to handle the rentals of the units. Furthermore, Resort's sales persons allegedly told prospective purchasers that each phase of the development would be marketed at higher prices than the earlier phases, thereby enhancing the investment value to Phase I purchasers by enabling them to get in on the ground floor.
Because sales in Phase I were slower than expected, construction did not begin until the summer of 1982, when enough purchase agreements were signed to trigger the financing provision in the Mellon loan. This delay led to the division of Phase I into Phase IA and Phase IB, which was accomplished by an amendment, dated November 16, 1982, to the Public Offering Statement. Significantly, from the purchasers' point of view, the amended statement made no mention of any change in plans for Phase II, though it continued to indicate that Phase II "Need Not Be Built." The amended statement, which was mailed to prospective purchasers, stated that they had 15 days from its receipt to cancel their purchase agreements. The purchasers settled on their purchases between December 4, 1982, and February 15, 1983.
According to the purchasers, prior to the mailing of the amended public offering statement, Resort knew that Phase II as described in the initial public offering statement would not be built. The purchasers assert that Resort had decided instead to build 72 efficiency-style units to be known as the Blue Knob Ski and Country Club Resort Conference Centre. The construction of these lower-priced units allegedly eroded the value of the Phase I units. The purchasers maintain that had they known about this change in plans for Phase II,
they would have exercised their rights to cancel their purchase agreements.
In December 1986, the purchasers sued: (1) U.S. Capital Corporation, Resort (a subsidiary of U.S. Capital), and three other subsidiaries of U.S. Capital, Capital Acceptance Corporation, U.S. Capital Mortgage Corporation, and First Capital Finance Corporation (together called herein U.S. Capital Corporate Defendants); (2) Mellon Bank and several of its subsidiaries (Mellon Defendants); and (3) several persons who worked for U.S. Capital and/or one of its subsidiaries (U.S. Capital Individual Defendants). The purchasers sought to recover damages for losses that resulted from their purchases of the condominium units. They filed an amended complaint on January 13, 1987, and a second amended complaint on August 20, 1987. The second amended complaint sought relief on four counts: violations of RICO, common law fraud and conspiracy, breach of contract, and rescission of contracts.
The defendants filed motions to dismiss. In resolving these motions the district court considered matters outside the pleadings, thus converting them into motions for summary judgments pursuant to Fed.R.Civ.P. 12(b). On August 3, 1989, the district court partially granted these motions. In particular, the court granted summary judgment to the defendants on all claims except the breach of contract claim against Resort and the 18 U.S.C. § 1962(c) and (d) RICO claims against the U.S. Capital Corporate and Individual Defendants....
To continue reading
Request your trial
-
Erie County Retirees Ass'n v. Erie County
...See Nyhuis v. Reno, 204 F.3d 65, 68 n.2 (3d Cir. 2000); West v. Macht, 197 F.3d 1185, 1187-90 (7th Cir. 1999); Bhatla v. U.S. Capital Corp., 990 F.2d 780, 786 (3d Cir. 1993). Accordingly, we requested the parties to submit memoranda with respect to our jurisdiction. The appellants responded......
-
Tig Ins. Co. v. Tyco Int'l Ltd.
...or admissions on file.’ ” GFL Advantage Fund, Ltd. v. Colkitt, 272 F.3d 189, 199 (3d Cir.2001) (quoting Bhatla v. U.S. Capital Corp., 990 F.2d 780, 787 (3d Cir.1993)); see also Tilden Fin. Corp. v. Palo Tire Serv., Inc., 596 F.2d 604, 608 (3d Cir.1979). “To prevail on a motion for summary j......
-
Booth v. Churner, s. 97-7487
...To be appealable under 28 U.S.C. S 1291, an order of dismissal must ordinarily be with prejudice. See, e.g. , Bahtla v. U.S. Capital Corp., 990 F.2d 780 (3d Cir. 1993). In Garber v. Lego, 11 F.3d 1197, 1198 n.1 (3d Cir. 1993), we recognized an exception to that general rule. We noted that a......
-
Weber v. Ge Group Life Assur. Co.
...own, the court may at any time, on just terms, add or drop a party." Fed.R.Civ.P. 21 (emphasis added); see also Bhatla v. U.S. Capital Corp., 990 F.2d 780, 786 (3d Cir.1993) (dismissing, sua sponte, "action against the nondiverse, dispensable parties so that [the rest of the appeal] otherwi......