Baker v. Cambridge Chase, Inc.

Decision Date14 January 1999
Citation725 A.2d 757,1999 PA Super 9
PartiesWilliam and Bettye F. BAKER, Appellants, v. CAMBRIDGE CHASE, INC., Pine Hill Quality Custom Home, Inc., John C. Shelton, Jr., Linda P. Boardman, Metzel Corporation; Continental Bank, Mid-Lantic National Bank, Commonwealth Land Title Insurance Co., and Weichert Realtors, Appellees.
CourtPennsylvania Superior Court

William J. Wheeler, Jr., Philadelphia, for appellants.

Thomas A. Fosnocht, Jr., West Chester, for Cambridge Chase, Inc., Pine Hill Qualtiy Custom Home, Inc., Shelton and Boardman, appellees.

Kevin H. Buraks, Blue Bell, for Metzel Corp., Continental Bank and Midlantic National Bank, appellees.

Gerald F. McCormick, Wayne, for Commonwealth Land Title, appellee.

Timothy L. Jones, Kennett Square, for Weichart Realtors, appellee. Before JOHNSON and MONTEMURO1, JJ., and CIRILLO, President Judge Emeritus.

CIRILLO, President Judge Emeritus:

¶ 1 Mr. and Dr. Baker, plaintiffs below, appeal several pre-trial orders, some of which sustained preliminary objections to their amended complaint as to some defendants below, and some of which granted summary judgment as to the remaining defendants. We reverse and remand for trial against all defendants.

¶ 2 This case involves a fraudulent residential real estate transaction. All parties2 agree on the following facts, with any relevant exceptions noted. An officer and/or officers of a Chester County real estate development corporation known as Cambridge Chase ("Cambridge") signed a construction agreement of sale for, and later delivered and recorded a deed erroneously purporting to convey title to an almost completed townhouse, Unit 202 at Cambridge Chase (also the name of the development Cambridge was developing), to the Bakers. The agreement of sale called for a special warranty deed, and the deed purported to be a special warranty deed.

¶ 3 At the time the deed was signed over to the buyers on behalf of Cambridge, Cambridge was not the owner of the property. This was due to the fact that either just before or just after signing the agreement of sale to the Bakers, Cambridge had signed a deed in lieu of foreclosure conveying the townhouse to Metzel Corporation.3 The closing on the conveyance from Cambridge to the Bakers, which was conducted by Commonwealth, did not occur until after Cambridge had already deeded the townhouse to Metzel in a closing also conducted by Commonwealth. The Bakers' closing was held ten days after the deed from Cambridge to Metzel was recorded. At the Bakers' closing, Commonwealth indicated its title search showed the property belonged to Cambridge. Commonwealth insured the title on the Bakers' behalf. ¶ 4 The real estate agent representing the purported seller, Cambridge, and who had shown the property to the Bakers, was the mother of defendant Boardman, a Vice-President of Cambridge. At the time of the transaction, the Bakers were aware of this relationship.

¶ 5 Metzel had accepted the deed to Unit 202 in lieu of Continental's foreclosing on Cambridge's mortgage, which it appears had been unpaid and possibly in default for some time. At the time Cambridge signed the deed to the Bakers, Metzel and Continental knew that it was doing so. It appears these entities authorized Cambridge to sign on Metzel's behalf.

¶ 6 Despite being the owner, Metzel did not sign the deed to the Bakers. Likewise, Cambridge did not indicate to the Bakers that it did not own the property. The Bakers were under the reasonable but mistaken impression that the property was owned by Cambridge and that Cambridge had properly conveyed it to them.

¶ 7 Approximately a year after agreeing to buy the property, and well after they had moved into the townhouse, in the course of exploring the possibility of a lawsuit due to unfinished work on their home,4 the Bakers learned their deed was ineffective. In March of 1994, immediately after learning of this problem, they contacted their title insurance company, Commonwealth. Commonwealth then obtained for the Bakers a quit-claim deed from Metzel, dated May 17, 1994, which was recorded on June 29, 1994.

¶ 8 In July of 1994, the Bakers instituted the present action against the nine defendants, stating various theories of liability against different combinations of the defendants. Approximately three years later, or approximately four years after the agreement of sale, Commonwealth obtained and duly recorded a special warranty deed from Metzel to the Bakers.

¶ 9 One reason that all original defendants were ultimately dismissed in the case, either by summary judgment or preliminary objections, appears to have been that the court believed damages were not pleaded properly. It is true that the circumstances do not, at least facially, support a claim of damages. The buyers continue to live in the townhouse they now own, and both a quitclaim deed and a special warranty deed passing title from Metzel to the Bakers have been recorded, albeit only well after the Bakers instituted the present action.5 It appears to us that the buyers are requesting rescission of the "sale" or transaction in which they paid money to one party and received a deed four years later (and after this litigation had existed for some time) from a different party. They also appear to request restitution (both in equity and under their title insurance contract) for their attorney's fees and expenses during the approximately four years it has taken for them to obtain their good and marketable title, together with all associated expenses. Additionally, they request various damages, including punitive damages, delay damages, and interest.

¶ 10 In reviewing the propriety of the orders before us, we have the benefit not only of a brief opinion prepared for us by one of the judges involved in the case, the Honorable Paula Francisco Ott of the Chester County Court of Common Pleas, but also of brief statements included in some of the orders, explaining upon what grounds they were handed down.6 On May 21, 1998, Judge Ott granted summary judgment on the motion of the Cambridge defendants, the only remaining defendants at that time. In doing so, Judge Ott acknowledged there were two remaining counts against the Cambridge defendants. On June 1, 1998, counsel for the Bakers filed with the Prothonotary an "Order to Settle, Discontinue, and End" the remaining two claims. It was this administrative filing that finally disposed of all claims and/or parties. Two days later, the Bakers filed this appeal.

¶ 11 Appellants, the Bakers, present the following issues for our review:

(1) Did the trial court ("Court") err, in a real estate transaction involving fraud, in granting preliminary objections where a Quit Claim deed was used to cure a title defect and where plaintiffs had bargained for a FEE SIMPLE DEED OF SPECIAL WARRANTY?
(2) Did [the] Court err in granting Summary Judgment Motions where there were genuine issues of material fact in dispute?
(3) Whether Plaintiffs are entitled to Rescission and Restitution where fraud is involved in the real estate transaction?
(4) Did the Court err in denying plaintiffs' contractual rights to recover their out of pocket costs as damages for obtaining the Quit Claim and Warranty deeds?
(5) Did the Court err in denying the Petition for Reconsideration?
(6) Whether the Quit Claim and Warranty deeds are invalid due to fraud?
(7) Did the Court err when it concluded that there were no damages where there was evidence of damages apart from "rescission and restitution"?
(8) Did the Court err in its determination that plaintiffs' title has been continuously insured in fee simple and that there was not a threat to the title?
(9) Did the Court err in its determination that "rescission" was not pleaded?
(10) Did the Court err in its opinion that plaintiffs have not timely appealed previous judges['] orders and that the Notice of Appeal stated "only" the May 21, 1998 order was being appealed and "not the prior orders"?

¶ 12 Before we may proceed further, we must clarify exactly who and what is before us, disposing of the Bakers' last issue first. We must determine whether the notice of appeal was filed from Judge Ott's order granting partial summary judgment, and/or from three prior orders of two different judges, and/or from plaintiff's "Order to Settle, Discontinue, and End." The three prior orders effectively terminated the litigation as to the various defendants in whose favor they ruled. Judge Ott and several defendants/appellees conclude for several reasons that the Bakers have not appealed these prior orders, but only Judge Ott's partial summary judgment order. If this is true, they claim, only the Cambridge defendants are before us, and the others are no longer parties to this matter.

¶ 13 The first reason offered for this conclusion is that the time period for appealing the prior orders had expired by the time the Bakers filed this appeal. We disagree. Pennsylvania Rule of Appellate Procedure 341 states that an appeal may be taken from a final order. The rule defines a "final order" as "any order that: (1) disposes of all claims and of all parties; or (2) any order that is expressly defined as a final order by statute; or (3) any order entered as a final order pursuant to subdivision (c) of this rule." Pa.R.A.P. 341(a), 42 Pa.C.S. Subdivision (c) allows the court to designate an order as final even when it does not dispose of all claims and/or parties. It also contains the following caveat: "In the absence of such a determination and entry of a final order, any order or other form of decision that adjudicates fewer than all the claims and parties shall not constitute a final order." Pa.R.A.P. 341(c) (emphasis added). Rule 341 applies to this case. See Zikria v. Ass'n of T. & C. Surgeons, 432 Pa.Super. 248, 637 A.2d 1367 (1994)

(amended Rule 341 applies to orders entered in matters commenced after July 6, 1992, and to...

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