Blumenstock v. Gibson

• Decision Date: 31 October 2002
• Parties: Charles F. BLUMENSTOCK, Jr., and Anita Henkel Blumenstock, Appellants, v. John G. GIBSON and Annette H. Gibson, Husband and Wife, Jonathan Forrester, and Prudential-Berger, Charles & Associates Real Estate, Inc., Appellees.
• Court: Pennsylvania Superior Court

811 A.2d 1029

Charles F. BLUMENSTOCK, Jr., and Anita Henkel Blumenstock, Appellants, v. John G. GIBSON and Annette H. Gibson, Husband and Wife, Jonathan Forrester, and Prudential-Berger, Charles & Associates Real Estate, Inc., Appellees.

Superior Court of Pennsylvania.

Argued June 18, 2002.

Filed October 31, 2002.

Reargument Denied January 3, 2003.

Charles F. Blumenstock, Lancaster, for appellants.

Paul F. Lantieri, Lancaster, for Gibson, appellee. Christopher S. Underhill, Lancaster, for Forrester, appellee.

BEFORE: DEL SOLE, P.J., HUDOCK and BROSKY, JJ.

OPINION BY HUDOCK, J.:

¶ 1 This is an appeal from an order granting summary judgment in favor of all Appellees and against both Appellants as to all claims. We affirm.

¶ 2 On April 8, 1997, Appellants Charles F. Blumenstock, Jr., and his wife, Anita (Buyers), entered into a written agreement of sale to purchase a house at 244 S. Homestead Drive, Landisville, Pennsylvania, from John and Annette Gibson (Sellers). Buyers were represented in this matter by their agent, C.F. "Red" Blumenstock, a licensed real estate broker and appraiser, and the father of Charles F. Blumenstock, Jr. Buyers' Brief at 7. The property was listed for sale by Jonathan Forrester (Forrester), an independent contractor associated with Prudential-Berger, Charles & Associates Real Estate, Inc. (Prudential-Berger). (Collectively, Sellers, Forrester and Prudential-Berger are termed Appellees; Forrester and Prudential-Berger are designated as Realtors.)

¶ 3 Sellers executed a disclosure statement, which was made a part of the agreement of sale pursuant to an addendum. The agreement of sale also included a property inspection contingency clause, which Buyers exercised. On April 25, 1997, a property inspection was performed by a representative of The Property Examiners, Inc. (Property Examiners), a professional inspection firm. Property Examiners prepared a written report.

¶ 4 Prior to closing, Buyers allegedly indicated their concern over the fact that the property had two sump pumps.¹ They aver that their agent orally requested information concerning the sump pumps from Forrester. See Complaint, 5/29/98, at 2-3 ¶¶ 15-20. Buyers assert that Forrester stated that the duplicative sump pumps were installed "as a precaution" when the basement was improved. Buyers' Brief at 8. Buyers allege they understood this to mean the sump pumps were unnecessary and never ran. Id. Buyers also aver they decided to purchase the property after concluding there was no "water problem." Buyers allege they relied in part on the purported oral information conveyed by Forrester on behalf of Sellers, and also on the written disclosure statement signed by Sellers. Buyers assert they would not have purchased the property had they been informed the sump pumps actually functioned from time to time. Furthermore, they conclude the very fact the sump pumps were installed and were needed indicates that a per se "water problem" existed on the property.

¶ 5 The real estate transaction closed on June 20, 1997, at which time Buyers paid $176,000.00 for the property. After Buyers moved into the new home, they realized the sump pumps did, in fact, run, sometimes intermittently, and sometimes constantly if heavy rains occurred. Buyers aver that on March 25, 1998, a circuit breaker controlling the sump pumps shut off, and the pumps did not run for several hours. (Buyers do not contend that the electric service to their home was interrupted, but only that the circuit breaker controlling the sump pumps shut off for an unexplained reason.) By the time the circuit breaker problem was discovered, the basement of the house allegedly was covered by several inches of water and many items of personal property had been damaged. See Complaint, 5/29/98, at 4-6 ¶¶ 32-35, 48.

¶ 6 Buyers filed a complaint on May 29, 1998, seeking rescission of their purchase and alleging breach of contract, fraud and fraud-based violations of the Unfair Trade Practices and Consumer Protection Law (UTPCPL) and the Real Estate Seller Disclosure Act (RESDA) by the Sellers.² They also sought damages against Realtors for fraud, misrepresentation, negligent misrepresentation, and for fraud-based violations of UTPCPL and RESDA. The matter proceeded through discovery, with various filings by all parties. Sellers and Realtors filed separate motions for summary judgment, which the trial court granted on September 5, 2001. Buyers' timely notice of appeal followed on September 21, 2001.

¶ 7 The trial court did not require Buyers to file a concise statement, and none was filed. Buyers raise four issues: (1) whether the trial court erred in failing to apply the proper legal standard and the proper standard for evaluating a motion for summary judgment, and also in failing to understand certain pertinent facts of the case; (2) whether the real estate broker and the listing agent may avail themselves of the exculpatory clause in the agreement of sale when they were not parties to the agreement; (3) whether Buyers' claims remain actionable despite clauses for release, property inspection and integration in the sales agreement when Sellers and Realtors fraudulently induced Buyers to enter into a sales agreement; and (4) whether Sellers may seek summary judgment predicated on the release and integration clauses of the sale agreement when they did not raise this issue via new matter. See Buyers' Brief at 3 (issues paraphrased for clarity). We shall address these claims seriatim, noting at the outset that we are not limited by the trial court's rationale and that we may affirm on any basis. Thomas Rigging & Construction Company, Inc. v. Contraves, Inc., 798 A.2d 753, 758 (Pa.Super.2002) (citing Shearer v. Naftzinger, 560 Pa. 634, 638, 747 A.2d 859, 861 (2000)).

¶ 8 Our review of the trial court's grant of summary judgment is plenary. Philadelphia Ambulatory Care Center, Inc. v. Rite Aid Corporation, 805 A.2d 613 (Pa.Super.2002).

Summary judgment is proper where the pleadings, depositions, answers to interrogatories, admissions and affidavits and other materials demonstrate that there is no genuine issue of material fact and the moving party is entitled to judgment as a matter of law. We apply the same standard of review as the trial court in that we view the record in the light most favorable to the party opposing the motion and resolve all doubts as to the existence of a genuine issue of material fact in favor of the nonmoving party. We will reverse the trial court's grant of summary judgment only upon an abuse of discretion or error of law.

Id. (quoting Curry v. Huron Insurance Co., 781 A.2d 1255, 1257 (Pa.Super.2001)).

¶ 9 We first address the question of whether the trial judge applied the correct standard for summary judgment. We conclude that he did. The trial court opinion sets forth the relevant rule of civil procedure, along with pertinent case law construing that rule. Trial Court Opinion, 9/5/01, at 4-5. The subsequent factual and legal discussion of the points at issue in the case demonstrates that the trial judge actually applied this standard in ascertaining that summary judgment was proper.

¶ 10 The next question to be resolved is whether the trial court employed the proper legal standards in determining that Buyers were unable to establish a prima facie case under any of their theories of recovery. The fundamental ground for all of Buyers' claims is that they were the victims of alleged fraudulent misrepresentations by Sellers and Forrester. In real estate transactions, fraud arises when a seller knowingly makes a misrepresentation, undertakes a concealment calculated to deceive, or commits non-privileged failure to disclose. Sewak v. Lockhart, 699 A.2d 755, 759 (Pa.Super.1997). "Fraud is a generic term used to describe anything calculated to deceive, whether by single act or combination, or by suppression of truth, or suggestion of what is false, whether it be by direct falsehood or by innuendo, by speech or silence, word of mouth, or look or gesture." Id. (quotation omitted).

¶ 11 To prove fraud, a plaintiff must demonstrate by clear and convincing evidence:

(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. (quoting Gibbs v. Ernst, 538 Pa. 193, 207, 647 A.2d 882, 889 (1994)). Unsupported assertions and conclusory accusations cannot create genuine issues of material fact as to the existence of fraud. Gruenwald v. Advanced Computer Applications, Inc., 730 A.2d 1004, 1014 (Pa.Super.1999). Buyers have not explicitly addressed the six elements that must be proven under the above standard. However, we shall assume, purely for the sake of argument, that they have demonstrated all elements other than justifiable reliance. Establishing this element is necessary to finding that fraud exists. Furthermore, as discussed below, Buyers must establish justifiable reliance before they may introduce evidence that falls outside the confines of the written agreement of sale underlying this appeal.

¶ 12 According to Buyers, the alleged fraudulent misrepresentations asserted in the present case led them to enter into a written agreement with Sellers for the purchase of real estate. In this case, the agreement of sale includes an integration clause which provides as follows:

(A) Buyer understands that any representations, claims, advertising, promotional activities, brochures or plans of any kind made by Seller, Agents or their employees are not a part of this Agreement, unless expressly incorporated or stated in this Agreement.

(B) It is understood that Buyer has inspected the Property (including fixtures and any personal property specifically scheduled herein)...