Strausser v. Pramco, III

• Decision Date: 03 March 2008
• Docket Number: No. 954 Middle District Appeal 2007,954 Middle District Appeal 2007
• Citation: 944 A.2d 761
• Court: Pennsylvania Superior Court
• Parties: David W. STRAUSSER, Appellant v. PRAMCO, III & Manufacturers and Traders Trust Co., t/d/b/a M&T Bank.

944 A.2d 761

David W. STRAUSSER, Appellant v. PRAMCO, III & Manufacturers and Traders Trust Co., t/d/b/a M&T Bank.

No. 954 Middle District Appeal 2007

Superior Court of Pennsylvania.

Submitted November 13, 2007.

Filed March 3, 2008.

Michael Fiorillo, Pottsville, for appellant.

William J. Levant, Blue Bell, for PRAMCO, appellee.

Morton R. Branzburg, Philadelphia, for Manufacturers and Traders, appellee.

BEFORE: FORD ELLIOTT, P.J., HUDOCK and POPOVICH, JJ.

OPINION BY FORD ELLIOTT, P.J.:

¶ 1 Appellant appeals from the order sustaining the preliminary objections of appellee Manufacturers and Traders Trust Company ("M&T"), and dismissing appellant's amended complaint. By a separate prior order dated October 23, 2006, the trial court had earlier also sustained the preliminary objections of PRAMCO III, LLC ("PRAMCO") and dismissed the complaint as to that entity. On appeal, appellant raises several issues of trial court error as to both appellees. Finding no error, we affirm.

¶ 2 On November 21, 1997, appellant entered into a loan agreement with Pennsylvania National Bank and Trust Company, the predecessor-in-interest to both appellees. The loan was secured by a mortgage for property located at 429-431 E. Market Street, Pottsville, and by a 1997 Chevrolet Conversion Van. On March 23, 1998, appellant entered into a second loan agreement with Pennsylvania National Bank and Trust Company, securing this agreement with a mortgage on property located at 427 E. Market Street, Pottsville. On October 7, 2000, M&T became the successor-in-interest to Pennsylvania National Bank and Trust Company.

¶ 3 By January 6, 2003, appellant had fallen behind on his payments on both loans. On that date, appellant was in an automobile accident in which he destroyed the vehicle which was partial collateral for the 429-431 E. Market Street loan. The insurer of the vehicle issued a check to M&T. Appellant claims that M&T at first agreed to hold the check pending appellant's contesting the value with the insurer; but on January 5, 2004, M&T notified appellant that it had cashed the check and applied the proceeds to both mortgages. Thereafter, appellant retained counsel and began to negotiate with M&T to either refinance the 429-431 E. Market Street loan, or find a new lender.

¶ 4 In December 2004, appellant attempted to sell the 427 E. Market Street property. According to appellant, M&T informed the title company that there was a cross-collateralization agreement as to the two loans and that it would not release its lien on 427 E. Market Street without full satisfaction of the 429-431 E. Market Street mortgage. Although appellant claims that no such cross-collateralization agreement in fact existed, the parties eventually agreed that appellant would pay $1,000 toward the 429-431 E. Market Street loan and M&T would allow the sale of the 427 E. Market Street property to go forward. The sale occurred in January 2005, and the 427 E. Market Street mortgage was satisfied.

¶ 5 Appellant claims that at a meeting on February 5, 2005, the parties reached an agreement whereby appellant would begin making payments of $300 per month which would be applied against the principal of the remaining loan and that the loan would be refinanced. In the next several months, appellant made monthly payments of $300 to M&T. In October 2005, appellant received a statement from M&T that indicated that his $300 payments were no longer being credited to the principal and that his account was instead accruing interest and late fees.

¶ 6 On October 27, 2005, M&T sold appellant's loan to PRAMCO. On May 11, 2006, PRAMCO instituted a mortgage foreclosure action against the 429-431 E. Market Street property. On August 1, 2006, appellant responded by filing an answer, new matter, and counterclaim asserting various causes of action including breach of contract, negligence, and fraud and misrepresentation against M&T and PRAMCO. In response to preliminary objections by M&T and PRAMCO, which indicated that appellant's in personam claims were inappropriate under an in rem foreclosure action, appellant filed a similar, but separate, complaint at the instant trial court docket number.

¶ 7 On September 13, 2006, PRAMCO filed preliminary objections in the nature of a demurrer, alleging, inter alia, that because the complaint, which contained an underlying claim that the parties had an agreement to forbear on foreclosure, failed to allege the existence of a written agreement, the Statute of Frauds would prevent proof of the matter and would thereby bar any recovery. On October 23, 2006, the court sustained PRAMCO's preliminary objections and dismissed the complaint as to PRAMCO.

¶ 8 On October 30, 2006, M&T also filed preliminary objections in the nature of a demurrer which raised the same Statute of Frauds claim. The court directed appellant to file a more specific complaint and attach a document confirming the existence of a written forbearance agreement. Appellant thereafter filed an amended complaint; and on January 29, 2007, M&T renewed their preliminary objections, again asserting the lack of a written forbearance agreement. On May 10, 2007, the trial court sustained the preliminary objections and dismissed the amended complaint. Appellant now appeals.

¶ 9 On appeal, appellant argues that the trial court erred in sustaining the preliminary objections of both appellees because there exists a genuine issue of fact whether the parties entered into an agreement to forbear on foreclosure. Appellant maintains that documents attached to the amended complaint evidence such an agreement. Appellant further contends that the Statute of Frauds is inapplicable on theories of part performance and/or equitable or promissory estoppel. Finally, appellant asserts that the trial court erred in dismissing his fraud and misrepresentation claims on the basis of the "Gist of the Action Doctrine."

¶ 10 Preliminarily, we must dispose of a motion to quash appellant's appeal, as to PRAMCO, presented by PRAMCO in its appellate brief. PRAMCO previously raised this matter in an application to quash, filed July 23, 2007, which was denied without prejudice to raise the matter before the merits panel. Citing General Electric Credit Corp. v. Aetna Casualty & Surety Co., 437 Pa. 463, 263 A.2d 448 (1970), PRAMCO contends that appellant cannot assail the trial court's ruling in its favor in the appeal taken from the May 10, 2007 order sustaining M&T's preliminary objections. Essentially, General Electric stands for the principle that taking one appeal from separate judgments is not acceptable practice and is discouraged. PRAMCO maintains that under General Electric, although appellant could not do so until May 10, 2007, appellant at that time still had to file a separate notice of appeal from the order of October 23, 2006, which sustained PRAMCO's preliminary objections, in order to appeal any issues arising from that adjudication. We disagree.

¶ 11 This court later distinguished General Electric in Baker v. Cambridge Chase, Inc., 725 A.2d 757 (Pa.Super.1999), appeal denied, 560 Pa. 716, 745 A.2d 1216 (1999). Baker found that the general principle of General Electric did not apply in a situation where multiple defendants in a single action, who were all original defendants, were removed from the case in piecemeal fashion by separate preliminary objections. Rather, in such a situation, each separate judgment becomes appealable when the suit is resolved against the final defendant¹ and may be commenced as to all defendants by a single notice of appeal taken from the order resolving the final claim against the final defendant. As that situation obtains here, we find that the present appeal is proper as to PRAMCO and will not be quashed as to that appellee.

¶ 12 We begin our analysis with our well-settled standard of review:

A preliminary objection in the nature of a demurrer is properly granted where the contested pleading is legally insufficient. Preliminary objections in the nature of a demurrer require the court to resolve the issues solely on the basis of the pleadings; no testimony or other evidence outside of the complaint may be considered to dispose of the legal issues presented by the demurrer. All material facts set forth in the pleading and all inferences reasonably deducible therefrom must be admitted as true. In determining whether the trial court properly sustained preliminary objections, the appellate court must examine the averments in the complaint, together with the documents and exhibits attached thereto, in order to evaluate the sufficiency of the facts averred. The impetus of our inquiry is to determine the legal sufficiency of the complaint and whether the pleading would permit recovery if ultimately proven. This Court will reverse the trial court's decision regarding preliminary objections only where there has been an error of law or abuse of discretion. When sustaining the trial court's ruling will result in the denial of claim or a dismissal of suit, preliminary objections will be sustained only where the case if [sic] free and clear of doubt.

Excavation Technologies, Inc. v. Columbia Gas Company of Pennsylvania, 936 A.2d 111, 113 (Pa.Super.2007).

¶ 13 An agreement to forbear from foreclosure, between mortgagor and mortgagee, has been held to represent an interest in land such that the agreement is subject to the Statute of Frauds and must be in writing. Atlantic Financial Federal v. Orianna Historic Associates, 406 Pa.Super. 316, 594 A.2d 356 (1991).² In his first argument on appeal, appellant asserts that the Statute of Frauds may be satisfied in this case by something other than a direct written agreement; that is, other written documents that evidence the existence of such an agreement. To this end, appellant attached several documents to his amended complaint that he claims evidence the existence of an agreement to forbear foreclosure.

¶ 14 We agree with appellant...