Tom Morello Const. Co., Inc. v. Bridgeport Federal Sav. & Loan Ass'n

• Decision Date: 31 December 1980
• Citation: 280 Pa.Super. 329,421 A.2d 747
• Parties: TOM MORELLO CONSTRUCTION COMPANY, INC., Appellant, v. BRIDGEPORT FEDERAL SAVINGS & LOAN ASSOCIATION and David W. Foulke.
• Court: Pennsylvania Superior Court

Page 747

421 A.2d 747

280 Pa.Super. 329

TOM MORELLO CONSTRUCTION COMPANY, INC., Appellant, v. BRIDGEPORT FEDERAL SAVINGS & LOAN ASSOCIATION and David W. Foulke.

Superior Court of Pennsylvania.

Argued March 12, 1980.

Filed Sept. 26, 1980.

Petition for Allowance of Appeal Denied Dec. 31, 1980.

John D. Maida, Norristown, for appellant.

Desmond J. McTighe, Norristown, for Bridgeport Federal, appellee.

William H. Bradbury, III, Norristown, for Foulke, appellee.

Before SPAETH, BROSKY and VAN der VOORT, JJ.

SPAETH, Judge:

This is an appeal from an order granting motions for summary judgment on all three counts of appellant's complaint.

The allegations of the complaint may be summarized as follows. Appellant is a construction company specializing in excavation and in the installation of water and sewer lines. In January 1976 it entered into various contracts with the Charles Differ Land Development Corporation in connection with a development known as the Russell Tract, in Collegeville. Differ assured appellant that sufficient funds to pay appellant for its work at the Russell Tract would be placed in escrow with Bridgeport Federal Savings and Loan Association, which is one of the two appellees in this appeal. In April 1976, before beginning the work, appellant conferred with David W. Foulke, president of Bridgeport Federal, who is the other appellee, and Foulke orally confirmed that sufficient funds were being held in escrow for appellant's benefit, and said that Differ was a reliable contractor with the ability to complete the development profitably, and that appellant need not worry about being paid. In reliance on Foulke's representations concerning the escrow fund and Differ's ability, appellant performed his contracts with Differ. However, appellant received only small progress payments from Differ while work at the Russell Tract was underway. In September 1976, after work had been substantially completed, appellant tried to collect the money due it by asking Bridgeport Federal to pay it from the escrow fund. Payment was refused and appellant was told that it would have to look to Differ for payment, which it did unsuccessfully.

The complaint is against Bridgeport Federal, and is in assumpsit and trespass. The assumpsit count claims payment under the escrow agreement. There are two trespass counts. The first trespass count alleges that Bridgeport Federal made payments from the escrow account direct to Differ and that this was a violation of its duty of care to see that the escrow account protected appellant. The second trespass count alleges that Bridgeport Federal, through Foulke, misrepresented the protection to be afforded appellant by the escrow arrangement and Differ's reliability. Bridgeport Federal responded by joining Foulke as an additional defendant and by filing a preliminary objection pleading the Statute of Frauds ¹ as a defense to any oral promise that might have been made to pay appellant from the escrow account what Differ owed appellant.

The lower court overruled the preliminary objection. In considering the objection, the court properly looked only to the allegations of the complaint and deemed them admitted. Gekas v. Shapp, 469 Pa. 1, 364 A.2d 691 (1976). As just noted, the complaint alleges that the escrow fund was held by Bridgeport Federal to assure that appellant would be paid for the work it did under its contract with Differ. It followed that the allegation that Bridgeport Federal, through Foulke, had orally promised to pay appellant from the escrow fund what Differ might owe appellant was not a promise to pay the debt of another but merely an affirmance of Bridgeport's own duty under the escrow agreement between it and Differ. The lower court appropriately cited cases holding that a promise to pay from a fund established for such a purpose is not within the Statute of Frauds. Riley v. Kahan, 68 Pa.Super. 415 (1917); Koons v. Franklin Trust Co., 276 Pa. 377, 120 A. 387 (1923).

After depositions were taken from Tom Morello, appellant's president, and Foulke, and written interrogatories were answered by Bridgeport Federal, both Bridgeport Federal and Foulke moved for summary judgment. The lower court granted both motions, and this appeal followed.

Pennsylvania Rule of Civil Procedure 1035 provides that summary judgment is to be entered only if "the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." Pa.R.C.P. 1035(b). The moving party has the burden of demonstrating that no genuine issue of material fact exists and that it is entitled to judgment as a matter of law. In deciding whether this burden has been satisfied, the court must examine the record in the light most favorable to the non-moving party. Amabile v. Auto Kleen Car Wash, 249 Pa.Super. 240, 376 A.2d 247 (1977); Schacter v. Albert, 212 Pa.Super. 58, 239 A.2d 841 (1968). The court is not to resolve any genuine issue of material fact; its sole responsibility is to determine whether such an issue exists. Moreover, the court should enter summary judgment only when the case is clear and free from doubt. Amabile v. Auto Kleen Car Wash, supra; McFadden v. American Oil Co., 215 Pa.Super. 44, 257 A.2d 283 (1969).

However, Rule 1035 also provides that where a motion for summary judgment has been supported with depositions, answers to interrogatories, or affidavits, the non-moving party may not rest on the mere allegations or denials of its pleading. Pa.R.C.P. 1035(d). Where the allegations of the non-moving party's pleading have been controverted by the moving party's supporting material, the non-moving party must by affidavit, or in some other way provided for by the rule, set forth specific facts showing that a genuine issue of material fact exists. Phaff v. Gerner, 451 Pa. 146, 303 A.2d 826 (1973).

In ruling on the motion for summary judgment, the lower court correctly found on the basis of the material before it that despite the allegations of the complaint, the escrow fund had not been established, and was not being held, for appellant's benefit. The depositions and answers to interrogatories establish the following uncontroverted facts concerning the escrow fund. Funding for the Russell Tract development was provided by a loan, secured by a mortgage, from Bridgeport Federal to Differ. Before issuing the necessary permits for installation of the water and sewer lines and other municipal improvements, the Borough of Collegeville required Differ, as the developer, to establish an escrow fund to insure that these improvements would be properly completed. This requirement, or something equivalent, is standard procedure where a private developer is responsible for providing municipal improvements. The escrow fund was established by Bridgeport Federal holding back $130,000 of the $725,000 loan to Differ. ² Appellees' ...