J-A06011-17

NON-PRECEDENTIAL DECISION - SEE SUPERIOR COURT I.O.P. 65.37

APPLECROSS CLUB OPERATIONS, LLC IN THE SUPERIOR COURT OF

PENNSYLVANIA

Appellee

v.

PULTE HOMES OF PA, LIMITED

PARTNERSHIP, PULTE HOME 

CORPORATION OF THE DELAWARE 

VALLEY, PH 50 LLC AND PGP TITLE OF 

FLORIDA, INC.

Appellants No. 791 EDA 2016

Appeal from the Judgment Entered February 18, 2016

In the Court of Common Pleas of Chester County

Civil Division at No(s): 2012-09804

BEFORE: PANELLA, J., SHOGAN, J., and RANSOM, J.

MEMORANDUM BY PANELLA, J. FILED JUNE 13, 2017

Appellant, Pulte Homes of PA, Limited Partnership (“Pulte”)1engages 

in the business of developing and building residential communities 

throughout Pennsylvania and the United States. Over the course of several 

years starting in 2001, Pulte acquired equitable ownership of several tracts 

____________________________________________

1 The remaining appellants are all business entities associated with Pulte. 

Applecross’s complaint alleged the following relationships, none of which 

were specifically denied by Pulte in its answer: Until June 20, 2012, Pulte 

Home Corporation of the Delaware Valley was the general partner of Pulte, 

and was the signatory to the agreements at dispute in this appeal; after 

June 20, 2012, PH 50 LLC became the general partner of Pulte; and PGP 

Title of Florida, Inc., is the sole member of Pulte Home Corporation of the 

Delaware Valley and PH 50 LLC.
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of land in East Brandywine Township and West Brandywine Township, 

Chester County, pursuant to a desire to build an integrated community. The 

community would be organized around a country club.

The country club, as proposed, was to include an 18-hole golf course, 

a 20,000 to 25,000 square foot clubhouse, a sports center, a fitness center, 

an outdoor pool, two tennis courts and a community center. The clubhouse

would house casual, grill, and family dining restaurants, as well as banquet 

space.

Pulte’s plan involved building the community, of up to approximately 

1,000 homes, over the course of several years. As it was not in the business 

of running country clubs and golf courses, Pulte initially agreed to sell these 

facilities to ClubCorp, Inc., a company with experience managing golf 

courses throughout the United States. 

Starting in 2006, Pulte began construction of the golf course and 

temporary clubhouse facilities to serve the community while it also built the 

community. In 2008, ClubCorp exercised an option in its contract with Pulte

to terminate the agreement. In response, Pulte sought out Appellee, 

Applecross Club Operations, LLC (“Applecross”), to take over ClubCorp’s 

obligations to purchase and manage the country club.

On March 3, 2009, Pulte and Applecross entered into a Development 

and Acquisition Agreement. In broad strokes, the 34-page agreement, 

drafted after extensive negotiations between the parties, provided for 
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Applecross to acquire and manage the country club for a purchase price of 

up to $6,500,000. The agreement required the deed to each home in the 

community to include an obligation to purchase a membership in the country 

club. 

In June 2010, Pulte was eager to close on the sale of the country club 

to Applecross. After further negotiations between the parties, an amendment 

to the original Development and Acquisition Agreement was executed on 

June 30 to address issues of ongoing concern. The parties closed on the sale 

that same day.

Throughout 2011 and early 2012, Pulte attempted to negotiate a 

reduction in contract price for some of the community property located in 

West Brandywine Township, known as the “Anderson” or “Del Webb” tract.

The seller ultimately rejected Pulte’s offers, and Pulte breached the purchase 

contract. Pulte paid the seller an agreed upon amount in damages and 

notified Applecross that the Del Webb tract portion of the community had 

been cancelled.

Applecross responded by noting that it believed the loss of the Del 

Webb tract constituted a material change from the conditions of the 

amended Development and Acquisition Agreement. Pulte disagreed, and 

Applecross initiated this litigation shortly thereafter.

After significant motion practice and discovery, the trial court 

determined that the amended Development and Acquisition Agreement was 
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ambiguous. As a result, the case went before a jury starting on September 

14, 2015. Applecross presented evidence that the inclusion of the Del Webb 

tract into the community was always considered part of the agreement by 

the parties. Pulte presented countervailing evidence, and argued that the 

explicit terms of the amended agreement were contrary to Applecross’s 

claims. The jury entered a verdict in favor of Applecross in the amount of 

$20,000,000. Pulte filed post-trial motions, which were denied by operation 

of law after 120 days. This timely appeal followed.

On appeal, Pulte raises four issues. The first two issues differ only in 

the relief requested by Pulte, but are premised upon the same legal theory: 

that the trial court erred in determining that the amended Development and 

Acquisition Agreement was ambiguous. In its first argument, Pulte asserts 

that it is entitled to judgment notwithstanding the verdict (“JNOV”) due to 

this conclusion, while in its second issue, it argues that it is entitled to a new 

trial.

Pulte’s request for JNOV centers upon an alleged error of law 

committed by the trial court. Our scope of review of such a challenge is 

plenary. See Griffin v. Univ. of Pittsburgh Med. Center-Braddock 

Hosp., 950 A.2d 996, 999 (Pa. Super. 2008). In reviewing the trial court’s 

denial of JNOV, “we must consider all of the evidence admitted to decide if 

there was sufficient competent evidence to sustain the verdict.” Id. (citation 
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omitted). Furthermore, we must view all the evidence and draw all 

inferences in a manner favorable to the verdict winner. See id.

In contrast, “[o]ur standard of review from an order denying a motion 

for a new trial is whether the trial court committed an error of law, which 

controlled the outcome of the case, or committed an abuse of discretion.” 

Mirabel v. Morales, 57 A.3d 144, 150 (Pa. Super. 2012) (citation omitted). 

“A trial court commits an abuse of discretion when it rendered a judgment 

that is manifestly unreasonable, arbitrary, or capricious, has failed to apply 

the law, or was motivated by partiality, prejudice, bias, or ill will.” Id. 

(citation omitted).

Unless an error of law controls the outcome of a case, we will not 

reverse an order denying a new trial. See Lockley v. CSX Transp. Inc., 5 

A.3d 383, 388 (Pa. Super. 2010). “[A] litigant is entitled only to a fair trial 

and not a perfect trial.” Id. at 392 (citation omitted).

Under either theory of relief, Pulte tasks us with determining whether 

the trial court properly construed the amended Development and Acquisition 

agreement. Interpretation of a contract poses a question of law and our 

review is plenary. See Charles D. Stein Revocable Trust v. General Felt 

Industries, Inc., 749 A.2d 978, 980 (Pa. Super. 2000). “In construing a 

contract, the intention of the parties is paramount and the court will adopt 

an interpretation which under all circumstances ascribes the most 
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reasonable, probable, and natural conduct of the parties, bearing in mind the 

objects manifestly to be accomplished.” Id. (citation omitted).

To discern the parties’ intent, we must start with the language used by 

the parties in the written contract. See Szymanski v. Brace, 987 A.2d 717, 

722 (Pa. Super. 2009). Generally, courts will not imply a contract that differs 

from the one to which the parties explicitly consented. See Kmart of 

Pennsylvania, L.P. v. M.D. Mall Associates, LLC, 959 A.2d 939, 944 (Pa. 

Super. 2008). We are not to assume that the language of the contract was 

chosen carelessly or in ignorance of its meaning. See id.

Where the language of the contract is clear and unambiguous, a court 

is required to give effect to that language. See Prudential Prop. and Cas.

Ins. Co. v. Sartno, 903 A.2d 1170, 1174 (2006). Contractual language is 

ambiguous “if it is reasonably susceptible of different constructions and 

capable of being understood in more than one sense.” Hutchison v. 

Sunbeam Coal Co., 519 A.2d 385, 390 (Pa. 1986) (citation omitted). “This 

is not a question to be resolved in a vacuum. Rather, contractual terms are 

ambiguous if they are subject to more than one reasonable interpretation 

when applied to a particular set of facts.” Madison Constr. Co. v. 

Harleysville Mut. Ins. Co., 735 A.2d 100, 106 (Pa. 1999) (citations 

omitted).

When a contract is found to be ambiguous, “extrinsic or parol evidence 

may be considered to determine the intent of the parties.” Z & L Lumber 
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Co. of Atlasburg v. Nordquist, 502 A.2d 697, 700 (Pa. Super. 1985).

“While unambiguous contracts are interpreted by the court as a matter of 

law, ambiguous writings are interpreted by the finder of fact.” Kripp v. 

Kripp, 849 A.2d 1159, 1163 (Pa. 2004) (citation omitted).

Pulte argues that the trial court erred in determining that the 

agreement was ambiguous, thereby allowing the admission of parol 

evidence, or evidence concerning negotiations and prior promises between 

the parties. Furthermore, Pulte asserts that the trial court erred in allowing 

the jury to determine what the rights and obligations of the parties were 

under the agreement. 

Specifically, Pulte asserts that the agreement’s integration clause 

establishes that parol evidence was not admissible. “Where the parties to an 

agreement adopt a writing as the final and complete expression of their 

agreement, alleged prior or contemporaneous oral representations or 

agreements concerning subjects that are specifically covered by the written 

contract are merged in or superseded by that contract.” Blumenstock v. 

Gibson, 811 A.2d 1029, 1035 (Pa. Super. 2002) (citation omitted). The trial 

court found that the Development and Acquisition Agreement was 

ambiguous despite the integration clause because exhibits to the agreement 

were missing.
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To determine whether the trial court’s ruling was correct, we turn to 

the relevant portions of the agreement. In the preamble to the agreement, 

the first whereas clause sets forth the following purpose:

Whereas, [Pulte] is the owner and/or contract purchaser of 

certain land in East and West Brandywine Townships, Chester 

County, Pennsylvania as described on Exhibit_____(the 

“Development Property”) on which [Pulte] is developing a 

residential community known as Applecross Country Club (the 

“Community”)[.]

(omission of exhibit number in original). It is undisputed that the exhibit 

referenced in this clause was not attached to the executed agreement.

Pulte cites several non-controlling precedents to support its proposition 

that the preamble should not be given precedence in construing a contract. 

See Appellant’s Brief, at 47. However, even if we were to agree that the 

cited authority was controlling, it would not be dispositive of the case before 

us. For example, Pulte quotes an unpublished memorandum of the Eastern 

District of Pennsylvania: “Recitals in a contract, such as ‘whereas’ clauses, 

are merely explanations of the circumstances surrounding the execution of 

the contract, and are not binding obligations unless referred to in the 

operative provisions of the contract.” Mozdzierz v. Accenture, LLP., 2010 

WL 4273323 (E.D. Pa. 2010) (quoting 17A C.J.S. Contracts § 317 (2010) 

(emphasis supplied).

In the present case, under Article I, “Definitions,” the agreement 

provides that “Community” is to be defined as having “the meaning set forth 

in the Preamble.” Furthermore, the agreement defines “Development 
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Property” as having “the meaning set forth in the Preamble.” Thus, the 

preamble is referred to in at least two important definitions in the operative 

provisions of the agreement. As a result, even under Pulte’s asserted 

paradigm, the preamble to the Development and Acquisition Agreement 

would be capable of supporting a binding obligation.

Furthermore, the missing exhibit directly affects the issue that was a 

primary focus of litigation in this case: the intended size of the community 

which Pulte was to build to support the country club. Pulte contends that the 

exhibit was never meant to provide a scope for the development of the 

community. However, this supposition is precisely the point. In the absence 

of the exhibit itself, there is no way to know what the exhibit would have 

shown without reference to parol evidence. The agreement was not clear 

and unambiguous on this issue.

Pulte also argues that the agreement does not explicitly provide for a 

“guaranteed” number of homes in the community. While undoubtedly true, 

once the agreement was found to be ambiguous as to the scope of the 

development, it was for the trier of fact to determine what the intent of the 

parties had been on the issue. Pulte presented a strong case that it never 

intended to be bound to build a certain number of homes. The jury, 

however, rejected Pulte’s assertions and instead found that Applecross had 

established that the parties had agreed that the community would consist of 

approximately 1,000 homes and included the Del Webb tract.
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Therefore, we cannot conclude that the trial court erred in ruling that 

there was an ambiguity, that parol evidence would be admissible to address 

the ambiguity, and that the resolution of the ambiguity was for the jury. 

Pulte is not entitled to either JNOV or a new trial on this basis.

Next, Pulte argues that the trial court erred in permitting Applecross’s 

economics experts, John E. Mitchell and Jeffrey R. Dugas, to testify as to 

their opinions on the lost profits suffered by Applecross pursuant to Pulte’s 

breach of the agreement. Pulte contends that these experts’ testimony was 

unreliable and lacking in foundation.

“[T]he admission of evidence is within the sound discretion of the trial 

court and will be reversed only upon a showing that the trial court clearly 

abused its discretion.” Commonwealth v. Fransen, 42 A.3d 1100, 1106 

(Pa. Super. 2012), (citation omitted). A trial court abuses its discretion if it 

misapplies the law or rules in a manner lacking reason. See 

Commonwealth v. Rega, 856 A.2d 1242, 1244 (Pa. Super. 2004). 

Pulte focuses on its belief that the country club was a new business 

with no history of profitability. Thus, it believes that Mitchell’s and Dugas’s 

expert testimony was “speculative and not founded in fact.” Appellant’s 

Brief, at 51. 

Lost profits are recoverable when, among other requirements not 

relevant here, their scope can be established with reasonable certainty. See 

Quinn v. Bupp, 955 A.2d 1014, 1021 (Pa. Super. 2008). Pulte contends 
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that Mitchell and Dugas based their opinions regarding lost profits on mere 

speculation from Applecross’s principal, Bob Levy. “Speculative profits are 

those the evidence of which is so meager or uncertain as to afford no 

reasonable basis for inference.” Birth Center v. St. Paul Cos., Inc., 727 

A.2d 1144, 1162 (Pa. Super. 1999) (citation omitted).

Pulte’s argument that the country club profits were speculative is 

premised on its belief that it was a “new business with no history of 

profitability.” Appellant’s Brief, at 52. New businesses face a higher burden 

in establishing lost profits, as they have no historical basis to establish 

profitability. See Delahanty v. First Pa. Bank, N.A, 464 A.2d 1243, 1260 

(Pa. Super. 1983). However, as a general rule, we do not require parties to 

prove damages with high standards of precision, but merely a reasonable 

level of certainty. See Smith v. Penbridge Assocs., Inc., 655 A.2d 1015, 

1022 (Pa. Super. 1995). More importantly, we have consistently held that 

“the breaching party should not be allowed to shift the loss to the injured 

party when damages, even if uncertain in amount, were certainly the 

responsibility of the party in breach.” Id. (citations omitted).

Here, as a matter of logic, it is clear that the reduction in the number 

of homes that were required to purchase memberships in the country club 

and golf course caused some damage to Applecross’s business. Indeed, 

Pulte’s appraisal expert, Shaun Henry, opined that the reduction in the 

number of homes in the community reduced the value of the golf course by 
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$3,300,000. See N.T., 9/25/15, at 155-156. Thus, Applecross was not 

required to prove its lost profits damages to a mathematical certainty, but 

merely to a reasonable level of certainty.

In these circumstances, expert testimony is an appropriate form of 

proof. See Bolus v. United Penn Bank, 525 A.2d 1215, 1226 (Pa. Super. 

1987).

The facts or data in the particular case upon which an expert 

bases an opinion or inference may be those perceived by or 

made known to the expert at or before the hearing. If of a type 

reasonably relied upon by experts in the particular field in 

forming opinions or inferences upon the subject, the facts or 

data need not be admissible in evidence.

Pa.R.E. 703. Assertions of flaws in an expert’s calculations “go[] only to 

weight jury should accord it and not to its admissibility.” Bolus, 525 A.2d at 

1226 (citation omitted). 

Pulte’s argument, at its core, is a complaint that Applecross’s experts, 

Dugas and Mitchell, relied heavily upon numbers given to them by 

Applecross’s principal, Levy. Pulte was given the opportunity to crossexamine Levy on how he arrived at these numbers. It was able to crossexamine Dugas and Mitchell regarding their reliance on Levy’s numbers, and 

the extent and depth of their independent assessments on the issue of 

damages. Finally, as noted, Pulte had its own experts testify to their own 

opinions and to critique Levy’s numbers as well as the methodology used by 

Dugas and Mitchell. 
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The trial court did not abuse its discretion in permitting Dugas and 

Mitchell to testify as to their opinions on the issue of damages. The flaws 

highlighted by Pulte were an issue for the jury to weigh in evaluating the 

credibility of the experts’ opinions, and not grounds for finding Applecoss’s 

experts’ opinions inadmissible. Pulte’s third issue on appeal therefore merits 

no relief.

In its final issue, Pulte argues that the trial court erred in failing to 

enforce a limitation on damages contained in the Development and 

Acquisition Agreement. Section 23.3 of the agreement is entitled “Event of 

Default by Seller,” and provides, in relevant part:

If [Pulte] fails to complete any Closing or perform any act 

required of [Pulte] hereunder, or otherwise is in breach of any of 

its representations or warranties or covenants hereunder in a 

material respect hereunder, then [Applecross] shall deliver to 

[Pulte] written notice of such default or breach and [Pulte] shall 

have a period of ten(10) days to cure such default ... If such 

default or breach remains uncured beyond the cure period 

described above, ..., [Applecross] shall be entitled to either (i) 

specific performance by [Pulte] or (ii) if specific performance is 

not available, to terminate this Agreement in which event [Pulte] 

shall promptly reimburse [Applecross] for [Applecross’s] actual 

out-of-pocket costs incurred in connection with this Agreement 

and the performance of [Applecross’s] obligations hereunder, but 

in no event shall such amount exceed FIVE HUNDRED 

THOUSAND DOLLARS ($500,000). 

(emphasis supplied). Pulte contends that this section acts to limit 

Applecross’s claim for damages arising from any breach to a maximum of 

$500,000.
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Applecross argues, and the trial court concluded, that section 23.3 is a

provision that applies only to remedies for pre-closing breaches. Viewed in 

context of the entire agreement, this conclusion is compelling. However, we 

conclude that the language of the section itself defeats Pulte’s argument.

Pulte’s argument requires a strained reading of section 23.3. The 

highlighted language, which includes the $500,000 limitation, does not 

contain the term “damages” at all. Nor does it explicitly refer to lost profits. 

It refers solely to “actual out-of-pocket costs” borne by Applecross. It does 

not purport to limit any other form of damage, such as consequential or 

incidental, that Applecross might suffer. It therefore merely acts to limit 

Applecross’s claim for damages based upon “out-of-pocket costs” to 

$500,000. Pulte’s request was to reduce the entire award, which included 

lost profits, to $500,000. Pulte does not identify any amount of the jury’s 

award which is traceable to “out-of-pocket costs.” As such, we conclude that 

the trial court did not err in refusing to mold the verdict to $500,000.

Judgment affirmed. Jurisdiction relinquished.

Judgment Entered.

Joseph D. Seletyn, Esq.

Prothonotary

Date: 6/13/2017