Court Opinion

ID: 3206433
Source: CourtListenerOpinion
Date Created: 2016-05-24 23:08:07.054171+00
Date Added: 2024-06-11T09:12:17.918349
License: Public Domain

J-A02024-16

NON-PRECEDENTIAL DECISION - SEE SUPERIOR COURT I.O.P. 65.37

JPM NORTHERN, LLC                                 IN THE SUPERIOR COURT OF
                                                        PENNSYLVANIA
                            Appellant

                       v.

CRAIG E. DALLMEYER, TAMMIE K.
DALLMEYER AND CARL E. DALLMEYER

                            Appellees                 No. 1229 MDA 2015

                       Appeal from the Order June 23, 2015
                  In the Court of Common Pleas of York County
                    Civil Division at No(s): 2007-SU-1843-Y01

BEFORE: PANELLA, J., STABILE, J., and FITZGERALD, J.*

MEMORANDUM BY PANELLA, J.                                FILED MAY 24, 2016

        Appellant, JPM Northern, LLC (“JPM”), appeals from the order entered

June 23, 2015, in the Court of Common Pleas of York County, which entered

summary judgment in favor of Appellees, Craig E. Dallmeyer, Tammie K.

Dallmeyer and Carl E. Dallmeyer. We affirm.

        We take the underlying facts of this matter from the trial court’s

opinion.

              In this case, [Appellees] were developing a piece of real
        estate located in East Manchester Township, known as the
        Northern Heights Development. No later than June 18, 2004,
        [Appellees] retained Gregory & Sons, Inc. (“Gregory”) to install
        certain improvements at Northern Heights, including storm and
        sanitary sewer drains. On September 17, 2004, [Appellees], as
        Carobell, Inc., entered into a second construction agreement
____________________________________________

*
    Former Justice specially assigned to the Superior Court.
J-A02024-16

     with Gregory that superseded the first. The second agreement
     described that [Appellees] would retain an on-site manager,
     John Hertzog of James R. Holley & Associates to oversee
     Gregory’s work.

           On October 22, 2004, [JPM] and [Appellees] entered into
     the Agreement of Purchase and Sale [(the “Agreement”)] that
     detailed the terms of the Northern Heights Development sale
     from [Appellees] to [JPM]. The purchase price was
     $1,460,000.00. The [Agreement] contains certain provisions,
     including that: (1) the property was sold “as-is” and [JPM] will
     not rely on [Appellees’] representations;[Fn2] (2) [JPM] was
     provided a 30-day “conditions period” to inspect the property
     and terminate the [Agreement] within that timeframe at its
     discretion;[Fn3] (3) [JPM] would assume all [Appellees’] rights and
     obligations under the [contract with Gregory], and indemnify and
     hold [Appellees] harmless under such contract; (4) an
     integration clause; (5) a provision limiting damages and
     remedies[; and (6)] a provision prohibiting oral modifications.

            [JPM] avers that after the [Agreement] was executed, but
     before the 30-day conditions period expired, the Parties
     discussed concerns regarding Gregory’s workmanship. [JPM]
     alleges that [Appellees] provided assurances that Gregory’s work
     would be performed properly since James R. Holley & Associates
     was overseeing the work. [JPM] avers that [Appellees], on
     multiple occasions during the conditions period, and again at
     closing, guaranteed that Gregory’s work would be properly
     installed. [JPM] contends that it proceed to closing based on
     [Appellees’] oral assurance of the quality of Gregory’s work.

           After closing, [JPM] alleges that it discovered that
     Gregory’s work was not performed correctly and that it “did not
     meet applicable municipal codes, ordinances and regulations.”
     [JPM] wrote to [Appellees] on April 6, 2005 and September 8,
     2005 notifying [them] of the deficiencies and requested payment
     for remediation. [Appellees] produced a letter, dated February 2,
     2007, purportedly from [JPM] requesting a $25,000.00 payment.
     [JPM] is seeking approximately $208,000.00 in damages to
     correct Gregory’s work.

            On November 8, 2007, [JPM] filed [a Complaint seeking
     damages for breach of contract and warranty]. After [Appellees]
     filed a first set of Preliminary Objections (“POs”), [JPM] filed an
     Amended Complaint on March 3, 2008. [Appellees] filed a

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      second set of POs to the Amended Complaint on March 27, 2008,
      and [the trial court] overruled the same on May 14, 2009.
      [Appellees] filed the instant Motion for Summary Judgment, and
      a Brief in [s]upport [thereof] on April 16, 2013.

         [Fn2]
              [Appellees’] Mot. For Summ. J., Ex. B, [Agreement]
         Section 4.1(f):

         “Upon closing, seller shall sell and convey to buyer and
         buy shall accept the property “as is, where is, with all
         faults.” Except as otherwise provided in this agreement,
         buyer has not relied upon and will not rely upon, either
         directly or indirectly, any representation or warrant of
         seller with respect to the property. Buyer will conduct such
         investigations of the property including but not limited to,
         the physical and environmental conditions thereof, as buy
         deems necessary to satisfy itself as to the condition of the
         property and will rely solely upon the same and not upon
         any information provided by or on behalf of seller. Upon
         closing, buyer shall assume the risk that adverse matters,
         including but not limited to, construction defects and
         adverse physical and environmental conditions, may not
         have been revealed by buyer’s investigations, except to
         the extent that seller intentionally withheld such
         information. The terms, conditions of this Section 4.1 shall
         expressly survive the closing and not merge therein…”
         [Fn3]
                 Id. at [Agreement] Section 2.1(a):

         “Buyer shall have thirty (30) days from the date of a fully
         executed [Agreement] to satisfy the conditions set forth in
         Section 2.1(a) and (b)…”

Trial Court Opinion, 6/23/15 at 2-4 (some footnotes omitted). Following a

hearing, the trial court granted Appellees’ motion and entered judgment in

their favor. This appeal followed.

      JPM raises the following issues for our review.

      A. Did the [l]ower [c]ourt commit an error of law and abuse its
         discretion in determining that there was no consideration for
         an oral modification of a contract where evidence supported a
         finding that JPM refused to proceed with the settlement on

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         the property unless the Dallmeyers agreed to guaranty the
         workmanship of Gregory & Sons’ on the infrastructure
         improvements?

      B. Did the [l]ower [c]ourt commit an error of law and abuse its
         discretion in finding JPM assumed the Dallmeyers’ rights and
         obligations under the Dallmeyers’ construction contract [with]
         Gregory & Sons’ where evidence supported a finding that JPM
         and the Dallmeyers modified their contract to remove such
         [an] assumption?

      C. Did the [l]ower [c]ourt commit an error of law and abuse its
         discretion in failing to view all facts of record and reasonable
         inferences therefrom in a light most favorable to JPM, as the
         non-moving party, resolving all doubts as to the existence of
         a genuine material fact against the Dallmeyers, as the moving
         party?

      D. Did the [l]ower [c]ourt commit an error of law and abuse its
         discretion in imposing a clear and convincing evidence
         standard on JPM, the non-moving party, to withstand a
         motion for summary judgment?

Appellant’s Brief at 4-5.

      We review a challenge to the entry of summary judgment as follows.

      [We] may disturb the order of the trial court only where it is
      established that the court committed an error of law or abused
      its discretion. As with all questions of law, our review is plenary.

      In evaluating the trial court’s decision to enter summary
      judgment, we focus on the legal standard articulated in the
      summary judgment rule. See Pa.R.C.P., Rule 1035.2. The rule
      states that where there is no genuine issue of material fact and
      the moving party is entitled to relief as a matter of law,
      summary judgment may be entered. Where the nonmoving
      party bears the burden of proof on an issue, he may not merely
      rely on his pleadings or answers in order to survive summary
      judgment. Failure of a non-moving party to adduce sufficient
      evidence on an issue essential to his case and on which he bears
      the burden of proof establishes the entitlement of the moving
      party to judgment as a matter of law. Lastly, we will review the
      record in the light most favorable to the nonmoving party, and
      all doubts as to the existence of a genuine issue of material fact
      must be resolved against the moving party.

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E.R. Linde Const. Corp. v. Goodwin, 68 A.3d 346, 349 (Pa. Super. 2013)

(citation omitted).

      The Agreement between JPM and Appellees provides for modification

“only by a written instrument signed by Buyer and Seller.” Agreement,

Section 10.10. This Court has recognized that

      [a]lthough the [a]greement states that it cannot be altered
      except in writing, the law in this jurisdiction holds otherwise, to-
      wit:

         [A] written contract may be orally modified, even when the
         contract expressly provides that modifications must be in
         writing. [...] Somerset Community Hospital v. Mitchell,
         [685 A.2d 141 (Pa. Super. 1996)]. As Somerset indicates,
         “an agreement that prohibits non-written modification may
         be modified by [a] subsequent oral agreement if the
         parties' conduct clearly shows the intent to waive the
         requirement that the amendments be made in writing.”
         Finally, an oral modification of a written contract must be
         proved by clear, precise and convincing evidence.

      Fina v. Fina, 737 A.2d 760, 764 (Pa. Super. 1999) (citations
      omitted). Accord Solazo v. Boyle, 76 A.2d 179, 180 (Pa. 1950)
      (“It is true that a written contract may be modified by parol
      […].”)[.]

ADP, Inc. v. Morrow Motors, Inc., 969 A.2d 1244, 1249-50 (Pa. Super.

2009) (some brackets added).

      Viewing the facts in the light most favorable to the non-moving party,

as we must, we agree that JPM failed to produce clear and convincing

evidence of an oral modification of the written Agreement. JPM’s argument is

based mainly upon the testimony of its members that Appellees made

repeated assurances that the work performed by Gregory & Sons would be

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done properly. JPM claims that it was induced to sign the Agreement based

upon Appellees’ assurances, even while admitting that no member ever

communicated to Appellees that JPM would not have closed on the property

if no assurances were made. See Appellant’s Brief at 13. Assuming, for the

sake of argument, that Appellees made such workmanship assurances, JPM’s

reliance thereon was certainly misplaced. Section 4.1(f) of the Agreement

clearly stipulates that the Buyer shall accept the property upon closing “as

is” and that Buyer “has not relied upon and will not rely upon, either directly

or indirectly, any representation or warrant of seller with respect to the

property.” Therefore, JPM was clearly not entitled to rely upon any

workmanship assurances Appellees may have made. Further, there is no

indication that Appellees failed to disclose any potential concerns over the

quality of work furnished by Gregory & Sons, as JPM concedes that Appellees

“had general discussions with the members of JPM about concerns regarding

the timeliness and quality of Gregory’s work.” Appellant’s Brief at 14.

      The only signed writing memorializing any modification to the

Agreement is a Bond and Warrant executed at closing, which provided JPM

with a right to setoff up to $25,000.00 of the purchase price to “repair

deficiencies to the installed storm water improvements.” It is uncontested,

however, that JPM did not exercise the right of set off under the Bond and

Warrant, but instead paid the full purchase price for the property. JPM points

to no other signed writing suggesting Appellees agreed to modify the

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Agreement to provide any type of guarantee for work completed under the

Gregory & Sons contract.

     JPM counters that an Assignment Agreement, signed by the parties on

January 10, 2005, evidenced the parties’ intent that Appellees would assume

the rights and obligations under the Gregory & Sons contract. In the

Assignment Agreement, the provision providing for the assignment to JPM of

“[t]he improvement contract for phase I of Northern Heights dated

September 17, 2004 with Gregory and Sons, Inc.” is crossed out and

initialed by the parties’ representatives. See Assignment Agreement, Section

2(c)(vi). Although JPM suggests that the strike-through of that section

evidences its refusal to close absent the alleged workmanship guarantee,

this argument ignores the fact that JPM had already assumed the rights and

obligations under the Gregory & Sons construction agreement when it signed

the underlying sale Agreement. Section 7.5 of the Agreement states that

     Buyer and Seller agree that Buyer shall assume all rights and
     obligations of Seller under an in connection with Seller’s
     Construction Contract with Gregory & Sons, Inc. dated
     September 17, 2004, and shall indemnify and hold harmless
     Seller from and against any claims, demands, courses of action
     and liabilities of the “Contractor” under such contract as defined
     therein.

(emphasis added).

     Notwithstanding the modification of the Assignment Agreement, there

is no evidence that the parties intended to modify the assignment set forth

in Section 7.5. Absent a clear written modification to that section, the

assignment provision in the Agreement remains valid and enforceable. Thus,

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we disagree that the modified Assignment Agreement alone constitutes

evidence that the parties intended to alter the assignment provision

contemplated in the original Agreement.

       In light of the foregoing, we find that Appellees’ verbal assurances on

the workmanship under the Gregory & Sons contract alone do not constitute

clear and convincing evidence1 of the parties “intent to waive the

requirement that the amendments be made in writing.” ADP, supra. In the

absence of such evidence, we agree with the trial court’s determination that

JPM has failed to raise a genuine issue of material fact with respect to the

oral modification of the Agreement to include workmanship guarantees.

Thus, we conclude that the trial court neither abused its discretion nor

committed an error of law in granting summary judgment.2

____________________________________________

1
  JPM incorrectly asserts that the trial court erroneously utilized a “clear and
convincing evidence” standard when weighing the entry of summary
judgment in this case. Appellant’s Brief at 21. The trial court correctly noted
that JPM had the burden of establishing an oral modification of the
Agreement by clear and convincing evidence. See Trial Court Opinion,
6/23/15 at 9. There is no evidence the trial court imposed this standard
when weighing Appellees’ Motion for Summary Judgment.
2
  JPM additionally contests the trial court’s determination that an oral
modification of the Agreement, if it existed, was not supported by adequate
consideration. See Appellant’s Brief at 11. As we have already determined
that JPM failed to meet its burden of establishing an oral modification of the
Agreement by clear and convincing evidence, we need not speculate whether
any modification would have been supported by adequate consideration. See
Richmond v. McHale, 35 A.3d 779, 786 (Pa. Super. 2012). (citation
omitted) (“[W]e are not bound by the rationale of the trial court and
may affirm on any basis.”).

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     Order affirmed.

Judgment Entered.

Joseph D. Seletyn, Esq.
Prothonotary

Date: 5/24/2016

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