Court Opinion

ID: 4163497
Source: CourtListenerOpinion
Date Created: 2017-04-26 19:16:29.94729+00
Date Added: 2024-06-11T09:21:23.139812
License: Public Domain

J-A24015-16

                                  2017 PA Super 125

FRONT STREET DEVELOPMENT                            IN THE SUPERIOR COURT OF
ASSOCIATES, L.P. AND JOSEPH PACITTI                       PENNSYLVANIA

                             Appellants

                       v.

CONESTOGA BANK, DAVID BUTTE,
RICHARD ELKO, 130 FRONT STREET L.P.
123 EAST LLC, PHILLIP MCFILLIN,
NATIONAL REALTY INVESTMENT
ADVISORS LLC, THE LOCAL
DEVELOPMENT COMPANY, LLC AND
GRACE LUTERO
                      Appellees                           No. 553 EDA 2016

              Appeal from the Order Entered January 26, 2016
           In the Court of Common Pleas of Philadelphia County
        Civil Division at No(s): August Term, 2014 Case No. 03867

BEFORE: BOWES, OTT AND SOLANO, JJ.

OPINION BY BOWES, J.:                                     FILED APRIL 26, 2017

     Front    Street        Development   Associates,   L.P.   (“Front   Street”   or

“Borrower”) and Joseph Pacitti (“Pacitti” or “Guarantor”) (collectively

“Plaintiffs” or “Borrowers”) appeal and challenge the trial court’s grant of

judgment on the pleadings in favor of Conestoga Bank, David Butte, Richard

Elko (“Bank Defendants” or “Lender”) and the Local Development Company,

LLC (“LDC”). Additionally, they challenge the order striking their demand for
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a jury trial.1 After thorough review, we affirm the grant of judgment on the

pleadings to the Bank Defendants and LDC, thus rendering moot the

propriety of the order striking the jury trial demand.

       This action arises from a loan transaction between sophisticated

commercial parties. Front Street owned several parcels of property located

at Front and Sansom Streets in Philadelphia. The property identified as 130

S. Front Street (“the Property”) is at the center of this controversy.

Defendant Conestoga Bank held a note and a mortgage on the Property

securing a $5.5 million loan made on April 26, 2006, to Front Street. The

loan was to mature on June 1, 2007.

       Despite several allonges to the note that extended the maturity date,

Front Street was in default on the loan in 2010. On April 13, 2010, Plaintiffs

and Bank Defendants entered into a Loan Modification and Forbearance

Agreement (“the Forbearance Agreement”), by which Plaintiffs acknowledged

default, but the Bank agreed to forbear and extend the maturity date on the

____________________________________________

1
  Plaintiffs settled their claims against the buyer, 130 Front Street L.P., its
general partner, Grace Lutero, and National Realty, and these parties were
dismissed on March 31, 2015. On January 26, 2016, Appellants voluntarily
discontinued the only remaining claims against 123 East LLC (“123 East”)
and Phillip McFillin, which effectively rendered the case final. Thus, the
instant appeal filed February 3, 2016 is timely. Appellants challenge the
propriety of the trial court’s May 22, 2015 order striking their demand for a
jury trial as to all parties; the August 24, 2015 order granting judgment on
the pleadings in favor of the Bank defendants; and the October 29, 2015
order granting judgment on the pleadings in favor of Local Development
Company, LLC.

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loan until March 30, 2012.   That Forbearance Agreement was amended in

writing on March 30, 2012, and again on July 8, 2013, ultimately extending

forbearance and the maturity date to March 5, 2014.         The Forbearance

Agreement contained a release (“the Release”) that is the focus of judgment

on the pleadings.

      On June 4, 2014, three months after the apparent lapse of the second

amendment to the Forbearance Agreement, Mr. Pacitti brought the Mazolla

brothers, who were local investors, to a meeting with the Bank Defendants.

According to Plaintiffs, the Bank Defendants represented that the purpose of

the meeting was to discuss how the Mazolla brothers could buy and develop

the Property. A purchase price of $5.8 million was mentioned. Discussion

purportedly focused on the Bank taking title to the property through a

“friendly foreclosure,” and the investors and Mr. Pacitti would develop

sixteen residential homes on the property.

      At that meeting, defendant David Butte, Executive Vice-President of

Conestoga Bank, presented a Deed in Lieu of Foreclosure (“Deed”) dated

June 4, 2014, to Mr. Pacitti. According to Mr. Pacitti, the Bank Defendants

secured his signature on the Deed by representing it was the same

document he had signed earlier and that the Bank just wanted to update its

documents.    The Bank Defendants allegedly reassured Mr. Pacitti that the

Bank was not going to take any adverse action against Plaintiffs, and

Plaintiffs believed that the Deed was intended to facilitate the deal with the

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Mazolla brothers. Based upon those assurances, Mr. Pacitti signed the Deed,

although he averred that he did not realize the name of the grantee in the

Deed was blank.

       According to Plaintiffs, the meeting was a ruse to trick Mr. Pacitti into

signing the Deed to facilitate the Bank’s conveyance of the Property to

another buyer. Unbeknownst to Plaintiffs, the Bank Defendants had already

agreed to sell the loan documents (“Loan Documents”) to LDC, an agent for

123 East, an entity affiliated with Phillip McFillin.   Plaintiffs were already

embroiled in a lawsuit with Mr. McFillin and his associated entities involving

the Property.2     Plaintiffs’ second amended complaint added Phillip McFillin

____________________________________________

2
   When Plaintiffs asserted these claims against McFillin and 123 East, there
was already an action pending by 123 East and McFillin against Plaintiffs in
the Court of Common Pleas of Philadelphia County at No. 816 December
Term 2013 (“Related Case”). In that action, 123 East alleged that Plaintiffs
breached an Agreement for the Sale of Land dated March 30, 2010,
regarding the Property. The agreement provided that McFillin and his
related entity, Avantissimo, LLC or their assignee, would assist Pacitti with
the marketing and sale of the Property. For their efforts, they would receive
fifty percent of any amount exceeding the $5.6 million owing to the Bank.
Each party owed the other the right of first refusal. Avantissimo allegedly
procured a buyer willing to pay $6.5 million for the Property, assigned its
rights under the agreement for sale to 123 East, and that entity sued
Plaintiffs for breach of agreement when Plaintiffs herein refused to sell the
Property to the buyer it procured.

On December 3, 2014, 123 East, McFillin, and Plaintiffs entered into a
stipulation to dismiss the Related Case and to litigate all claims among the
parties in this action. On January 26, 2016, after the entry of judgment on
the pleadings as to the Bank defendants and LDC, Plaintiffs discontinued this
action as to 123 East and McFillin.

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and 123 East as defendants.    They pled claims for declaratory judgment,

fraud, slander of title, negligent misrepresentation, and civil conspiracy

against those defendants.   The substance of the claim was that McFillin,

acting on behalf of Avantissimo and 123 East, tricked Plaintiffs into

executing an Agreement for Sale of the Property and subsequently conspired

with the Bank Defendants to divest Plaintiffs of the Property.     Plaintiffs

alleged that LDC was prepared to cancel the loan purchase agreement, but

decided to move forward after conferring with Mr. McFillin on May 22, 2014.

McFillin purportedly took steps to remove the lis pendens on the property

that the lawsuit filed by 123 East created so that LDC could purchase the

loan and the property.      According to Plaintiffs, the Bank Defendants

pretended to work with them on the deal with the Mazollas while proceeding

to sell the loan to LDC for the benefit of LDC, McFillin, and 123 East. On

August 14, 2014, the Bank assigned and transferred the mortgage on the

Property to defendant 130 Front Street L.P. (“130 Front Street”), and the

Deed naming that entity as grantee was recorded on August 19, 2014.

     Plaintiffs commenced this action against the Bank Defendants on

August 28, 2014, by praecipe for writ of summons, and subsequently filed a

complaint requesting a jury trial.    In their fourth amended complaint,

Plaintiffs alleged that the maturity date of the loan was extended by course

of dealing to March 2015, and the Bank breached the Forbearance

Agreement when it treated the loan as being in default and filed the Deed in

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lieu. Plaintiffs also averred that the Bank breached its contractual duty of

good faith and fair dealing when it procured the signed Deed by

misrepresenting its purpose and consequences and conspired with the other

defendants to divest Plaintiffs of the Property.    The complaint contained

counts of fraud in fact, fraud in the inducement, tortious interference with

prospective contract, invasion of privacy/commercial disparagement, breach

of fiduciary duty, misrepresentation, and civil conspiracy. Plaintiffs alleged

they were deprived of prospective economic opportunities with the Mazolla

brothers when the Bank wrongfully divested them of the Property. Plaintiffs

sought both compensatory and punitive damages from the Bank Defendants.

      In a subsequent amended complaint, Plaintiffs added LDC as a

defendant.   Plaintiffs alleged that the Bank’s April 24, 2014 agreement to

assign the loan to LDC, which was affiliated with 123 East and McFillin, was

in furtherance of the conspiracy among those parties to wrongfully take the

Property from Plaintiffs.

      On April 13, 2015, the Bank Defendants moved to strike the jury trial

demand, asserting the jury trial waiver contained in the Loan Documents.

The court struck the jury trial demand on May 22, 2015, and subsequently

extended that ruling to the other parties in the action. Plaintiffs challenge

that ruling on appeal.

      Thereafter, the Bank Defendants moved for judgment on the pleadings

alleging that Plaintiffs released the claims that they were asserting against

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the Bank Defendants when they voluntarily and knowingly signed the

Forbearance Agreement containing a release on March 13, 2010. The trial

court agreed, and entered judgment on the pleadings in favor of the Bank

Defendants on all of the aforementioned tort and contract claims. The court

reasoned that the release provision in the Forbearance Agreement “explicitly

contemplated the precise claims asserted in the complaint, and released the

[bank] defendants from liability ‘whether statutory, in contract or in tort.’”

Order, 8/24/15, at 1. The court ruled in a subsequent order that since the

Release was valid, it was also enforceable by the assignee, LDC.         Order,

10/29/15, at 1.

       Plaintiffs appealed to this Court.3 They present five questions for our

review:

       1. Did the trial court err in granting Defendant-Appellee the
          Local Development Company LLC’s (“LDC”) and Defendants-
          Appellees Conestoga Bank’s, David Butte’s, and Richard Elko’s
          (collectively, the “Bank Defendants”) motions for judgment on
          the pleadings where there are disputed issues of fact as
          stated in the pleadings such that neither LDC nor the Bank
          Defendants were entitled to judgment as a matter of law,
          including where Plaintiffs made no admissions of fact, but
          instead, specifically denied the applicability of the release as
          to the claims alleged in the fourth amended complaint?

       2. Did the trial court err by applying the release (executed in
          2010) to unaccrued, future claims (including tort claims and a
          claim for breach of the very contract containing the release)
          against the Bank Defendants and LDC that did not arise until
____________________________________________

3
 Plaintiffs filed three notices of appeal to this Court. We quashed two of the
appeals as duplicative on April 18, 2016.

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           2014, where the release contains no such language, and
           where the law of this Commonwealth is clear that releases are
           to be strictly construed?

        3. Did the trial court err by striking Plaintiffs’ jury demand based
           on jury waiver provisions in the loan documents where
           Plaintiffs’ causes of action against the Bank Defendants
           (except for breach of contract) arise from the Bank
           Defendants’ tortious conduct, independent of the loan
           documents, and were not contemplated by the jury waiver?

        4. Did the trial court err by striking Plaintiffs’ jury demand based
           on jury waiver provisions in the loan documents where
           Plaintiffs’ causes of action against the Bank Defendants
           (except for breach of contract) arise from the Bank
           Defendants’ tortious conduct, independent of the loan
           documents, and were not contemplated by the jury waiver?

        5. Did the trial court err by striking (a) the jury demand by
           Pacitti (who did not execute a waiver), and (b) Plaintiffs’ jury
           demand as to those co-defendants who are not parties to any
           document containing a jury trial waiver, rather than
           bifurcating the trial to include both the jury portion and non-
           jury portion?

Appellants’ brief at 5-6.

        Plaintiffs’ first two issues implicate the propriety of the trial court’s

grant of judgment on the pleadings. When we review the grant of judgment

on the pleadings, we apply the same standard applied by the trial court.

Angino & Rovner v. Jeffrey R. Lessin & Associates, 131 A.3d 502, 507

(Pa.Super. 2016).      The grant is proper only “when there are no disputed

issues of fact and the moving party is entitled to judgment as a matter of

law.”    Id.   In making that determination, we confine our review to the

“pleadings and documents properly attached thereto.” Id. Accordingly, "We

must accept as true all well-pleaded statements of fact, admissions, and any

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documents properly attached to the pleadings presented by the party

against whom the motion is filed, considering only those facts which were

specifically admitted."      Id. (quoting Lewis v. Erie Ins. Exch., 753 A.2d

839, 842 (Pa.Super. 2000)).

       Plaintiffs allege that, after the execution of the Agreement containing

the release language at issue (the “Release”), LDC and the Bank Defendants

conspired to fraudulently divest Plaintiffs of the Property. Appellants’ brief at

25.   Since these claims survived preliminary objections, Plaintiffs maintain

that they are well pled and that the factual averments therein must be

accepted as true.       Id. at 26.      Plaintiffs contend further that the factual

allegations therein, which include averments that the Bank Defendants failed

to comply with the terms of the Loan Documents, together with Plaintiffs’

denials of the applicability of the doctrines of release or waiver, preclude

entry of judgment on the pleadings based on the Release.

       Plaintiffs’ argument evinces a misunderstanding of judgment on the

pleadings.4 The trial court granted judgment on the pleadings based on the

____________________________________________

4
   Plaintiffs devote considerable argument to their contention that there were
facts pled that, when deemed to be true, established a genuine dispute as to
the applicability of the Release. For instance, Plaintiffs contend that they
were not in default when the Deed in lieu was executed in 2014. They
maintain that the Forbearance Agreement had been extended by the Bank
Defendants’ oral representations or course of dealing, and that the Bank’s
filing of the Deed was a breach of its agreement to forbear.

(Footnote Continued Next Page)

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Release. The issue before us is whether Plaintiffs alleged facts that, when

deemed to be true, would take their causes of action outside the scope of

the Release.    Plaintiffs’ denials that the Release precluded claims of fraud

and breach of contract are not facts that we must view as true for purposes

of our review. Nor do those denials preclude the Bank Defendants and LDC

from relying upon the Release for purposes of judgment on the pleadings as

Plaintiffs contend. While we assume that the non-moving party’s well-pled

facts are true when we review the grant of judgment on the pleadings, the

same deference is not accorded legal conclusions, for instance, the

inapplicability of legal doctrines such as release or waiver. If, assuming the

facts as pled by Plaintiffs to be true, the Release nevertheless forecloses

Plaintiffs’ claims of breach of contract, tortious interference with prospective

contract, commercial disparagement, misrepresentation, conspiracy, and

fraud, then judgment on the pleadings was proper as a matter of law. Thus,

this claim misses the mark and affords no potential for relief.

      We now address whether the Release contained in the Agreement

operated to bar the Plaintiffs’ claims herein.      The Release is located in

                       _______________________
(Footnote Continued)

The Plaintiffs’ position is undermined by the provision in the Forbearance
Agreement providing that it is a fully integrated document and that any
modifications must be in writing, as well as two prior amendments in writing
that extended the maturity date of the loan. Even assuming the truth of
Plaintiffs’ allegation that the Bank Defendants made oral representations
extending the maturity date of the loan, the efficacy of the Release is not
implicated.

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section 11.1 of the Forbearance Agreement. It is recited therein that, “[i]n

order to induce Lender to enter into this Agreement, Borrower and

Guarantor do agree as follows:”

     (a)   Borrower and Guarantor do hereby fully, finally and forever
           acquit, quit claim, release and discharge lender and its
           past and present officers, directors, employees, agents,
           attorneys, successors and assigns of and from any and all
           obligations, claims, liabilities, damages, demands, debts,
           liens, deficiencies or cause of action to, of or for the
           benefit (whether directly or indirectly) of Borrower and
           Guarantor at law or in equity, known or unknown,
           contingent or otherwise, whether asserted or unasserted,
           whether now known or hereinafter discovered, whether
           statutory, in contract or in tort, as well as any other kind
           or charter of action now held, owned or possessed
           (whether directly or indirectly) by Borrower or Guarantor
           on account of, arising out of, related to or concerning,
           whether directly or indirectly, approximately or remotely
           (i) the negotiation, review or preparation or documentation
           of the Loan Documents or any other documents or
           agreements executed in connection therewith, (ii) the
           enforcement, protection or preservation of lender’s rights
           under the Loan Documents, or any other documents or
           agreements executed in connection therewith, and/or (iii)
           any action or inaction by Lender in connection with such
           documents, instruments and agreements (the “Released
           Claims”).

Loan Modification and Forbearance Agreement, 4/13/10, at § 11.1.

     In addition, the Borrower and Guarantor promised not to prosecute

any claim or counterclaim related to the Released Claims. Loan Modification

and Forbearance Agreement, Section 11.2. (“Borrower and Guarantor do

hereby agree that they will never prosecute nor voluntarily aid in the

prosecution of any action or proceeding related to the Released Claims,

whether by claim, counterclaim or otherwise.”).

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        The Bank Defendants sought judgment on the pleadings based on

Plaintiffs’ express release of all claims “arising out of, relating to or

concerning” the Loan Documents, the enforcement and preservation of the

Lender’s rights, as well as any action or inaction by the Lender regarding the

documents and instruments. Loan Modification and Forbearance Agreement,

4/13/10, at Section 11.1.     They contend that Plaintiffs’ claims, whether in

contract or tort, arise out of and are related to the Loan Documents, and are

thus barred by the Release.

        Plaintiffs counter that, under Pennsylvania law, “a release covers only

those    matters   which may be      fairly said   to   have   been within the

contemplation of the parties when the release was given.”           Restifo v.

McDonald, 30 A.2d 199, 201 (Pa. 1967). Otherwise, they argue, a release

would unfairly operate to bar claims that the parties would never have

foreseen. Appellants’ brief at 30. The claims herein, according to Plaintiffs,

accrued four years after the execution of the Agreement containing the

Release.    Plaintiffs maintain that releases must be strictly construed so as

not to bar claims that had not accrued when the release was executed.

Fortney v Callenberger, 801 A.2d 594 (Pa.Super. 2002); Vaughn v.

Didizian, 648 A.2d 38, 40 (Pa.Super. 1994).         It is only where a release

contains language that can be fairly construed to release unaccrued, future

claims, that it will be enforced to bar such claims.       They argue that the

Release at issue does not contain such language.

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      In support of their position, Plaintiffs rely upon Bowersox Truck

Sales & Serv., Inc. v. Harco Nat. Ins. Co., 209 F.3d 273 (3d Cir. 2000)

(applying Pennsylvania law).     They charge the trial court herein with

improperly inserting the word “future” into the Release where it was not

intended by the parties.    Plaintiffs contend that their conspiracy claims

against LDC and the Bank Defendants did not accrue until 2014, four years

after the execution of the Release and unaccrued future claims were not

contemplated in the Release.

      In response, the Bank Defendants allege that Plaintiffs have merely

recast contract claims as tort-based causes of action that they claim arise

from conduct outside the lending relationship. They assert that this tactic is

of no avail as the Release bars all claims, “whether statutory, in contract or

in tort.” The Bank Defendants maintain further that all of Plaintiffs’ claims

are related to the Loan Documents, as modified and amended from time to

time, and the parties’ ongoing contractual relationship.    Finally, the Bank

Defendants contend that there was no temporal limitation to the Release.

Although the claims at issue herein arose after the execution of the Release,

they were contemplated by the parties when the Release was executed. In

support of that contention, the Bank Defendants point to the fact that the

execution and recording of a deed in lieu was expressly authorized in the

Agreement.    They characterize the execution of the 2014 Deed in lieu as

merely a subsequent modification of an existing loan document, namely the

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2010 deed in lieu.   Not only did the Release apply to claims “now held,”

according to the Bank Defendants, but to claims “unknown,” or “hereinafter

discovered,” even remotely connected with the enforcement or preservation

of the Bank’s rights under the Loan Documents or any other documents

executed in connection therewith.    Such language was intended to include

not only existing claims, but claims that would subsequently arise related in

any way to the Loan Documents and the Bank’s enforcement of its rights.

     Nor, according to the Bank Defendants, are all releases that purport to

release future unaccrued claims unenforceable. They direct our attention to

Three Rivers Motors Co. v. Ford Motor Co., 522 F.2d 885 (3d Cir. 1975),

where, applying Pennsylvania law, the Court of Appeals for the Third Circuit

recognized that future claims may be released if they were contemplated by

the parties at the time of the release. They also point to our High Court’s

decision in Buttermore v. Aliquippa Hosp., 561 A.2d 733, 735 (Pa. 1989),

where a general release of “past, present and future claims” was upheld and

enforced.

     It is undisputed that the parties entered the Loan Modification and

Forbearance Agreement that contained the Release.              There are no

allegations that the Release itself was procured by fraud, duress, or mutual

mistake, and thus, it is binding between the parties.          Strickland v.

University    of   Scranton,   700    A.2d    979,   986   (Pa.Super.   1997).

Furthermore, it is well-settled law that "commercial parties are free to

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contract as they desire."     Mellon Bank, N.A. v. Aetna Business Credit,

Inc., 619 F.2d 1001, 1009 (3d Cir. 1980) (citing Brokers Title Co., Inc. v.

St. Paul Fire & Marine Ins. Co., 610 F.2d 1174 (3d Cir. 1979)).

         In construing a general release, "it is crucial that a court interpret

[the] release so as to discharge only those rights intended to be

relinquished. The intent of the parties must be sought from a reading of the

entire    instrument,   as   well   as   from     the   surrounding   conditions   and

circumstances." Vaughn, 648 A.2d at 40.

         The construction of the Release presents an issue of contract.

         [T]he interpretation of any contract is a question of law and this
         Court's scope of review is plenary. Moreover, we need not defer
         to the conclusions of the trial court and are free to draw our own
         inferences. In interpreting a contract, the ultimate goal is to
         ascertain and give effect to the intent of the parties as
         reasonably manifested by the language of their written
         agreement. When construing agreements involving clear and
         unambiguous terms, this Court need only examine the writing
         itself to give effect to the parties' understanding. This Court
         must construe the contract only as written and may not modify
         the plain meaning under the guise of interpretation.

Nevyas v. Morgan, 921 A.2d 8, 15 (Pa.Super. 2007) (quoting Currid v.

Meeting House Restaurant, Inc., 869 A.2d 516, 519 (Pa.Super. 2005)).

         Where, as here, there is no allegation that the Release was

ambiguous, "[t]he courts of Pennsylvania have traditionally determined the

effect of a release using the ordinary meaning of its language and

interpreted the release as covering only such matters as can fairly be said to

have been within the contemplation of the parties when the release was

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given."   Omicron Sys. v. Weiner, 860 A.2d 554, 559 (Pa.Super. 2004)

(quoting Fortney v. Callenberger, 801 A.2d 594, 597 (Pa.Super. 2002)).

The issue herein is whether the Release in the Forbearance Agreement was

intended to bar claims of the nature asserted by Plaintiffs herein.

      The Forbearance Agreement provides generally as follows. The Loan

Agreement, the Note, the allonges, the Forbearance Agreement and all other

loan documents, “with all prior and future modifications” collectively

constitute the Loan Documents.          Loan Modification and Forbearance

Agreement, 4/13/10, at 1 subsection (A) (emphasis added).         It is recited

therein that “(C) Borrower and Guarantor are in default of their respective

obligations under the Loan Documents as a result of, inter alia, Borrower’s

failure to pay the installments of interest due under the Note, late charges

and certain fees.” Id. at 1. Lender agreed to “forebear from enforcing any

of its rights to collect the indebtedness until the Maturity Date, as same may

be extended pursuant to the terms of this Agreement.” Id. at 3 § 6.1.

      One of the conditions of forbearance was that Borrower and Guarantor

execute a deed in lieu of foreclosure and related documents that would be

held in escrow until either the debt was satisfied or a monetary event of

default occurred. If the debt was not satisfied prior to default, the deed in

lieu would be released to the Bank and it could record the deed at its sole

discretion. Id. at § 6.2(b). Upon expiration of the forbearance, the Lender

could terminate its agreement to forbear without notice or demand, and, at

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Lender’s option, the entire outstanding principal balance of the Loan would

become due and payable in full.      Id. at §§ 9.2-10.2.     The Forbearance

Agreement provided that the obligations of Borrower and Guarantor

expressly “shall remain in full force and effect” but, in consideration for the

Bank’s agreement to forbear execution on the loan and the property,

Plaintiffs released all claims arising out of the Loan Documents.

      In addition to releasing claims related in any way to the Loan

Documents, Guarantor Pacitti affirmed and ratified his guaranty and his

confession of judgment, acknowledged the obligation, and confirmed that he

had no defense, counterclaim or set-off of any kind.         The Forbearance

Agreement further provided that the law of Pennsylvania governed its

interpretation, and that it was fully integrated and could not be orally

modified. Id. at §§ 14.3 and 14.4. Notably, Borrower and Guarantor also

agreed to execute and deliver to Lender such other documents as Lender

believed necessary or convenient to carry out the terms of the Forbearance

Agreement. Id. at § 14.5.

      Thereafter, the parties executed a First Amendment to the Loan

Modification and Forbearance Agreement dated March 30, 2012, extending

the maturity date to March 5, 2013, and a Second Amendment extending

the maturity date to March 5, 2014. All of these documents, by definition,

are Loan Documents as defined in the Forbearance Agreement.

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      After reviewing the Release and the entire Forbearance Agreement, we

are unpersuaded by Plaintiffs’ contention that they “explicitly only released

claims they ‘held, owned or possessed’ in 2010 at the time of execution of

the Release.” Appellants’ brief at 33. The Release contains language clearly

indicating an intent to bar claims even remotely arising out of or connected

to the Loan Documents as subsequently modified.             The definition of Loan

Documents     included   future   modifications    to   existing   documents      and

instruments such as the deed in lieu.          Claims involving the Forbearance

Agreement itself and the simultaneously executed deed in lieu could only

arise after execution of the Release, yet they were released specifically.

      Furthermore, the Plaintiffs expressly released contract or tort claims

“known   or   unknown,    contingent    or     otherwise,    whether   asserted    or

unasserted, whether now known or hereinafter discovered” arising out of or

related to the Loan Documents.         See Loan Modification and Forbearance

Agreement, 4/13/10, at § 11.1 (Release), supra at 11.              The scope of the

Release was not limited to contract claims that had accrued by the time of

the Agreement. The parties intended it to apply to claims of any kind in any

way related to the Loan Documents as subsequently modified.

      The misrepresentation, fraud, tortious interference and civil conspiracy

claims all pertain to the Bank Defendants’ actions in inducing Plaintiffs to

sign the 2014 Deed. The Forbearance Agreement specifically required that

Borrower and Guarantor execute a deed in lieu.              It also anticipated and

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provided for the execution of additional documents in the future to protect

Lender’s rights under the Loan Documents, which would include the 2014

Deed. Even the commercial disparagement/invasion of privacy claim arose

from the Bank Defendants’ alleged obligations to Plaintiffs under the Loan

Documents.

      We conclude that the Release, when read in the context of the

Agreement as a whole, was intended to release claims that would accrue in

the future and which arose from or were remotely related to the Loan

Documents.     Thus, it was contemplated that claims could arise from Loan

Documents that were not yet in existence as of the date of the Agreement

and Release.      Crediting Plaintiffs’ well-pled facts, as we must, and

considering the documents appended to the pleadings, we find that the

Release operates to preclude Plaintiffs from maintaining the causes of action

pled in their Fourth Amended Complaint against the Bank Defendants as a

matter of law.

      The question remains whether LDC, as the assignee of the loan, is

entitled to the benefit of the Release. The trial court concluded that LDC, as

the Bank’s assignee, was entitled to assert the Release. Plaintiffs argue that

LDC cannot avail itself of the Release because it was not a party to the

Forbearance Agreement.     Furthermore, they allege that the claims arose

after the execution of the Forbearance Agreement and the Release applied

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only to claims existing at the time the Release was executed. We rejected

the latter argument vis ‘a vis the Bank Defendants.

      LDC counters that the Release, by its terms, purported to release and

discharge the Bank Defendants and “assigns.”          Loan Modification and

Forbearance Agreement, 4/13/10, at § 11.1.             Thus, LDC contends,

assignment of the loan was “obviously contemplated and permitted.” LDC’s

brief at 17. LDC was the owner of the loan when the Deed was executed on

June 4, 2014.

      We agree with the trial court that LDC, as the assignee of the loan, is

entitled to the protection of the Release in the Forbearance Agreement.

Assignment of the loan was both sanctioned and contemplated, and the

validity and effectiveness of the assignment is not challenged herein. LDC,

as the assignee, stands in the shoes of the assignor. Crawford Cent. Sch.

Dist. v. Commonwealth, 888 A.2d 616, 620 (Pa. 2005). It assumes all of

the assignor’s rights as well as the defenses, set-offs, and counterclaims of

the obligor, provided the latter are based on facts existing at the time of the

assignment.     Smith v. Cumberland Group, 687 A.2d 1167, 1172

(Pa.Super. 1997); Restatement (Second) of Contracts § 336 (1981).

      We find that the Release forecloses the Plaintiffs’ claims against LDC,

the Bank’s assignee, for the same reasons we concluded that it barred the

instant claims against the Bank Defendants. Thus, we affirm the trial court’s

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J-A24015-16

grant of judgment on the pleadings as to both the Bank Defendants and

LDC.

       In light of the foregoing disposition, Plaintiffs’ final three issues

involving the enforceability of the jury trial waiver are moot.

       Order affirmed.

Judgment Entered.

Joseph D. Seletyn, Esq.
Prothonotary

Date: 4/26/2017

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