Court Opinion

ID: 6340147
Source: CourtListenerOpinion
Date Created: 2022-05-12 16:11:59.863104+00
Date Added: 2024-06-11T15:49:13.798325
License: Public Domain

J-A04018-22

NON-PRECEDENTIAL DECISION - SEE SUPERIOR COURT I.O.P. 65.37

 CORNELL ARDMORE, LP                     :    IN THE SUPERIOR COURT OF
                                         :         PENNSYLVANIA
                                         :
              v.                         :
                                         :
                                         :
 LORNA ISEN                              :
 _____________________________           :
 LORNA ISEN                              :    No. 1257 EDA 2021
                                         :
                                         :
              v.                         :
                                         :
                                         :
 CORNELL ARDMORE, LP, CORNELL            :
 ARDMORE, TH, LLC, CORNELL               :
 HOMES, LLC, AND THE RYLAND              :
 GROUP, INC.                             :
                                         :
                                         :
 APPEAL OF: CALATLANTIC GROUP,           :
 INC., SUCCESSOR BY MERGER TO            :
 THE RYLAND GROUP, INC. AND THE
 RYLAND GROUP, INC.

            Appeal from the Judgment Entered March 23, 2021
   In the Court of Common Pleas of Montgomery County Civil Division at
                          No(s): 2015-11943,
                               2015-15607

BEFORE: LAZARUS, J., NICHOLS, J., and McLAUGHLIN, J.

MEMORANDUM BY NICHOLS, J.:                              FILED MAY 12, 2022

      Appellant Calatlantic Group, Inc., successor by merger to the Ryland

Group, Inc., appeals from the judgment entered in favor of Appellee Lorna

Isen following a bifurcated trial in these consolidated actions.     Appellant

contends that the trial court erred in holding that Appellant had explicitly or
J-A04018-22

implicitly assumed the liabilities of co-defendants Cornell Ardmore, LP, Cornell

Ardmore, TH, LLC, and Cornell Homes, LLC. We affirm.

      The trial court summarized the relevant factual and procedural history

of this matter as follows:

      A. Evidentiary Facts

      1. [Appellee’s] purchase and the defects in her home

      The case arises from the sale of a home by defendant Cornell
      Ardmore, LP (Cornell Ardmore), to [Appellee] in a development
      known as Waterford Walk, located in the Ardmore section of Lower
      Merion Township, Montgomery County. Cornell Ardmore is a
      limited partnership whose sole general partner is defendant
      Cornell Ardmore, TH, LLC. That general partner is in turn owned
      by Cornell Homes of Delaware, LLC [(Cornell Delaware)], an
      umbrella for various residential developments marketed under the
      Cornell Homes name. [Cornell Delaware], was not named as a
      party in this litigation. The construction of the homes in Waterford
      Walk, as in many other Cornell Homes developments, was done
      by defendant Cornell Homes, LLC, a construction general
      contractor, primarily through subcontractors. Cornell Homes,
      LLC, is itself owned by [Cornell Delaware].

      The evidence[fn4] showed that [Appellee] signed a purchase
      agreement with Cornell Ardmore on June 24, 2013, for the
      purchase of a unit at Waterford Walk. . . .

            The evidence is summarized in a light most favorable to
         [fn4]

         [Appellee], as the verdict winner.

      In connection with the purchase, [Appellee] received a written
      Cornell Homes Premier Protection Plan. The Plan set forth in detail
      the warranties provided by the “Builder” for one, two, or ten years,
      depending on the component at issue.

      Closing on the purchase occurred in November 2013, subject to a
      punch list and an escrow to cover uncompleted work. [Appellee]
      finally moved into the home in early January 2014 and
      immediately experienced repeated floods at the property. . . .
      Despite repairs by Cornell Homes, LLC, [Appellee] continued to
      experience floods and water leaks, including flooding of the

                                     -2-
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     backyard deck, totaling ten such incidents between January 2014
     and February 2017.        [Appellee] encountered other issues,
     including blown fuses, electrical vibration when she inserted plugs
     into sockets, sharp edges on tiles, and uneven and insufficient
     heat in parts of the house. . . .

                                 *    *    *

     [Appellee] finally moved out of her home in February 2017, feeling
     that it was unsafe to remain in the home as a result of repeated
     flooding, missing parts of floors, the absence of heat in parts of
     the house, and electrical issues. . . .

     2. The Purchase Agreement and the Services Agreement
     between [Appellant] and [Cornell Delaware]

     On May 23, 2013, prior to [Appellee’s] purchase agreement,
     [Cornell Delaware], entered into a separate purchase agreement
     with [Appellant], under which [Appellant] agreed to purchase the
     assets of several Cornell developments, including Waterford Walk,
     as well as rights to the name “Cornell Homes.” On July 15, 2013,
     [Appellant] and [Cornell Delaware], entered into amendment no.
     8 to purchase agreement. Among other changes, amendment no.
     8 amended the purchase agreement by excluding Waterford Walk
     from the assets to be purchased by [Appellant]. The document
     recited that the development was being excluded because Ryland,
     as a result of its due diligence inspections, had determined that
     “certain environmental and/or other concerns” may exist on the
     Waterford Walk property.

     Although Waterford Walk was thereby excluded from the acquired
     assets, [Appellant] and [Cornell Delaware], entered into a
     separate services agreement regarding Waterford Walk and other
     excluded assets on or about July 18, 2013, the same date as the
     closing on the purchase by [Appellant]. The services agreement
     provided that in consideration for the assets that [Appellant] was
     acquiring, [Appellant] agreed to provide services “in connection
     with the assets that were not acquired and the ongoing operation
     associated with these assets.” Accordingly, [Appellant] agreed to
     provide, through July 31, 2014, “certain accounting, customer
     service and other operational and supervisory services utilizing
     [Appellant] employees.” The services agreement went on to
     establish certain limitations on [Appellant’s] obligations under the
     agreement. The services agreement was extended by agreement
     through November 30, 2014.[fn6]

                                     -3-
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        [fn6]The services agreement dated July 18, 2013, was not
        marked as an exhibit at trial. Instead, a services agreement
        dated July 28, 2014, was admitted [at trial] as Exhibit P-25.
        In testimony at trial, [Mark McSorley, one of Appellant’s
        representatives] confirmed that “this particular document is
        an amendment to a similar agreement that was executed on
        or around July 18, 2013,” and that “even though this
        document is dated July 28, 2014, the reality is it’s a
        continuation of what really began to happen on July 18,
        2013 going forward in time.” There was no objection to this
        oral testimony of the content of the prior agreement.

     Pursuant to the purchase agreement, Gregory Lingo, one of the
     three members of [Cornell Delaware], became President of the
     Philadelphia Division of [Appellant] (one of many divisions in the
     corporation), and Mark McSorley, another of the three members,
     became Vice President of Finance of the Philadelphia Division [of
     Appellant]. At trial, Mr. McSorley explained the purpose of the
     services agreement as follows:

        So when [Appellant] purchased the assets of [Cornell
        Delaware], some of the assets, they realized that they were
        buying the majority assets but not all the assets. And so
        they recognized that these other assets that weren’t being
        purchased were going to need manpower to complete the
        homes.    And even in some cases a home that was
        constructed and closed by Cornell, a month before that may
        have a service issue and they didn’t want us to need to go
        and hire temporary service people in these different
        locations and be distracted by those activities. So we
        entered into a services agreement, which allowed
        employees that became [Appellant] employees to still
        represent themselves and represent Cornell Homes as
        Cornell Homes employees.

     [Mr. McSorley further testified that prior to the purchase
     agreement between Cornell Delaware and Appellant, employees
     of Cornell Homes, LLC performed work on Waterford Walk
     pursuant to a service agreement between Cornell Homes, LLC and
     Cornell Ardmore. He explained that while Cornell Ardmore owned
     the land on which Waterford Walk was being built, it did not have
     any employees. Mr. McSorley described Cornell Homes, LLC as
     the builder of Waterford Walk. He also explained that although
     Cornell Homes, LLC, was not named in the services agreement, it
     was included in that agreement because Cornell Delaware owns

                                    -4-
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     Cornell Homes, LLC. Additionally, Mr. McSorley testified that
     Appellant entered into a licensing agreement with Cornell
     Delaware, which allowed Appellant to use the Cornell Homes
     brand name and logo. A copy of this licensing agreement was
     admitted into evidence.]

     Prior to [Appellant’s] purchase, the construction of Waterford Walk
     was overseen by two employees of Cornell Homes, LLC — James
     Kildea, the project manager, and Matthew Egan, Mr. Kildea’s
     supervisor. After the purchase, they became employees of
     [Appellant] but continued to manage Waterford Walk, apparently
     pursuant to the services agreement. Mr. Egan is listed on the
     services agreement as a[n employee of Appellant] who would
     provide services [to Waterford Walk] under the agreement. Mr.
     Kildea is not so listed, but he continued to oversee the
     construction work on [Appellee’s] home both before and after she
     acquired title on November 15, 2013. Mr. Kildea was confused
     over whether his continued work on Waterford Walk was in his
     capacity as an employee of [Appellant] or of a Cornell entity, and
     he remained uncertain at the time of trial. In any event, in his
     work on completion of Waterford Walk, he was paid by
     [Appellant].

     On July 23, 2013, ten days after the closing on [Appellant’s]
     purchase, [Appellee] received an email from Ms. Zefferino,
     reading as follows:

        Hi All,

        I just wanted to be one of the first to let you know about a
        recent event that just occurred in our Custom Homes family!
        On Friday, July 19th it was announced that [Appellant]
        acquired the assets and operations of Cornell Homes. (I’ve
        attached the link to the Wall Street Journal article below). I
        wanted to assure all of you that it will be “business as usual”
        here at Waterford Walk and this acquisition does not change
        anything to do with the personnel, construction, and quality
        of your home. This influx of capital into the already
        successful Cornell Homes company will provide endless
        opportunities in land acquisition and allow our company to
        grow.

                                 *    *    *

        All of us here at Cornell will continue to work diligently to
        complete your beautiful new homes at Waterford Walk! . . .

                                     -5-
J-A04018-22

          Rose Zefferino

          General Manger

          Cornell Custom . . .

       At the time that she received this email, [Appellee] did not have
       a deposit at risk, so she could have canceled the agreement of
       sale without penalty. She did not do so, in part because she was
       reassured by Ms. Zefferino’s email that the construction of her
       home was now being backed by [Appellant], a well-capitalized
       publicly held company with a good reputation.

       Following the services agreement, in the course of sending emails
       to [Appellee], Mr. Kildea and Mr. Egan sometimes used an email
       address with the domain of “ryland.com” and a signature block
       reading “Cornell Homes by Ryland Homes.”

       B. Procedural History

       On March 29, 2015, Cornell Ardmore commenced this action
       against [Appellee], docketed at No. 2015-11943, seeking to
       recover the funds escrowed at the closing on her home. On July
       8, 2015, [Appellee] commenced a separate action against Cornell
       Ardmore, Cornell Ardmore TH, LLC (the general partner of Cornell
       Ardmore), and Cornell Homes, LLC (collectively, “the Cornell
       Defendants”), and [Appellant], docketed at No. 2015-15607. Her
       First Amended Complaint, filed August 24, 2015, asserted six
       counts — Count I, for breach of contract; Count II, for breach of
       express written warranty; Count III, for breach of implied
       warranties; Count IV, far violation of the Interstate Land Sales Pull
       Disclosure Act; Count V, for violation of the Uniform Planned
       Community Act; and Count VI, for violation of the Unfair Trade
       Practices and Consumer Protection Law (UTPCPL).

       By orders of the Honorable Calvin S. Drayer, Jr., dated March 11,
       2016, the two cases were consolidated under No. 2015-11943,
       the first-filed case. [Order, 2015-15607, 3/11/16; R.R. at 372a.1]

____________________________________________

1We may cite to the parties’ initial or supplemental reproduced record for the
parties’ convenience. We also cite to the reproduced record when there was
(Footnote Continued Next Page)

                                           -6-
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       Shortly before trial, Cornell Ardmore withdrew its claim against
       [Appellee] in No. 2015-11943.

       Prior to trial, it was agreed that trial would be bifurcated, with the
       three common-law claims to be tried to a jury and the three
       statutory claims to be subsequently tried non[-]jury. Jury trial
       was held on February 25 through 28, 2020. At the close of
       [Appellee’s] case-in-chief, [Appellant] moved for a compulsory
       nonsuit on the issue of its successor liability, arguing that there
       was insufficient evidence to submit to the jury the issue of its
       liability for breaches by the Cornell Defendants. The court denied
       the motion. At the close of all the evidence, [Appellant] renewed
       its argument by a motion for directed verdict, which the court also
       denied.

       After closing arguments, the charge to the jury, and the jury’s
       deliberations, the jury returned a verdict that [Appellee] had not
       proved a breach of contract but that she had proved a breach of
       express and implied warranties by Cornell Homes, LLC, and
       [Appellant], but not by Cornell Ardmore. The jury awarded
       damages for such breaches in the amount of $165,000.

       The non[-]jury phase of trial was held on November 24, 2020.[fn13]
       After briefing, the court rendered a decision on January 15, 2021.
       The court determined that Cornell Homes, LLC, committed an
       unfair or deceptive act or practice pursuant to section 2(4)(xiv) of
       the UTPCPL, 73 P.S. § 201-2(4)(xiv) (relating to failure to comply
       with a written warranty); that Cornell Homes, LLC, acted
       wrongfully but not maliciously, and therefore double, but not
       treble, damages would be awarded under section 9.2(a) of the
       UTPCPL, 73 P.S. § 201-9.2(a); and that attorney fees and costs
       would be awarded in the amount of $120,000 under the UTPCPL.
       . . . Consistent[] with the jury’s finding of successor liability

____________________________________________

no dispute as to whether a particular document was part of the certified
record.

However, we note that in the supplemental record, the face sheet for the notes
of testimony from the November 24, 2020 non-jury phase of the trial states
that the non-jury trial was held on February 24, 2020. The notes of testimony
in the certified record have the correct date on the face sheet. Based on our
review of the certified record, we discern no other typographical errors in the
notes of testimony included in the supplemental reproduced record.

                                           -7-
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       against [Appellant], the court awarded the foregoing relief against
       [Appellant] as well as Cornell Homes.
          [fn13]The non[-]jury trial was originally scheduled for late
          March 2020 but could not be held because of the COVID-19
          judicial emergency. The non[-]jury trial was conducted by
          videoconference.

Trial Ct. Op., 7/16/21, at 2-9 (some citations and footnotes omitted, and

formatting altered).

       Appellant and its co-defendants filed a timely post-trial motion, which

requested judgment notwithstanding the verdict (JNOV) and a new trial. R.R.

at 998a-1066a.       The trial court denied the post-trial motion on March 22,

2021. Judgment was entered in favor of Appellee the following day.

       Appellant filed a timely notice of appeal2 and a court-ordered Pa.R.A.P.

1925(b) statement.3 The trial court issued a Rule 1925(a) opinion addressing

Appellant’s claims.

       On appeal, Appellant raises one issue for our review:

       Whether the trial court erred in refusing to grant [Appellant’s]
       motion for directed verdict/judgment notwithstanding the verdict
____________________________________________

2As stated above, this matter began as two separate cases, but the trial court
consolidated both cases under docket number 2015-11943. See R.R. at 372a.
Therefore, Appellant’s filing of a single notice of appeal does not run afoul of
Commonwealth v. Walker, 185 A.3d 969 (Pa. 2018) or Pa.R.A.P. 341. See
Always Busy Consulting, LLC v. Babford & Co., 247 A.3d 1033, 1043-44
(Pa. 2021).

3 In its Rule 1925(b) statement, Appellant raised multiple issues that it does
not include in its brief. Therefore, we conclude that Appellant has abandoned
those issues on appeal. See Allied Envtl. Serv., Inc. v. Roth, 222 A.3d
422, 424 n.1 (Pa. Super. 2019) (stating that “[a]n issue identified on appeal
but not developed in the appellant’s brief is abandoned and, therefore,
waived” (citation omitted)).

                                           -8-
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      and in issuing its decision against [Appellant] on the issue of
      successor liability where there was no legal or factual basis to find
      that [Appellant] was a successor to Cornell Homes, LLC because,
      inter alia (A) [Appellant] did not implicitly or expressly assume
      any liability of Cornell Homes, LLC; (B) pursuant to a purchase
      agreement between [Appellant] and nonparty [Cornell Delaware],
      [Appellant] acquired some but not all of the assets of nonparty
      [Cornell Delaware] only and none of the assets or liabilities of
      Cornell Homes, LLC; and (C) the purchase agreement expressly
      excluded as an acquired asset the Waterford Walk development
      and [Appellant’s] liability relating thereto?

Appellant’s Brief at 6 (formatting altered).

      The crux of Appellant’s claim is that the trial court erred in concluding

that Appellant was a successor in liability to Cornell Homes, LLC. Id. at 23-

33. Appellant notes that, in general, when one company purchases the assets

of another, the purchaser is not liable for the debts or liabilities of the seller.

Id. at 23. Appellant acknowledges that there is an exception to this rule when

the purchaser implicitly assumes the obligations of the seller.         However,

Appellant claims that the exception is inapplicable here, as Appellant

purchased assets from Cornell Delaware, which is a separate entity from co-

defendant Cornell Homes, LLC and is not a party to this action. Id. at 23-25.

      Appellant further argues that even if the exception for implicit

assumption of liabilities applied, the trial court erred in applying Bird Hill

Farms, Inc. v. U.S. Cargo & Courier Serv., Inc., 845 A.2d 900 (Pa. Super.

2004) (Bird Hill) to the facts of this case. Id. at 26.

      Appellant asserts that “[t]here is no evidence to support a finding that

[Appellant] expressly assumed Cornell Homes, LLC’s obligations.” Id. at 25.

Appellant notes that the purchase agreement between Appellant and Cornell

                                       -9-
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Delaware, as amended, stated that Appellant was not assuming any liabilities

for Waterford Walk. Id. at 28.

      Appellant further contends that none of the three Bird Hill factors have

been established in this case. Id. at 28-32; see also Bird Hill, 845 A.2d at

905 (stating that relevant factors include “[(1)] whether the successor’s

conduct indicated its intention to assume the debt; [(2)] whether the creditor

relied on the conduct and the effect of any reliance; and [(3)] whether the

successor’s representatives admitted liability”).

      First, Appellant asserts that it did not assume the operations of Cornell

Homes, LLC when it entered into the services agreement with Cornell

Delaware. Id. at 29. Second, Appellant contends that there is no evidence

that Appellee relied on Appellant’s purported assumption of Cornell Homes’

operations. Id. at 30-31. Third, Appellant claims that it has not admitted

liability. Id. at 31-32. Therefore, Appellant concludes that the trial court

erred in its application of Bird Hill to the facts of this case.

      When reviewing an order resolving a post-trial motion for JNOV, our

standard of review is as follows:

      A JNOV can be entered upon two bases: (1) where the movant is
      entitled to judgment as a matter of law; and/or, (2) the evidence
      was such that no two reasonable minds could disagree that the
      verdict should have been rendered for the movant.           When
      reviewing a trial court’s denial of a motion for JNOV, we must
      consider all of the evidence admitted to decide if there was
      sufficient competent evidence to sustain the verdict. In so doing,
      we must also view this evidence in the light most favorable to the
      verdict winner, giving the victorious party the benefit of every
      reasonable inference arising from the evidence and rejecting all

                                      - 10 -
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      unfavorable testimony and inference. Concerning any questions
      of law, our scope of review is plenary. Concerning questions of
      credibility and weight accorded the evidence at trial, we will not
      substitute our judgment for that of the finder of fact. If any basis
      exists upon which the [trial court] could have properly made its
      award, then we must affirm the trial court’s denial of the motion
      for JNOV. A JNOV should be entered only in a clear case.

Wag-Myr Woodlands Homeowners Ass’n v. Guiswite, 197 A.3d 1243,

1252 (Pa. Super. 2018) (Wag-Myr Woodlands) (citation omitted).

      Our Supreme Court has explained that JNOV

      should only be entered in a clear case with any doubts resolved in
      favor of the verdict winner. An appellate court “stands on a
      different plane” than a trial court, and it is the trial court that has
      the benefit of an “on-the-scene evaluation of the evidence.” As
      such, while the appellate court may disagree with a verdict, it may
      not grant a motion for JNOV simply because it would have come
      to a different conclusion. Indeed, the verdict must stand unless
      there is no legal basis for it.

Menkowitz v. Peerless Publications, Inc., 211 A.3d 797, 804 (Pa. 2019)

(citations omitted).

      The following standard of review applies to our review of the trial court’s

denial of a motion for a new trial:

      We will reverse a trial court’s decision to deny a motion for a new
      trial only if the trial court abused its discretion. We must review
      the court’s alleged mistake and determine whether the court erred
      and, if so, whether the error resulted in prejudice necessitating a
      new trial. If the alleged mistake concerned an error of law, we
      will scrutinize for legal error. Once we determine whether an error
      occurred, we must then determine whether the trial court abused
      its discretion in ruling on the request for a new trial.

Carlini v. Glenn O. Hawbaker, Inc., 219 A.3d 629, 643 (Pa. Super. 2019)

(citation omitted). Further, this Court may affirm the decision of the trial court

                                      - 11 -
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on any valid grounds.    See generally Liberty Mut. Ins. Co. v. Domtar

Paper Co., 77 A.3d 1282, 1286 (Pa. Super. 2013) (stating that “an appellate

court may affirm a trial court’s decision on any grounds supported by the

record on appeal” (citation omitted)).

      Under Pennsylvania jurisprudence, a successor company is not
      responsible for its predecessor’s liabilities unless one of the
      following conditions is established: (1) the successor company
      expressly or impliedly agreed to assume the obligations; (2) the
      transaction was a consolidation or merger; (3) the successor
      company merely was a continuation of the selling corporation; (4)
      the transaction was a fraudulent attempt to escape liability; or (5)
      the transfer lacked adequate consideration and no provisions were
      made for creditors of the predecessor.

Bird Hill, 845 A.2d at 905 (citations omitted and emphasis in original).

“Whether an entity implicitly assumed the obligations and liabilities of another

entity is a question of law, albeit one that is dependent on the facts relating

to [the successor’s] conduct.” Id. at 903.

      In Bird Hill, Courier Unlimited, Inc. (Courier) leased commercial

property from the plaintiff, Bird Hill Farms. Id. at 902. Courier then entered

into an asset purchase agreement with the defendant, U.S. Cargo.             Id.

Courier began negotiating to assign its lease with Bird Hill Farms to the

defendant.    Id.   While those negotiations were pending, the defendant

conducted business operations in the leased property and paid rent to Bird Hill

Farms. Id. However, Bird Hill Farms never assigned the lease from Courier

to the defendant. Id. Eventually, the defendant vacated the property without

notice. Id. When Bird Hill Farms sued the defendant for violating the lease,

                                     - 12 -
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the trial court concluded that the defendant had implicitly assumed Courier’s

lease under the principles of corporate successor liability. Id.

      The Bird Hill Court explained:

      Our review of the case law has not identified an authoritative case
      addressing an implicit assumption, and other jurisdictions
      confronting this issue have reached different results.

      In determining whether a successor corporation implicitly
      assumed an obligation of its predecessor, the following factors are
      relevant: [(1)] whether the successor’s conduct indicated its
      intention to assume the debt; [(2)] whether the creditor relied on
      the conduct and the effect of any reliance; and [(3)] whether the
      successor’s representatives admitted liability.

      The trial court applied similar factors to the case sub judice and
      summarized its determination as follows:

         This court finds that because [the defendant] occupied the
         premises, paid rent directly to the landlord and paid the
         utilities in its own name, maintained the property, and
         conducted business from the site for eleven months, [it]
         assumed Courier’s lease with Bird Hill farms and is bound
         by the consequences of its breach of the lease obligations.

      The trial court reasoned that under these facts, [the defendant]
      was a successor-in-interest to the lease.

      Mindful of the above-noted factors and in light of the trial court’s
      express rationale, we affirm the trial court’s conclusion. [The
      defendant’s] conduct toward [the plaintiff] and the leased
      premises indicated an intent to assume the lease. [The plaintiff]
      relied on [the defendant’s] actions and suffered damages when
      [the defendant] abandoned the building without notice. Hence,
      despite [the defendant’s] assertion to the contrary, it impliedly
      assumed Courier’s obligation under the lease.

Id. at 905-06 (citations omitted).     The Bird Hill Court did not explicitly

address the third factor concerning whether the defendant’s representatives

had admitted liability. Id.

                                     - 13 -
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        Here, Appellee entered into an agreement with Cornell Ardmore to

purchase a townhome that was to be built as part of the Waterford Walk

development. See S.R.R. at 21b, 138b-39b. Prior to Appellant’s purchase

agreement with Cornell Delaware, Cornell Homes, LLC was the builder for

Waterford Walk.     Cornell Homes, LLC provided employees to work on the

development via a service agreement with Cornell Ardmore, which owned the

real property.     See id. at 118b-20b, 133b, 138b, 167b, 1246b.          After

Appellant purchased many of Cornell Delaware’s assets, Appellant entered into

a services agreement with Cornell Delaware. See id. at 110b-12b; 1140b-

41b.    The services agreement provided that Appellant’s employees would

render services at Cornell developments that were not covered by the

purchase agreement, which included Waterford Walk. See id. at 110b-12b,

528b.

        At trial, Mr. McSorley explained that although Appellant entered into a

service agreement with Cornell Delaware, which was not a party to the action,

Cornell Homes, LLC was covered by the agreement because Cornell Delaware

owns Cornell Homes, LLC.      See id. at 143b-44b.     Further, the agreement

permitted Appellant’s employees to represent themselves as Cornell Homes,

LLC employees. See id. at 110b-11b, 113b, 426b-27b, 976b; see also id.

at 541b-44b (reflecting that Appellant licensed the brand name “Cornell

Homes” from Cornell Delaware). Matt Egan and John Kildea were employees

of Cornell Homes, LLC who became Appellant’s employees. See id. at 751b-

52b, 1141b. Both were responsible for completing the work at Waterford Walk

                                     - 14 -
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in their capacity as Appellant’s employees. See id. at 149b, 425b-27b, 531b-

34b, 759b-60b, 796b-97b, 1141b.

      Ultimately, the trial court concluded that there was sufficient evidence

to conclude that Appellant implicitly assumed the liabilities of the Cornell

entities. In reaching this conclusion, the trial court considered the actions of

Appellant’s employees and Appellee’s testimony at trial.

      Specifically, the trial court explained:

      The reasoning of Bird Hill applies to the present case. The
      evidence supports the inference that although [Appellant] did not
      acquire Waterford Walk, it still assumed responsibility for the
      operations of the Waterford Walk development, including the
      completion of construction. [Appellant] entered into the services
      agreement to operate the Waterford Walk development,
      essentially taking over the relevant Cornell companies’
      obligations, even while avoiding ownership of a property that
      raised concerns of environmental or related liability. [Appellant]
      did so in consideration for its acquisition of other Cornell
      developments and in order to preserve and control the value of
      the “Cornell Homes” name that it had purchased. Pursuant to the
      services agreement, [Appellant’s] employees oversaw the ongoing
      construction of [Appellee’s] home and the responses to
      [Appellee’s] complaints of defects in the home. [Appellant] did so
      through James Kildea and Matthew Egan, formerly employed by
      Cornell Homes, LLC. Further, [Appellee] proceeded with the
      transaction in reliance on the understanding, as conveyed by Ms.
      Zefferino, that the home construction was now backed by
      [Appellant], a large, reputable company. This understanding was
      reinforced by repeated conflation of the Cornell and [Appellant]
      names in email communications from Waterford Walk
      representatives.

      These facts, based on the evidence at trial, were sufficient to
      support the jury’s finding that [Appellant] implicitly assumed the
      obligations of the Cornell Defendants to [Appellee], pursuant to
      the holding in Bird Hill. As in Bird Hill, the asset purchaser could
      not rely on non-assumption language in the purchase agreement
      when its own conduct after the purchase showed that it was

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     assuming the obligations of the seller. Just as [the defendant in
     Bird Hill] enjoyed the benefits of Courier’s lease by continuing to
     occupy the premises, so did [Appellant] benefit from its
     completion of Waterford Walk operations by the protection of its
     investment in the “Cornell Homes” name and goodwill that it had
     purchased and by its acquisition of the employees charged with
     operating that development.

     It is true that the purchase agreement between [Appellant] and
     [Cornell Delaware], dated May 23, 2013, provided that [Appellant]
     was assuming only specified “Assumed Liabilities” and was not
     assuming “any Liability arising from the Excluded Assets” and that
     the subsequent amendment no. 8, dated July 15, 2013, added
     Waterford Walk to the list of excluded assets. But the original
     services agreement, under which [Appellant] assumed
     responsibility for the operation of Waterford Walk, was dated three
     days later, July 18, 2013, so to the extent that it is in conflict with
     amendment no. 8, the later document would govern. In any
     event, Bird Hill makes clear that the purchaser’s conduct after
     the purchase can result in an implied assumption of liability, even
     if the purchase agreement contains language disclaiming any such
     assumption. Finally, the jury could find from the evidence that
     [Appellant’s] exclusion of Waterford Walk from the purchased
     assets, in order to avoid liability for “environmental and/or other
     concerns”, while still assuming responsibility for the operation of
     the development, was a contractual sleight-of-hand that obscured
     the reality of the allocation of responsibility between the parties
     to the purchase.

     This analysis does not address which [of the] Cornell companies’
     obligations were impliedly assumed by [Appellant], but a
     concession made by defense counsel at trial makes such an
     analysis unnecessary. Prior to the jury trial, pursuant to direction
     of the court to agree upon the points for charge to the jury, the
     parties filed Proposed Joint Points for Charge (Seq. 208). During
     the charge conference near the end of the jury trial, the court
     noted that the joint proposal repeatedly used the term “Cornell
     Defendants,” without distinguishing between Cornell Ardmore and
     Cornell Homes, LLC (or, indeed, any other Cornell entities). The
     court specifically inquired whether defense counsel wanted the
     court to distinguish between the two Cornell Defendants in the
     charge to the jury, and defense counsel expressly stated that it
     was not necessary to do so.

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     Accordingly, the court substantially adopted the agreed points for
     charge and did not distinguish between the “Cornell Defendants”
     in charging the jury. By returning a verdict for breach of
     warranties against Cornell Homes, LLC, and [Appellant], the jury
     necessarily found that [Appellant] was liable as successor to
     Cornell Homes, LLC. In view of the position it took at trial,
     [Appellant] cannot now argue that the jury found (or was
     permitted to find) that [Appellant] was successor to the “wrong”
     Cornell entity.

     In short, under Bird Hill, the evidence was sufficient to submit to
     the jury the issue of [Appellant’s] successor liability and to support
     the jury’s verdict against [Appellant] for the liability of Cornell
     Homes, LLC.

                                  *     *      *

     There is no dispute that [Appellant] itself never gave any
     warranties, express or otherwise, directly to [Appellee]. There is
     also no dispute that Cornell Homes, LLC, did issue express
     warranties to [Appellee]. Further, as a home builder, Cornell
     Homes, LLC, gave [Appellee] an implied warranty of reasonable
     workmanship — i.e., that the home is constructed in a reasonably
     workmanlike manner and that it is fit for its intended purpose.
     See Elderkin v. Gaster, 288 A.2d 771, 777 (Pa. 1972). Finally,
     there was ample evidence, discussed above, to support the jury’s
     finding that these warranties were breached.

     Although [Appellant] itself did not make these express and implied
     warranties, the jury found (and the [c]ourt agreed) that
     [Appellant] assumed the liability of Cornell Homes, LLC, for breach
     of warranty under the Bird Hill standard.

Trial Ct. Op. at 11-16 (some citations and footnotes omitted).

     Based on our review of the record, we agree with the trial court that

Appellant’s conduct indicated its intent to assume the liabilities of Cornell

Homes, LLC.    See Bird Hill, 845 A.2d at 905.        Appellant entered into a

services agreement to provide employees to oversee the completion of

Waterford Walk, including Appellee’s home, an obligation imposed on Cornell

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Homes, LLC pursuant to its own services agreement with Cornell Ardmore.

Therefore, the trial court correctly concluded that the first Bird Hill factor

weighed against Appellant.4

       The record also reflects that Appellee relied on Appellant’s conduct when

she proceeded with the purchase of her home. As noted by the trial court,

Appellee testified that after receiving the July 19, 2013 announcement that

Appellant had acquired Cornell Homes, she believed that Appellant would

finish building her home. See S.R.R. at 239b. Appellee further stated that

although she had some problems with Cornell Homes, she chose to move

forward with the purchase of her home because Appellant, “a reputable public

company[,] was now behind” the construction of Waterford Walk. See id. at

240b-41b.      Although Appellant claims that Appellee’s testimony was not

credible, this Court may not substitute our judgment for that of the finder of

fact. See Wag-Myr Woodlands, 197 A.3d at 1252. Therefore, we agree

with the trial court that the second Bird Hill factor weighs against Appellant.

See Bird Hill, 845 A.2d at 905.

       Finally, we note that the trial court did not address the third Bird Hill

factor concerning whether Appellant’s representatives admitted liability.

____________________________________________

4 However, we disagree with the trial court’s conclusion that Appellant waived
its claim as to which of Cornell company’s obligations Appellant had implicitly
assumed. Nevertheless, for the reasons stated above, we conclude that the
evidence, viewed in the light most favorable to Appellee as the verdict winner,
established that Appellant intended to assume the obligations of Cornell
Homes, LLC. See Liberty Mut., 77 A.3d at 1286 (stating that this Court may
affirm on any valid basis supported by the record).

                                          - 18 -
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However, Bird Hill did not require all three factors to be present in order to

find successor liability, nor did it address how much weight had to be afforded

to each factor. See id. at 905-06. Indeed, the Bird Hill Court did not discuss

the third factor at all when it found that the defendant had assumed the lease

of its predecessor. See id. at 906. Therefore, although Appellant claims that

the third factor weighs in its favor, it is not entitled to relief.

      For these reasons, notwithstanding any disclaimer of liability in the

agreements between Appellant and Cornell Delaware, we conclude that

Appellant implicitly assumed the liabilities of Cornell Homes, LLC with respect

to Appellee. See id. at 905-06. Therefore, we affirm the trial court’s denial

of Appellant’s motion for JNOV and its motion for a new trial.              See

Menkowitz, 211 A.3d at 804; Carlini, 219 A.3d at 643; Wag-Myr

Woodlands, 197 A.3d at 1252.            Accordingly, we affirm the trial court’s

judgment in favor of Appellee.

      Judgment affirmed.

Judgment Entered.

Joseph D. Seletyn, Esq.
Prothonotary

Date: 5/12/2022

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