Court Opinion

ID: 2774327
Source: CourtListenerOpinion
Date Created: 2015-01-29 00:06:04.25808+00
Date Added: 2024-06-11T11:27:53.819666
License: Public Domain

J-A31024-14

NON-PRECEDENTIAL DECISION - SEE SUPERIOR COURT I.O.P. 65.37

ANGINO & ROVNER, PC, KING DRIVE                 IN THE SUPERIOR COURT OF
CORP., A LA CARTE ENTERPRISES,                        PENNSYLVANIA
RICHARD C. ANGINO & ALICE K.
ANGINO

                            Appellants

                       v.

SANTANDER BANK, N.A., WEIR
PARTNERS, LLP, AND
CUSHMAN & WAKEFIELD NATIONAL
CORPORATION

                                                     No. 489 MDA 2014

               Appeal from the Order Entered February 19, 2014
                In the Court of Common Pleas of Berks County
                        Civil Division at No(s): 13-1563

BEFORE: BOWES, J., OTT, J., and STABILE, J.

MEMORANDUM BY OTT, J.:                            FILED JANUARY 28, 2015

        Angino & Rovner, PC, King Drive Corp., A La Carte Enterprises, Richard

C. Angino & Alice K. Angino (collectively “the Anginos”) bring this appeal

from the order entered on February 19, 2014, in the Court of Common Pleas

of Berks County, sustaining the preliminary objections of Santander Bank,

N.A. (“Bank”) and Weir and Partners, LLP (“W & P”)1, and dismissing the

____________________________________________

1
    Weir and Partners, LLP is Bank’s counsel.
J-A31024-14

Anginos’ Amended Complaint with prejudice.2         In this appeal, the Anginos

raise the following questions, which we quote:

       1.     Does there exist a duty of good faith and fair dealing in the
              lender/lendee context in Pennsylvania in certain situations?

       2.     Do the factual averments in the Amended Complaint and
              the supporting documents state a claim of breach of
              contract under the duty of care and fair dealing in the
              lender/lendee context under the special situation
              exception?

       3.     Do the factual averments in [the Anginos’] Amended
              Complaint and the supporting documents evidence state a
              claim for breach of contract under the reasonable
              expectations doctrine?

       4.     Do the factual averments in [the Anginos’] Amended
              Complaint and the supporting documents evidence state a
              claim for breach of contract under the defense of
              impracticability?

       5.     Do the factual averments in [the Anginos’] Amended
              Complaint and the supporting documents evidence state a
              claim for breach of contract under waiver and/or estoppel.

____________________________________________

2
  On June 25, 2013, the trial court sustained the preliminary objections of
defendant, Cushman and Wakefield National Corporation (“Cushman and
Wakefield”), and dismissed the complaint against Cushman and Wakefield
with prejudice. After the Anginos took this appeal from the June 25, 2013
and February 19, 2014 orders, Cushman and Wakefield filed an Application
to Dismiss Appeal, contending the Anginos had failed to preserve issues as
to the June 25, 2013 Order in their Pa.R.A.P. 1925(b) statement. On
October 9, 2014, this Court quashed the Anginos’ appeal from the June 25,
2013 Order pursuant to Pa.R.A.P. 1972(a)(5), finding that the Anginos’
Pa.R.A.P. 1925(b) statement failed to preserve any issues related to that
Order, and dismissed the appeal as to Cushman and Wakefield. See Order,
10/9/2014.

                                           -2-
J-A31024-14

       6.     Do the factual averments in [the Anginos’] Amended
              Complaint and the supporting documents state a claim for
              which relief may be granted with respect to [Bank’s]
              breach of its contract by refusing to renew approximately
              $730,000 of irrevocable letters of credit which were an
              integral part of the 2007 Mockingbird/Mockingbird
              Extended Construction Loan and although renewing the
              Willow Lake 2005 Letter of Credit of $94,252.10 refusing
              to honor same?

       7.     Do the factual averments in [the Anginos’] Amended
              Complaint and supporting documents state a claim for
              which relief may be granted with respect to [Bank’s]
              breach of contract by refusing to accept [the Anginos’]
              option to extend the security agreement with respect to
              the   Mockingbird/Mockingbird   Extended   Construction
                                                  [3]
              Development Loan from 2009 to 2010?

       8.     Do the facts as pleaded and the supporting exhibits state a
              claim for which relief may be granted under the tort of civil
              conspiracy?

       9.     Do the facts as pleaded and the supporting exhibits state a
              claim for which relief may be granted under the tort of
              defamation?

       10.    Do the facts as pleaded and the supporting exhibit state a
              claim for which relief may be granted under the tort of
              fraud?

       11.    Are [the Anginos’] tort claims not barred by the gist of
              action doctrine?

____________________________________________

3
  We note that the Anginos do not present a separate argument in their brief
regarding this issue. Therefore, we will not consider it. See Bolick v.
Commonwealth, 69 A.3d 1267, 1269 (Pa. Super. 2013), appeal denied, 84
A.3d 1061 (Pa. 2014) (finding issue waived pursuant to Pa.R.A.P. 2119(a)
because appellant failed to present an argument in support of the issue).

                                           -3-
J-A31024-14

The Anginos’ Brief, at 5–6. In addition, although not listed in the Statement

of Questions Involved, the Anginos’ argument section separately addresses

the following issue: “Plaintiffs have pleaded sufficient factual claims to set

forth a cognizable claim for intentional infliction of emotional distress”. 4 See

id. at 42–43, Argument H. Based upon the following, we affirm.

       The Honorable Jeffrey K. Sprecher has ably stated the facts of this

case in his Pa.R.A.P. 1925(a) opinion, which we reiterate as follows:

              The following are the procedural facts:

             On February 1, 2013, plaintiffs filed their original complaint
       against Weir & Partners LLP (W & P), Cushman & Wakefield
       National Corporation (Cushman & Wakefield), and Santander
       Holdings USA, Inc. (SHUSA), the holding company of Sovereign,
       now Santander (Bank). All three defendants filed preliminary
       objections. On May 30, 2013, the parties stipulated to dismiss
       SHUSA with prejudice as a defendant, that Bank would be added
       as the proper defendant, and that SHUSA’s preliminary
       objections would continue to be advanced on Bank’s behalf. On
       June 25, 2013, Judge Schmehl sustained the preliminary
       objections of the three defendants. Cushman & Wakefield was
       dismissed with prejudice, and plaintiffs were granted leave to file
       an amended complaint against the remaining defendants.

             On July 11, 2013, plaintiffs filed an amended complaint
       with very similar allegations. W & P and Bank filed preliminary
____________________________________________

4
  We note that the Anginos include this issue in the Table of Contents. See
The Anginos Brief at ii. However, failure to include the issue in the
Statement of Questions Involved violates Pa.R.A.P. 2116(a) (“No question
will be considered unless it is stated in the statement of questions involved
or is fairly suggested thereby.”). Nevertheless, we decline to find waiver as
“nothing substantially impedes our ability to review appellant[s’]
argument[].” Rock v. Meakem, 61 A.3d 239, 249 (Pa. Super. 2013),
appeal denied, 80 A.3d 778 (Pa. 2013).

                                           -4-
J-A31024-14

     objections which this court sustained, and this court dismissed
     with prejudice the complaint against the remaining defendants.

           The pertinent facts gleaned from the record are as follows.

            Plaintiff, Richard C. Angino, is an attorney. He and his wife,
     Alice K. Angino, are the sole owners of plaintiffs King Drive
     Corporation and A La Carte Enterprises. These businesses are for
     residential land development and the operation of Felicita Resort.
     Plaintiff, Angino & Rovner, P.C., is Mr. Angino’s law firm.

           The Anginos are sophisticated borrowers and land
     developers. From 1971 through 2007, they invested an average
     of $1 million per year and borrowed $10 million to $12 million
     per year for a total investment of more than $50 million. Before
     2004 they used Wells Fargo for their banking needs. In 2004,
     they entered into a series of loan transactions with Waypoint
     Bank, Bank’s predecessor, and Bank: (1) a loan made by
     Waypoint Bank to King Drive on October 29, 2004, in the original
     principal amount of $1,400,000.00; (2) a loan made by Bank to
     King Drive on September 2, 2005, in the original principal
     amount of $94,252.10; (3) a site development loan made by
     Bank to King Drive on July 3, 2007, in the original principal
     amount of $2,000,000.00; (4) a mortgage loan made by Bank to
     King Drive on November 28, 2007, in the original principal
     amount of $3,500,000.00; (5) a line of credit made by Bank to
     King Drive on November 28, 2007, in the original principal
     amount of $750,000.00; and (6) a line of credit made by Bank
     to A La Carte dated November 28, 2007, in the original principal
     amount of $750,000.00. The loans contained one, two, and
     three year maturity dates.

           Plaintiffs allege in their amended complaint that from 2004
     through 2008, Bank automatically renewed plaintiffs’ loans and
     lines and letters of credit despite plaintiffs’ inability to sell the
     requisite number of lots referenced in the financial documents.
     In 2007, the residential housing market collapsed, and plaintiffs
     were unable to sell the lots at the sales pace required in the loan
     documents. In 2008, plaintiffs wanted to borrow additional funds
     from Bank but were denied, because the lines were failing to
     generate the anticipated cash flow. Plaintiffs contend that
     beginning in 2008, Bank commenced a plan to divest itself of
     residential loans, lines of credit, and letters of credit by changing
     its prior practice of waiving compliance with the technical

                                     -5-
J-A31024-14

     contract terms, including time and lot sales, and refusing to
     continue payments under its lines and letters of credit
     commitments.

            By mid-2009, plaintiffs were in default of the loan
     documents for failing to sell lots at the required sales pace. Bank
     offered to modify the loans to extend the maturity dates, but
     plaintiffs refused this offer.

           Bank notified plaintiffs on March 24, 201[0], that they
     were in default of the loans. [On May 5, 2010,] W & P, Bank’s
     counsel, sent plaintiffs a letter advising that the loans were
     immediately due and payable. On July 14, 2011, Bank entered
     into a Loan Modification agreement. The Modification extended
     the maturity dates for the loans, modified the interest rates, and
     required additional security for the loans. Plaintiffs released all
     claims against the Bank, its employees, officers, directors,
     agents, representatives, attorneys, consultants, and advisors.
     The Modification was negotiated by all of the plaintiffs and their
     counsel, and defendants.

           Plaintiffs were unable to make the required June 30, 2012
     principal payment of $500,000.00; therefore, on July 19, 2012,
     Bank agreed to amend the Loan Modification under the terms of
     the First Amendment which plaintiffs and their legal counsel
     approved and executed. This amendment, inter alia, reduced the
     amount of June 30, 2012 principal payment and provided
     additional time for payment. Under the terms of this
     amendment, plaintiffs released all claims again against
     defendants.

          Plaintiffs were again unable to make the principal payment
     due on December 31, 2012. Bank again agreed to amend the
     loan for a second time. Under the terms of the Second
     Amendment, plaintiffs again released all claims.

           Plaintiffs requested that Bank make payments to them
     under letters of credit. Bank refused because plaintiffs were not
     the named beneficiaries and, therefore, not entitled to payment.
     Furthermore, under the terms of the Loan Modification, no
     further advances were permitted. Moreover, two of the letters of
     credit had expired prior to the extension of the Modification
     agreement and were not renewed.

                                    -6-
J-A31024-14

           Plaintiffs amended complaint contains six causes of action,
     but within each cause of action are several claims. Defendants
     filed preliminary objections to the amended complaint. After
     argument and a review of the record, this court sustained
     defendants’ preliminary objections. Plaintiffs did not substantially
     amend the complaint against these defendants in any salient
     manner, so this court dismissed the amended complaint against
     defendants with prejudice. Plaintiffs filed a timely appeal.

                                          …

            This court ordered plaintiffs to file a Concise Statement of
     Errors Complained of on Appeal. Plaintiffs complied with this
     directive; however, this court notes that plaintiffs’ statement
     consists of sixteen pages with five attached exhibits, so it is far
     from concise. …

Trial Court Opinion, 5/13/2014, at 1–5.

     At the outset, we state our standard of review:

     The standard of review we apply when reviewing a trial court’s
     order granting preliminary objections in the nature of a demurrer
     is as follows:

         Our standard of review of an order of the trial court
         overruling or granting preliminary objections is to
         determine whether the trial court committed an error of
         law. When considering the appropriateness of a ruling on
         preliminary objections, the appellate court must apply the
         same standard as the trial court.

         Preliminary objections in the nature of a demurrer test
         the legal sufficiency of the complaint. When considering
         preliminary objections, all material facts set forth in the
         challenged pleadings are admitted as true, as well as all
         inferences reasonably deducible therefrom. Preliminary
         objections which seek the dismissal of a cause of action
         should be sustained only in cases in which it is clear and
         free from doubt that the pleader will be unable to prove
         facts legally sufficient to establish the right to relief. If
         any doubt exists as to whether a demurrer should be
         sustained, it should be resolved in favor of overruling the
         preliminary objections.

                                     -7-
J-A31024-14

Feingold v. Hendrzak, 15 A.3d 937, 941 (Pa. Super. 2011) (citation

omitted).

      In the first two issues, the Anginos assert that there exists a duty of

good faith and fair dealing in the lender/lendee context in Pennsylvania in

certain situations, and that the Amended Complaint states a valid cause of

action.

      The duty of good faith and fair dealing in Pennsylvania was addressed

in Cable & Assocs. Ins. Agency v. Commercial Nat'l Bank,                 875 A.2d
361 (Pa. Super. 2005):

      In Creeger Brick & Bldg. Supply, Inc. v. Mid-State Bank
      and Trust, 385 Pa. Super. 30, 560 A.2d 151 (Pa. Super.
      1989), we explained the legal concept of “good faith” with
      regard to the law of contracts in the following fashion:

            Section 205 of the Restatement (Second) of Contracts
            suggests that “every contract imposes upon each party a
            duty of good faith and fair dealing in its performance and
            its enforcement.” A similar requirement has been
            imposed upon contracts within the Uniform Commercial
            Code by 13 Pa.C.S. § 1203. The duty of “good faith” has
            been defined as “honesty in fact in the conduct or
            transaction concerned.” See: 13 Pa.C.S. § 1201;
            Restatement (Second) of Contracts § 205, Comment a.
            Where a duty of good faith arises, it arises under the law
            of contracts, not under the law of torts. AM/PM
            Franchise Association v. Atlantic Richfield Co., 373
Pa. Super. 572, 579, 542 A.2d 90, 94 (1988); [see also]
            Clay v. Advanced Computer Applications, Inc., 370
Pa. Super. 497, 505 n. 4, 536 A.2d 1375, 1379 n. 4
            (1988), allocatur granted, 518 Pa. 647, 544 A.2d 959
            (1988).

      Creeger, 560 A.2d at 153.

                                      -8-
J-A31024-14

      The courts of this Commonwealth have, in addition to the
      general contractual concept of “good faith,” recognized a duty of
      “good faith” inherent in certain types of legal relationships, such
      as insurer and insured. Creeger, 560 A.2d at 153. Such an
      inherent duty of good faith does not extend to the lender-
      borrower relationship. Id., 560 A.2d at 154. As we explained in
      Creeger, a lending institution does not violate a separate duty
      of good faith by adhering to its agreement with the borrower or
      by enforcing its legal and contractual rights as a creditor. Id.,
      560 A.2d at 154. However, a borrower may plead sufficient facts
      to make out a claim that a lender violated its general duty of
      “good faith” arising out of the law of contracts. See, e.g.,
      Corestates Bank, N.A. v. Cutillo, 1999 Pa. Super. 14, 723 A.2d
1053 (Pa. Super. 1999). Therefore, the creation of a separate
      duty of good faith between lender and borrower is unnecessary
      due to the existence of this “good faith” cause of action sounding
      in contract, as well as the existence of other causes of action
      such as fraud, slander, or interference with prospective
      contractual relations, which sound in tort. Creeger, 560 A.2d at
      154.

      A party proceeding on the theory that a lender violated its
      contractual duty of good faith must demonstrate more than the
      fact that a lender negotiated terms of a loan which are favorable
      to itself. Creeger, 560 A.2d at 154. Further, the duty of good
      faith imposed upon contracting parties does not compel a lender
      to surrender rights granted by statute or conferred to the lender
      by the terms of the loan contract. Id., 560 A.2d at 154. As such,
      a lender generally is not liable for harm caused to a borrower by
      refusing to advance additional funds, release collateral, or assist
      in obtaining additional loans from third persons. Id., 560 A.2d at
      154.

Id. at 364.

      Here, the trial court rejected the Anginos’ claim that the Amended

Complaint stated a cause of action for breach of the duty of good faith and

fair dealing, stating:

             Plaintiffs’ third assertion is that the amended complaint is
      legally sufficient to state a claim for a breach of the duty of good
      faith and fair dealing. This contention fails and must be

                                     -9-
J-A31024-14

      dismissed. Plaintiffs cite cases in which the court held or in dicta
      stated that a duty of good faith and fair dealing can be breached
      by a party; however, plaintiffs’ cases are inapposite to the
      instant case. Plaintiffs and Bank have a relationship of borrowers
      and lender. A lending institution does not violate a duty of good
      faith by adhering to its agreement with the borrower or by
      enforcing its legal and contractual rights against a creditor.
      Creeger Brick and Building Supply Inc. v. Mid State Bank
      and Trust Company, 385 Pa. Super. 30, 560 A.2d 151 (1989).
      In the case at bar, Bank simply adhered to the parties’
      agreement and enforced its legal rights as plaintiffs’ creditor.

Trial Court Opinion, 5/13/2014, at 7.     We agree with the court’s analysis.

Moreover, Corestates Bank, N.A. v. Cutillo, 723 A.2d 1053 (Pa. Super.

1999), relied upon by the Anginos, is distinguishable.

      In Corestates Bank, N.A., appellant borrower was sued by lender to

collect a debt owed following appellant’s default under a loan agreement.

The borrower counterclaimed, alleging, inter alia, the lender’s “failure to deal

in good faith.” Id. at 1058.      The counterclaim set forth the following

averments:

      For an extended period of time, [appellant] dealt with [the Bank]
      almost exclusively with regard to the financial needs of
      [appellant] and of [appellant’s] various commercial enterprises.

      Over the course of 19 years, [appellant] established              a
      relationship with [the Bank] of trust and reliance.

      By way of refusing to satisfy numerous outstanding mortgages
      which were in amounts greatly in excess of the borrowings of
      [appellant] from [the Bank], and by refusing to advance the
      $50,000.00 promised by [the Bank] to [appellant] in
      consideration for the $50,000.00 Mortgage obtained by [the
      Bank] from [appellant], [the Bank] breached its duty to
      [appellant] to deal in good faith in the various business
      transactions entered into by the parties.

                                     - 10 -
J-A31024-14

Id. at 1059. The trial court granted the bank’s preliminary objections to the

counterclaim. On appeal, a panel of this Court reversed the trial court,

stating:

      In Pennsylvania, the duty of good faith has been recognized in
      limited situations. Creeger Brick & Building Supply, Inc. v.
      Mid-State Bank & Trust, 385 Pa. Super. 30, 560 A.2d 151
      (1989). While a lending institution does not violate a separate
      duty of good faith by adhering to its agreements with a borrower
      or enforcing its contractual rights as a creditor, see id. 560 A.2d
      at 154, due to the longstanding relationship between the parties
      in this case, we cannot say that the parties have not, as a
      matter of law, developed a relationship wherein the Bank owes
      appellant a duty of good faith.

Id. at 1059.

      The Anginos claim that the holding in Corestates Bank, N.A.

supports its position that a valid claim exists in this case for breach of the

duty of good faith and fair dealing.      We disagree and find the Anginos’

reliance on Corestates Bank, N.A., to be misplaced.

      In Corestates Bank, N.A., when the borrower counterclaimed against

the lender, the borrower expressly pleaded lender’s breach of duty of good

faith in failing to perform its oral promise to lend the borrower $50,000,

after the lender executed a mortgage in favor of the lender pursuant to the

parties’ agreement. Such is not the case here.

      In the present case, the averments of the Amended Complaint do not

establish anything other than Bank’s decision to enforce its legal and

contractual rights against the Anginos.      As such, the Amended Complaint

fails to allege the existence of facts and circumstances to support a claim for

                                    - 11 -
J-A31024-14

breach of the implied covenant of good faith and fair dealing.     See Cable &

Assoc. Ins. Agency, supra at 364 (“[A] lender generally is not liable for

harm caused to a borrower by refusing to advance additional funds, release

collateral, or assist in obtaining additional loans from third persons.”).

Accordingly, the trial court properly determined that the Amended Complaint

failed to state a claim for a breach of the duty of good faith and fair dealing.

      Next, the Anginos claim that the Amended Complaint and referenced

documentary exhibits state a theory of recovery for breach of contract under

the reasonable expectation doctrine.    According to the Anginos:

      The averments in [the Anginos’] Amended Complaint and
      referenced exhibits clearly provide a theory of recovery based
      upon the parties’ reasonable expectations as detailed in an
      exchange of communications from 2002 through 2004, including
      [the Anginos’] submission in 2004 of its long-range plan to
      develop a green sustainable multi-use community.

      The Restatement (Second) of Contracts § 211 standardized
      agreement provides that in construing and applying a
      standardized contract, the construction must effectuate the
      reasonable expectation of the average member of the public who
      accepts it. It is clear from the averments in the Amended
      Complaint and the documents attached as exhibits that the
      reasonable expectations of the parties were to extend beyond
      the one year maturity dates of lines and letters of credit and two
      year maturity dates of the documents themselves and even
      beyond the “pacing” requirements of the documents. The
      “pacing” requirements of three per year for Willow Lake would
      require at least four to five years to sell the remaining 13 or 14
      lots.   The “pacing” requirement for Mockingbird/Mockingbird
      Extended of five lots per year would also require at least five to
      six years to sell 28 lots. The $200,000 annual payments toward
      principal for the $5,000,000 mortgage and two lines of credit
      necessitated 25 years for total payment of principal.

The Anginos’ Brief, at 31-32. This argument is unavailing.

                                     - 12 -
J-A31024-14

      “[A] party may not claim its reasonable expectations are inconsistent

with clear contract language.” Gustine Uniontown Associates, Ltd. ex

rel. Gustine Uniontown, Inc. v. Anthony Crane Rental, Inc., 892 A.2d
830, 837 (Pa. Super. 2006). Here, the Anginos present a theory of recovery

for breach of contract based upon the reasonable expectation doctrine.

However, the Anginos present no authority, nor has our research revealed,

that a cause of action for breach of contract exists based upon the

reasonable expectation doctrine. Accordingly, no relief is due on this claim.

      In the next two issues (Issues 4 and 5), the Anginos claim (1) that the

Amended Complaint and numerous documentary exhibits establish a theory

of recovery for breach of contract under waiver and estoppel, and (2) the

Amended Complaint and supporting exhibits state a viable theory of

recovery for breach of contract under impracticability and impossibility.

However, as the trial court correctly points out, these doctrines are

affirmative defenses, not causes of action.        See Trial Court Opinion,

5/13/2014, at 8; Pa.R.C.P. 1030 (“[A]ll affirmative defenses including but

not limited to the defenses of … estoppel, … impossibility of performance, …

and waiver shall be pleaded in a responsive pleading under the heading

“New Matter”.).    Accordingly, we reject this argument without further

discussion.

      In the sixth issue, the Anginos argue that the Amended Complaint

states a theory of recovery based upon Bank’s breach of contract by refusing

                                    - 13 -
J-A31024-14

to renew irrevocable letters of credit, refusing to honor letters of credit, and

interpreting letters of credit erroneously.   Specifically, the Anginos rely upon

allegations that Bank refused to renew two letters of credit — for

Mockingbird/Mockingbird Extended, and although continuing to renew a third

letter of credit — for Willow Lake, and refused to reimburse the Anginos for

expenses incurred for roads and infrastructure beyond the 2009 maturity

date. Here, however, there are no averments that Bank failed to abide by

the written terms of the letters of credit. Therefore, our review confirms the

Amended Complaint fails to state a cause of action based upon this theory.

      In the remaining issues, the Anginos claim that the Amended

Complaint sets forth causes of action for the torts of civil conspiracy,

defamation, fraud, and intentional infliction of emotional distress. The

Anginos also contend that the tort claims are not barred by the gist of the

action doctrine.

      The trial court has succinctly and properly rejected these arguments.

We therefore adopt the trial court’s discussion as dispositive of the final five

issues raised by the Anginos in this appeal, as follows:

            Plaintiffs next argue that the complaint is legally sufficient
      to state a claim for civil conspiracy. This contention is without
      merit and should be dismissed. A civil conspiracy is a
      combination of two or more persons who engage in an unlawful
      or criminal act or accomplish a lawful act by unlawful means or
      for an unlawful purpose. In the instant case, the defendants are
      the Bank and its attorneys; therefore, there is no conspiracy
      because it is impossible for a principal and agent to enter into a
      conspiracy. Even assuming arguendo, that a conspiracy existed

                                     - 14 -
J-A31024-14

     between the defendants, they did nothing illegal or for an
     unlawful purpose against plaintiffs.

            Plaintiffs’ next argument is that the complaint was legally
     sufficient to state a claim for the intentional infliction of
     emotional distress. This contention fails. Intentional infliction of
     emotional distress occurs when one, intentionally and recklessly,
     by extreme and outrageous conduct, causes severe emotional
     distress to another. This court notes that all plaintiffs assert this
     action, but businesses are unable to suffer emotional distress.
     The only allegations to support this claim are that Bank’s
     employees made telephone calls to the individual plaintiffs
     regarding their failure to make timely loan payments and they
     made “irresponsible threats of foreclosure.” Bank pursued its
     legal rights and warned plaintiffs of its intent to foreclose due to
     the lack of payments. Hence, Bank’s actions are legal, not
     irresponsible. If plaintiffs suffered emotional distress, it was the
     result of their unhappiness over Bank’s pursuit of its legal
     remedies.

            Plaintiffs assert that the complaint is legally sufficient to
     state a claim for fraud. This allegation is meritless. Pa.R.C.P.
     1019 states that averments of fraud or mistake must be averred
     with particularity. Plaintiffs contend only that the defendants
     committed fraud and misrepresentations pertaining to their
     position regarding appraisals, obligations, and letters of credit.
     Plaintiffs do not delineate what was fraudulent or why an action
     was fraudulent. Plaintiffs do not agree with defendants’
     appraisals of their properties, but their appraisals do not
     constitute fraud. For these reasons, this issue should be
     dismissed.

            Plaintiffs submit that the amended complaint is legally
     sufficient to state a claim for defamation. This complaint is a
     frippery. Plaintiffs do not state what statements were
     defamatory. Moreover, defendants did not publish any
     statements to the public. The public’s knowledge gained through
     the publicity of a legal proceeding is not defamation.

           Plaintiffs’ [next] contention is that their tort claims are not
     barred by the gist of the action doctrine. The gist of the action
     doctrine precludes tort claims that are collateral to claims
     sounding in contract. The doctrine is designed to maintain the
     conceptual distinction between breach of contract claims and tort

                                    - 15 -
J-A31024-14

       claims and, as a practical matter, precludes plaintiffs from re-
       casting ordinary breach of contract claims into tort claims. The
       Brickman Group, LTD. v. CGU Insurance Company, 865
A.2d 918 (Pa. Super. 2004). lf plaintiffs had pled legitimate
       intentional tort claims, perhaps they would have withstood the
       gist of the doctrine test; however, this court dismissed plaintiffs’
       tort claims because they were legally deficient. For this reason
       this assertion fails.

Trial Court Opinion, 5/13/2014, at 9–10.5

____________________________________________

5
  We simply add that the Pennsylvania Supreme Court recently addressed
the “gist of the action” doctrine in Bruno v. Erie Ins. Co., ___ A.3d ___
[2014 PA LEXIS 3319] (Pa. December 15, 2014). The Bruno Court held that
the “gist of the action” doctrine did not bar the plaintiffs’-insureds’
negligence claim against its insurer for false assurances made by the
insurer’s adjuster and the engineer regarding mold discovered in the
insureds’ home. The Supreme Court explained:

       [T]he mere existence of a contract between two parties does
       not, ipso facto, classify a claim by a contracting party for injury
       or loss suffered as the result of actions of the other party in
       performing the contract as one for breach of contract. Indeed,
       our Court has long recognized that a party to a contract may be
       found liable in tort for negligently performing contractual
       obligations and thereby causing injury or other harm to another
       contracting party ….

       Consequently, a negligence claim based on the actions of a
       contracting party in performing contractual obligations is not
       viewed as an action on the underlying contract itself, since it is
       not founded on the breach of any of the specific executory
       promises which comprise the contract. Instead, the contract is
       regarded merely as the vehicle, or mechanism, which
       established the relationship between the parties, during which
       the tort of negligence was committed.

Id. at *57–*58.

     We note that in Bruno, the issue of the “gist of the action” doctrine
was decided prior to the issue regarding whether the negligence claim was
(Footnote Continued Next Page)

                                          - 16 -
J-A31024-14

      Having considered the arguments raised by the Anginos, and finding

that none presents a basis upon which to disturb the decision of the trial

court, we affirm the order that dismissed the Anginos’ Amended Complaint

with prejudice.

      Order affirmed.

Judgment Entered.

Joseph D. Seletyn, Esq.
Prothonotary

Date: 1/28/2015

                       _______________________
(Footnote Continued)

otherwise legally cognizable, and therefore the Pennsylvania Supreme Court
remanded the case to this Court to fully consider the parties’ arguments on
that issue. See id. at *61-*62.

       Here, the Anginos argue that their tort claims are not barred by the
“gist of the action” doctrine because the claims arose from conduct separate
and apart from the subject contracts. The Anginos’ argument assumes the
legally sufficiency of their intentional tort claims. However, we have
concluded that the trial court properly sustained the demurrers and
dismissed the intentional tort claims. It follows, as the trial court
determined, that the Anginos’ argument regarding the “gist of the action”
doctrine is moot.

                                           - 17 -