Broadwater, S. v. Materkowski, J.

Superior Court of Pennsylvania·Decided November 30, 2020·No. 1021 WDA 2019·Unpublished

Opinion

NON-PRECEDENTIAL DECISION - SEE SUPERIOR COURT I.O.P. 65.37

SHELLY M. BROADWATER : IN THE SUPERIOR COURT OF : PENNSYLVANIA

Appellant :

:

v. :

:

JOSEPH E. MATERKOWSKI, : No. 1021 WDA 2019 INDIVIDUALLY AND AS AGENT FOR :

ABACUS MANAGEMENT SYSTEMS, :

LLC; ABACUS MANAGEMENT :

SYSTEMS, LLC; DEREK VIRGILI, :

INDIVIDUALLY AND AS AGENT FOR :

BERKSHIRE HATHAWAY :

HOMESERVICES THE PREFERRED :

REALTY; AND BERKSHIRE :

HATHAWAY HOMESERVICES THE :

PREFERRED REALTY :

Appeal from the Order Entered June 11, 2019, in the Court of Common Pleas of Fayette County, Civil Division at No(s): 1725 of 2017 GD.

BEFORE: STABILE, J., KUNSELMAN, J., and PELLEGRINI, J.* MEMORANDUM BY KUNSELMAN, J.: FILED NOVEMBER 30, 2020 I. Introduction

In this dispute over a sale of residential property, Shelly M. Broadwater (“the Buyer”) appeals an order involuntarily discontinuing her lawsuit against all four defendants. Those defendants are (1) the company that flipped and

sold her the home in question, (2) its manager,1 (3) the Seller’s real-estate

* Retired Senior Judge assigned to the Superior Court.

1 We refer to defendants one and two (Abacus Management Systems and Joseph E. Materkowski) collectively as “the Seller.”

agent, and (4) the agent’s firm.2 During discovery, the Buyer settled her claims against the Seller for an undisclosed amount of money (“the Release”). The trial court concluded that the Release of the Seller also released the Agency, because the Agency had cross-sued the Seller for contribution and indemnification.

Relying on Pennsylvania Rule of Civil Procedure 229, which governs voluntary discontinuances, the trial court involuntarily discontinued the entire lawsuit. This was incorrect. The Buyer did not execute a general release, so her claims against the Agency remain viable, as do the Agency’s cross-claims against the Seller. We therefore reverse the order discontinuing this action.

II. Factual & Procedural Background The Buyer purchased a remodeled home from the Seller. The Buyer alleges there were substantial defects that all defendants concealed prior to the closing. She therefore brought counts for fraud, breach of contract, and violation of the Real Estate Disclosure Act3 against Seller. She also brought a separate count of fraud against the Agency. Finally, the Buyer alleged a count for violation of the Unfair Trade Practices and Consumer Protection Law 4 by

all defendants.

2We refer to defendants three and four (Derek Virgili and Berkshire Hathaway) collectively as “the Agency.” Originally, the real-estate agency was Northwood Realty Service, but that defendant changed to Berkshire Hathaway while this matter was before the trial court.

3 68 Pa.C.S.A. § 7301. 4 73 Pa.C.S.A. § 201.1.

The Agency filed a cross-claim against the Seller, claiming if the Agency was ultimately liable to the Buyer, then the Seller is jointly and severally liable. In other words, the Agency sought reimbursement from the Seller for any money it might ultimately owe the Buyer.

The Seller filed no Answer to the Buyer’s Complaint. Nor has it filed an Answer to the Agency’s cross-claim.

After a year, the Buyer signed the Release and agreed to release the Seller:

from any and all actions, causes of action, claims or demands, of whatever kind or nature, for any known or unknown injuries, losses, or damages allegedly sustained by [Buyer] and related in any way to the legal action instituted by the undersigned in the Court of Common Pleas of Fayette County, Pennsylvania, at Docket No. 1725 of 2017.

Buyer’s 10/24/18 Release at 1. The Release made no direct reference to the Agency or the Buyer’s claims against the Agency.

The Buyer then praeciped to discontinue her action against the Seller without permission from the trial court or the Agency. Four months later, the Agency asked the trial court to strike the discontinuance against the Seller, under Pa.R.C.P. 229. The court denied that request “without prejudice to re- present should the [Seller] fail to file a Motion for Leave of Court to discontinue the action” as to all defendants. 4/12/19 Order.

Next, the Seller moved to terminate the Buyer’s case in its entirety, under Rule 229. The Seller argued that, because the Buyer did not obtain permission from the court or the Agency to file her praecipe to discontinue

regarding the Seller, the Buyer misled opposing counsel and the Seller into believing that they were fully and forever released and discharged from all actions or causes of action, claims, or demands in this matter.

The Buyer replied to the motion by specifically denying she “intended, or represented, that the Praecipe to . . . Discontinue ended all claims against all Defendants. On the contrary, [the praecipe] clearly indicates, on its face, that it applies to claims against the [Seller] only.” Buyer’s Answer and New Matter to Seller’s 5/6/19 Motion at 2. She also indicated that Pa.R.C.P. 229 does not allow the trial court to dismiss a case. See id. In her New Matter, the Buyer sought the trial court’s approval of her already-filed praecipe to discontinue as to the Seller, under Rule 229(b)(1). See id. at 4.

The trial court entered an order discontinuing the action completely —

i.e., as to all four defendants. This timely appeal followed.

III. Analysis

The Buyer raises two issues that we combine for ease of disposition – whether the trial court committed an error of law or abused its discretion by dismissing this case. See Buyer’s Brief at 4. In the Agency’s responsive brief, it argues that we should affirm the order discontinuing this case with prejudice on alternative grounds. See Agency’s Brief at 3-9. We address both parties’ issues in turn. A. Discontinuance under Rule 229 With only two pages of argument, the Buyer’s brief is quite succinct.

See id. at 7-8. She argues that Rule 229 does not authorize the trial court to

discontinue a case against all defendants as penalty for failure to obtain leave of court. She also contends her noncompliance with the Rule, if any, did not prejudice the defendants. Thus, the Buyer believes the trial court misapplied Rule 229 and thereby abused its discretion in discontinuing this case.

The Seller’s response expresses frustration with what Seller perceives to be the Buyer’s anticipatory repudiation (if not outright breach) of the Release. The Seller claims the Buyer and her counsel “are acting in bad-faith,” and it should receive “attorney fees and costs per the full-and-final disclosure, which assures that [the Buyer] will reimburse for all losses or damages . . . sustained related in any way to legal action instituted by the [Buyer].” Seller’s Brief at 4 (some punctuation and capitation omitted). According to the Seller, “The trial court must be upheld and [the Buyer] and her counsel’s bad faith cannot be permitted under any circumstances as this conduct is unconscionable in this Commonwealth.” Id. at 6. The Seller contends that the Buyer promised “full indemnification in exchange for the settlement payment.” Id. at 9 (emphasis in original). In the Seller’s view, the Buyer’s procedural error “clearly prejudiced” it, because the Seller fears exposure to liability from the Agency’s cross-claim “that [the Seller is] responsible for any and all wrongdoing.” Id. (emphasis in original).5

5 Also, Seller claims “that five contractors were paid $30,000.00 for the work done in the home” and that the decision to settle involved Ms. Broadwater’s alleged need to join those contractors as co-defendants. See Seller’s Brief at 5-6, 13. Whatever may have transpired during settlement negotiations or

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