Gorski v. Smith

812 A.2d 683, 2002 Pa. Super. 334, 2002 Pa. Super. LEXIS 3204
CourtSuperior Court of Pennsylvania
DecidedOctober 30, 2002
StatusPublished
Cited by127 cases

This text of 812 A.2d 683 (Gorski v. Smith) is published on Counsel Stack Legal Research, covering Superior Court of Pennsylvania primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Gorski v. Smith, 812 A.2d 683, 2002 Pa. Super. 334, 2002 Pa. Super. LEXIS 3204 (Pa. Ct. App. 2002).

Opinion

CERCONE, P.J.E.

¶ 1 Appellants, Lawrence Smith and Jenkins, Jenkins, Siergiej and Smith, the “Jenkins Firm,” appeal from the judgment of $461,000 entered on a jury verdict in favor of Appellees, Caesar and Saranne Gorski, hereinafter the “Gorskis.” After review, we affirm in part and vacate in part.

¶ 2 This is a case involving attorneys, real estate developers, land, and malfunctioning sewers, the volatile mixture of which spawned considerable litigation. The Gorskis were real estate developers with fourteen (14) acres of land to sell in Skippack Township, Montgomery County, hereinafter referred to as the “property.” A gentleman named Iacobucci wished to buy the property and build townhouses, so he entered into negotiations with the Gorskis. The Gorskis retained the services of Attorney Raymond Jenkins, now deceased, who was a principal in the Jenkins Firm, to negotiate a land sales agreement with Iacobucci.

*689 ¶3 Attorney Jenkins and Iacobucci’s representatives entered into talks, which produced a land sales agreement. In this agreement, the Gorskis, as sellers, warranted that they had obtained subdivision approval and final approval from the relevant governmental authorities so that the buyer, Iacobucci, could obtain building permits to construct seventy-nine (79) residential units on the property without any further approvals. See Land Sales Agreement, Plaintiffs Exhibit 4, ¶ 8.13,1.03,1.06 and 1.07. The agreement also specifically required the Gorskis, as sellers, to warrant that they had satisfied certain requirements which were set forth in a letter of July 2, 1993 from the Skippack Township Solicitor, Thomas M. Keenan, Esquire, to Attorney Jenkins. In this letter the solicitor requested, inter alia, that the Skippack Township Sewer Authority forward a letter to him indicating that they would be servicing the subdivision which Iacobucci planned to build. Id.; Plaintiffs Exhibit 3. The parties signed the agreement on November 5, 1993, even though the Skippack Township Sewer Authority had not provided written verification that they would be providing sewer service to the property.

¶ 4 As foul fate would have it, problems developed with a sewer pumping facility adjacent to the property, due to excess storm water infiltration. The Skippack Township Sewer Authority would not grant final approval for the subdivision of the property unless the capacity of the pumping station was upgraded by the developer, or the station was replaced with an additional larger sewer line. N.T. Trial, 10/23/2000, at 186-187, 191. Iacobucci refused to pay for such upgrades and took the position that since the Gorskis, as sellers, warranted that they would deliver a fully approved subdivision, it was their responsibility to pay for the necessary upgrades. N.T. Trial, 10/24/2000, at 82.

¶ 5 On June 9,1994 the Gorskis, through Attorney Jenkins, notified Iacobucci that their land sales agreement was terminated. N.T. Trial, 10/19/2000, at 117. The Gorskis opened discussions with another buyer but apparently did not finalize a sales agreement with that buyer. Id. at 122. The Gorskis subsequently asked Attorney Jenkins to commence legal proceedings to release them from their land sales agreement with Iacobucci. Attorney Jenkins filed a complaint on behalf of the Gorskis seeking termination of the land sales agreement on the basis that Iacobuc-ci refused to go forward with the sale of the property until the sewer issue was resolved and that he also refused to agree to terminate the agreement.

¶ 6 Iacobucci, stung by the twin indignities of overflowing sewers, and what he apparently perceived as equally odious business maneuvering, countersued the Gorskis for breach of contract. Both actions were consolidated for a non-jury trial before a judge in Montgomery County, the Honorable Bernard Moore. Judge Moore ruled in favor of Iacobucci in both actions and awarded him a total judgment of $645,000, which represented the amount Iacobucci had paid as a deposit on the property, out of pocket expenses, lost profits on the transaction and prejudgment interest. Trial Court Opinion, filed 1/3/2001, at 2. The final judgment against the Gorskis, including all accrued post-judgment interest, totaled $713,445. N.T. Trial, 10/17/2000, at 118.

¶ 7 The Gorskis, stung by the magnitude of their sudden misfortune, filed for bankruptcy to prevent Iacobucci from executing on the judgment by forcing a sheriffs sale of the property. During the bankruptcy proceedings, the Jenkins Firm filed a claim for its unpaid legal bills. The Gorsk-is later presented a reorganization plan to the Bankruptcy Court which did not pro *690 ■vide for payment of the unpaid legal bills. Iacobucci subsequently proposed a competing reorganization plan to the Bankruptcy Court that provided not only for full payment of his judgment, but also the legal bills of the Jenkins Firm. The Jenkins Firm subsequently voted for the Iaco-bucci plan and not the Gorskis’ plan. However, before that plan was approved by the Bankruptcy Court, the matter went to mediation, after which the Gorskis settled the Iacobucci claim for $425,000 and discontinued the bankruptcy action.

¶ 8 The Gorskis then commenced the instant action against Raymond Jenkins, individually, and the Jenkins Firm on the basis of breach of contract and negligence for the firm’s representation of them in connection with the land sales agreement, and on the basis of breach of contract and negligence for the firm’s representation of them at the subsequent trial involving Ia-cobucci. The Gorskis also proceeded on a claim of bad faith based on the Jenkins Firm’s decision to endorse the Iacobucci plan over their plan in the bankruptcy proceedings. Prior to trial, Attorney Jenkins regrettably passed away and Lawrence Smith, Mr. Jenkins executor, was substituted for him as a defendant. Ultimately the case proceeded to a jury trial, before the Honorable Calvin E. Smith, during which there were two (2) weeks of testimony from a number of witnesses.

¶ 9 In its verdict, the jury found Attorney Jenkins and the Jenkins Firm, (referred to infra, collectively, as Appellants) to have been negligent in representing the Gorskis in their negotiation of the land sales agreement with Iacobucci and negligent in representing the Gorskis in their lawsuit against Iacobucci. The jury also found that Appellants breached their contractual obligation to provide effective legal representation to the Gorskis in connection with the negotiation of the land sales agreement with Iacobucci. Further, the jury found that Appellants acted in bad faith by voting for the debt discharge plan proposed by Iacobucci in Bankruptcy Court. The only bright spot for Appellants in the jury verdict was that the jury found them not to have breached their contractual duty of providing effective representation to the Gorskis when it represented them in the lawsuit against Iaco-bucci. Finally, the jury found the Gorskis contributorily negligent in their actions pertaining to the creation of the land sales agreement with Iacobucci.

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Cite This Page — Counsel Stack

Bluebook (online)
812 A.2d 683, 2002 Pa. Super. 334, 2002 Pa. Super. LEXIS 3204, Counsel Stack Legal Research, https://law.counselstack.com/opinion/gorski-v-smith-pasuperct-2002.