Opinion
J-A32009-12 No. 77 WDA 2012
04-08-2013
GREATER ERIE INDUSTRIAL DEVELOPMENT CORPORATION, Appellee v. PRESQUE ISLE DOWNS, INC., Appellant
NON-PRECEDENTIAL DECISION - SEE SUPERIOR COURT I.O.P. 65.37
Appeal from the Order entered on December 14, 2011
in the Court of Common Pleas of Erie County,
Civil Division, No. 14436-2009
BEFORE: MUSMANNO, WECHT and COLVILLE, JJ. MEMORANDUM BY MUSMANNO, J.
Retired Senior Judge assigned to the Superior Court.
Presque Isle Downs, Inc. ("Presque Isle") appeals from the Order entering summary judgment against it and in favor of the Greater Erie Industrial Development Corporation ("GEIDC"). We affirm.
In its Opinion, the trial court summarized the history underlying the instant appeal as follows:
On July 20, 2005, [GEIDC] entered into an Agreement for the Sale of Real Estate (the Agreement) with [Presque Isle] for the purchase of real property at the former International Paper Company site located at 1540 East Lake Road in Erie, Pennsylvania.Trial Court Opinion, 12/14/11, at 1-2.
Under the Agreement, Defendant [Presque Isle] agreed to sell Plaintiff GEIDC some real property, together with the improvements thereon. Also under the Agreement, [Presque Isle] agreed to acquire and deliver to GEIDC, at an unspecified future date, a quantity of clean fill dirt sufficient to cap the Dunn Brickyard parcels to meet an Act 2 Standard in accordance with
a cleanup plan to be approved by the Pennsylvania Department of Environmental Protection ( See the Agreement, paragraph 15).
The purchase price of four million dollars was allocated at paragraph 3 of the Agreement to assign a specific value to different parts of the sale. Paragraph 3(c) allocates six hundred thousand dollars of the four million dollar purchase price specifically to clean fill dirt.
On October 10, 2005, the parties executed an addendum to the Agreement, which in part added a clause that states, "Buyer shall accept the Property in 'as is' condition, and 'with all faults,' including but not limited to the environmental condition."
On October 11, 2005, the parties closed on the purchase of the property, at which time [] GEIDC delivered the four million dollar purchase price in exchange for ... [Presque Isle's] delivery of a deed. By closing, [Presque Isle] had not yet fulfilled its covenant to acquire and deliver the clean fill dirt as detailed in the Agreement, and the details of the clean fill dirt obligation were not included in the language of the deed.
... By January 6, 2009, [Presque Isle] still had not delivered the clean fill dirt to GEIDC, so GEIDC's chief operating officer contacted [Presque Isle] to inquire about the obligation. [Presque Isle] denied [it] had any remaining obligation to GEIDC, and as a result, GEIDC filed [the instant] lawsuit on October 1, 2009[,] seeking $600,000, the amount GEIDC paid to [Presque Isle] as consideration for the obligation to obtain and deliver the clean fill dirt. Specific performance is not requested[,] as GEIDC has already had to find and purchase a substitute source of clean fill dirt at an additional expense.
Following discovery, the trial court denied Presque Isle's Motion for summary judgment, and granted GEIDC's Cross-Motion for summary judgment. Upon the entry of summary judgment in favor of GEIDC, Presque Isle filed a Notice of appeal, followed by a court-ordered Concise Statement of matters complained of on appeal, pursuant to Pa.R.A.P. 1925(b).
Presque Isle now presents the following claims for our review:
[I.] Whether the trial court erred in granting Summary Judgment to Buyer [GEIDC] premised on a purported collateral agreement to deliver clean fill dirt for environmental remediation where:Brief of Appellant at 5-6.
(A) the purported collateral agreement does not exist pursuant to the express provisions of the Sales Agreement and the express provisions of the Deed; and
(B) the parties modified and superseded the Sales Agreement in an Addendum thereto, negotiated three months after the Sales Agreement, wherein Seller [GEIDC] agreed, among other things, to assume liability for the ongoing environmental remediation thus clearly, unequivocally and decisively shifting the obligation of final condition of the property to [GEIDC]; and
(C) [GEIDC] waived its right to sue Seller [Presque Isle] for clean fill dirt necessary for ongoing environmental remediation and thus waived the instant claim for breach of the purported collateral agreement; and
(D) [GEIDC] agreed to the express provisions of the Deed, including its "AS IS" clause, "No Collateral Agreement" clause, "Buyer's Duty to Maintain" clause, "Conspicuous Release" clause and the "Express Covenant Not to Sue["] clause, thereby modifying and superseding the Sales Agreement and any resulting purported collateral agreement; and
(E) [GEIDC] expressly accepted the subject real property without any warranties[,] express or implied, expressly released [Presque Isle] from liability, expressly covenanted not to sue [Presque Isle] and expressly waived [its] right to sue [Presque Isle] for breach of a purported collateral agreement; and
(F) [GEIDC's] Demand for clean fill dirt was untimely pursuant to the express ["]time is of the essence["] clause at paragraph 21 of the Sales Agreement; and
(G) the trial court erred in finding that the "covenant to deliver clean fill dirt was collateral to the obligation to transfer the property" and the trial court further erred in application of the "collateral matter exception to the merger by deed doctrine" under Pennsylvania law, as the collateral matter exception is limited to cases involving residential real property and the instant case involves commercial non-residential real property of an industrial nature, with associated risks[?][II.] Whether the trial court committed an error of law and abused its discretion as the Court imposed an improper measure of damages using the express provisions of paragraph 3c of the Sales Agreement, as the Sales Agreement includes a binding limitation of liability clause which expressly provides that in the event of a Default by [Presque Isle], [GEIDC] may, at [GEIDC's] "sole" option, elect to (a) receive a return of the deposit; or (b) proceed with an action for specific performance[?]
The Pennsylvania Rules of Civil Procedure instruct that a trial court shall enter summary judgment when there is no genuine issue of any material fact as to a necessary element of the cause of action or defense that could be established by additional discovery. Pa.R.C.P. 1035.2(1); Weaver v. Lancaster Newspapers , Inc., 926 A.2d 899, 902 (Pa. 2008). If there are any material facts in dispute, or if the facts can support conflicting inferences, the case is not free from doubt, and therefore, summary judgment is inappropriate. Weaver , 926 A.2d at 902. However, regarding questions of law, our standard of review is de novo and our scope of review is plenary. Gall v. Crawford , 982 A.2d 541, 545 (Pa. Super. 2009).
GEIDC's Complaint alleged a cause of action for breach of contract. "A breach of contract action involves (1) the existence of a contract, (2) a breach of a duty imposed by the contract, and (3) damages." Kirschner v. K&L Gates LLP , 46 A.3d 737, 755 (Pa. Super. 2012).
[W]hen a written contract is clear and unequivocal, its meaning must be determined by its contents alone. It speaks for itself and a meaning cannot be given to it other than that expressed. Where the intention of the parties is clear, there is no need to resort to extrinsic aids or evidence. Hence, where language is clear and unambiguous, the focus of interpretation is upon the terms of the agreement as manifestly expressed, rather than as, perhaps, silently intended.Lesko v. Frankford Hospital-Bucks County , 11 A.3d 917, 921 (Pa. 2011) (citation omitted). "The meaning of an unambiguous contract presents a question of law for which our review is de novo." Id. (citing Seven Springs Farm, Inc. v. Croker , 801 A.2d 1212, 1215 n.1 (Pa. 2002)).
Presque Isle first claims that the trial court erred in granting summary judgment premised upon an Agreement to deliver clean fill dirt for environmental remediation. Brief of Appellantat 14. In support, Presque Isle raises multiple issues. First, we note that Presque Isle directs our attention to the following paragraphs of the Agreement:
¶ 4(i)(a) (providing the scope of GEIDC's due diligence as including satisfying itself as to the condition of, inter alia, soils, subsurface and environmental conditions of the property), see Brief for Appellant at 16-17;Presque Isle further directs our attention to paragraph 11, which, Presque Isle argues, required GEIDC to assume liability of the property by an "as of" date and precluded GEIDC from relying upon any collateral agreement. Brief for Appellant at 20-21. These specific paragraphs, Presque Isle alleges, evidence the intent of the parties that no collateral agreement exists. Id. at 29. Presque Isle also argues that the trial court erred in applying the collateral matter exception to the merger by deed rule. Id. According to Presque Isle, "the parties expressly agreed pursuant to the integration clause in the Deed that [Presque Isle] should not be subject to any collateral agreements." Id.
¶ 4(ii) (providing for GEIDC's waiver of contingencies upon the expiration of the Due Diligence period), see Brief for Appellant at 17-18;
¶ 15 (providing that the Agreement includes a "Personal Property" clause, which, although providing for the delivery and storage of clean fill dirt, is a contingent and conditional duty and was required to be performed prior to the delivery of the Deed), see Brief for Appellant at 18;
¶ 18 (providing that Presque Isle's tender of an executed Deed constitutes performance), see Brief for Appellant at 18-19;
¶ 20 (limiting liability in the event of default to either specific performance or retaining the deposit as liquidated damages), see Brief for Appellant at 19;
¶ 21 (providing that time is of the essence, to be read in conjunction with paragraph 15), see Brief for Appellant at 19;
¶ 23 (setting forth the Sales Agreement's integration clause), see Brief for Appellant at 19-20.
The merger doctrine, "normally applied to warranties of title, holds that all warranties and representations in connection with a sale or other transaction made prior to or contemporaneous with a deed are merged into the deed and that unless therein expressly provided for, they are forever lost." Elderkin v. Gaster , 288 A.2d 771, 775 n.11 (Pa. 1972); accord Wade v. Huston , 877 A.2d 464, 465 (Pa. Super. 2005). "A corollary to the doctrine of merger is that delivery of the deed does not foreclose inquiry into those matters not intended to be controlled by the deed or which are collateral to the deed." Elderkin , 288 A.2d at 775 n.11.
In its Opinion, the trial court addressed the issues discussed above and concluded that they lack merit. Trial Court Opinion, 12/14/11, at 3-5. We agree with the trial court's sound reasoning, as set forth in its Opinion, and affirm on that basis with regard to this issue. See id.
Presque Isle's claim regarding the integration clause is waived, as it was not raised in Presque Isle's Pennsylvania Rule of Appellate Procedure 1925(b) Concise Statement of matters complained of on appeal. See Pa.R.A.P. 1925(b)(4)(vii) (providing that issues not included in the Rule 1925(b) concise statement are deemed waived on appeal).
Presque Isle next asserts that the trial court erred in applying the collateral matter exception to the merger by deed rule where the provisions of paragraph 3, set forth in the Addendum to the Agreement, modified and superseded the obligations included in the Agreement. Brief of Appellant at 30. Presque Isle points out that the Agreement required due diligence to be performed within sixty days. Id. According to Presque Isle, the Addendum, executed on the eve of closing, modified the Agreement by replacing paragraph 11 (regarding the providing of clean fill) with a paragraph wherein GEIDC agreed to accept the property "AS IS." Id. at 31. Presque Isle contends that the Addendum, which addressed the issues related to liabilities between the parties for "the existing environmental condition of the Dunn Brickyard and liability for meeting [] Act 2 Standards[,]" superseded the Agreement. Id. at 32.
Presque Isle also asserts that by its execution of the Deed, GEIDC accepted the property in its existing condition, "without any warranties[,] express or implied," and released Presque Isle from liability and its right to sue Presque Isle for any breach of a purported collateral agreement. Id. at 33. Presque Isle argues that the Deed supersedes the collateral agreement, the Agreement and the Addendum, and represents the final statement of the Agreement between the parties. Id. at 32-33.
The trial court's Opinion concisely addressed these issues and correctly concluded that they lack merit. See Trial Court Opinion, 12/14/11, at 3-5 (concluding that the obligation to provide clean fill constituted a collateral matter and survived the execution of the deed), 5 (concluding that the Agreement's "AS IS" clause and "WITH ALL FAULTS" language does not refer to the obligation to provide clean fill), 9-10 (concluding that the Addendum's "AS IS" clause and "WITH ALL FAULTS" language does not refer to the obligation to provide clean dirt). We agree with the sound reasoning employed by the trial court, and affirm based upon the trial court's Opinion with regard to these issues. See id.
Our review discloses that the deed's reference to GEIDC receiving the property "AS IS" did not refer to GEIDC's purchase of additional clean fill for the property, or supersede Presque Isle's collateral obligation to provide clean fill.
Presque Isle next asserts that the trial court erred in applying the collateral matter exception to the merger by deed rule where GEIDC's demand purportedly was untimely pursuant to the "time is of the essence clause" at paragraph 21 of the Agreement. Brief of Appellant at 35. Presque Isle argues that even a collateral agreement would be subject to the "time is of the essence" clause. Id.
The trial court's Opinion provides a concise discussion of this claim, ultimately concluding that it lacks merit. Trial Court Opinion, 12/14/11, at 6-7. We adopt the sound reasoning of the trial court's Opinion and affirm on this basis with regard to this issue. See id.
Presque Isle next argues that the collateral matter exception to the merger by deed rule applies only to cases involving residential real property. Brief of Appellant at 36. Therefore, Presque Isle argues, the trial court erred in applying the exception to this case, which involves the sale of commercial property. Id. at 36-37. Presque Isle additionally asserts that various provisions of the Agreement preclude the application of the collateral matter exception. Id. at 37.
As the trial court discussed in its Opinion, those clauses relied upon by Presque Isle (and properly preserved for review on appeal) did not extinguish Presque Isle's obligation to provide clean fill for the price of $600,000. Moreover, as stated above, the deed's reference to GEIDC receiving the property "AS IS" did not extinguish the collateral agreement regarding GEIDC's purchase of additional clean fill for the property, or supersede Presque Isle's collateral obligation to provide clean fill. Accordingly, we conclude that this issue lacks merit.
Presque Isle also includes arguments based upon the deed's "No Collateral Agreement" clause, "Buyer's Duty to Maintain" clause, the "Conspicuous Release " clause, and the "Covenant Not to Sue" clause. Any claims based upon these clauses were not raised in Presque Isle's Pa.R.A.P. 1925(b) Concise Statement and accordingly, are waived on appeal. See Pa.R.A.P. 1925(b)(4)(vii).
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In its second claim of error, as raised in its brief, Presque Isle asserts that the trial court erred in assessing damages for its breach of the Agreement. Brief of Appellant at 40. Presque Isle argues that pursuant to the Agreement, GEIDC was entitled either to the return of its deposit or specific performance. Id. at 40-41.
The trial court addressed this claim in its Opinion and concluded that it lacks merit. Trial Court Opinion, 12/14/11, at 8-9. We agree with the reasoning of the trial court and affirm on this basis. See id.
Accordingly, we affirm the Order entering summary judgment against Presque Isle and in favor of GEIDC.
Order affirmed.