Barker, R. v. Dahlkemper Landscape ( 2014 )

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NON-PRECEDENTIAL DECISION – SEE SUPERIOR COURT I.O.P. 65.37
ROBERT J. BARKER AND DIANE B. : IN THE SUPERIOR COURT OF
BARKER, HUSBAND AND WIFE, : PENNSYLVANIA
:
Appellants :
:
v. :
: No. 1384 WDA 2013
DAHLKEMPER LANDSCAPE ARCHITECTS :
& CONTRACTORS, INC. :
Appeal from the Order, July 25, 2013,
in the Court of Common Pleas of Erie County
Civil Division at No. 11443-2012
BEFORE: GANTMAN, P.J., FORD ELLIOTT, P.J.E., AND OLSON, J.
MEMORANDUM BY FORD ELLIOTT, P.J.E.: FILED OCTOBER 20, 2014
Appellants, Robert J. Barker and Diane B. Barker (“the Barkers”),
appeal from the order of July 25, 2013, dismissing their negligence claim as
barred by the “as is” clause contained in Paragraph 28(B) of the Agreement
for Sale of Real Estate (“the Agreement”). The Barkers also appealed the
December 4, 2012 order ruling that they failed to state a viable claim for
breach of an implied warranty. This court dismissed the appeal at No. 1399
WDA 2013 as duplicative and directed that all properly preserved issues be
raised in the appeal at No. 1384 WDA 2013. After careful review, we affirm.
The subject matter of this case is a collapsed
retaining wall. [The Barkers] are the current owners
of property in Fairview, Pennsylvania located on a
bluff on the shore of Lake Erie. In 2007, the
previous owners of the property contracted
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[Dahlkemper Landscape Architects & Contractors,
Inc. (“Dahlkemper”)] to design and construct a
retaining wall on the bluff. In 2009, [the Barkers]
purchased the property from the prior owners, and in
May 2011, the retaining wall collapsed, causing land
and foliage to subside along with it. Thereafter, [the
Barkers] brought this action against [Dahlkemper],
alleging negligence and breach of implied warranty.
Trial court opinion, 12/4/12 at 1 (citations to the complaint omitted).
On December 4, 2012, the trial court granted Dahlkemper’s motion for
judgment on the pleadings with respect to the implied warranty claim, on
the basis of lack of privity between the parties. The Barkers, the subsequent
owners of the property, were not in privity of contract with the contractor,
Dahlkemper. The trial court also noted that all of the cases relied upon by
the Barkers pertained to houses, not retaining walls. (Id. at 3.) However,
the trial court denied Dahlkemper’s motion with regard to the Barkers’
negligence claim.
Subsequently, on July 25, 2013, the trial court granted Dahlkemper’s
summary judgment motion and dismissed the remaining negligence claim,
finding that it was barred by Paragraph 28(B) of the Agreement.
Paragraph 28(B) provides,
Unless otherwise stated in this Agreement, Buyer
has inspected the Property (including fixtures and
any personal property specifically listed herein)
before signing this Agreement or has waived the
right to do so, and agrees to purchase the property
IN ITS PRESENT CONDITION. Buyer acknowledges
that Brokers, their licensees, employees, officers, or
partners have not made an independent examination
or determination of the structural soundness of the
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Property, the age or condition of the components,
environmental conditions, the permitted uses or of
conditions existing in the locale where the Property is
situated; nor have they made a mechanical
inspection of any of the systems contained therein.
(Emphasis in original.)
The trial court found that this “as is” clause operated to bar the
Barkers’ negligence claim, where Paragraph 28(B) was unequivocal and
unambiguous in stating that they either inspected the property or waived
their right to do so, and purchased the property “in its present condition.”
(Trial court opinion, 7/25/13 at 4.) The trial court determined that this
language clearly demonstrated the parties’ intent that the Barkers purchase
the property “as is” and release any parties responsible for defects therein
from liability. (Id.) This timely appeal followed.
First, we will address the implied warranty claim. The trial court
granted Dahlkemper’s motion for judgment on the pleadings on this issue,
finding that the implied warranty of habitability does not apply to retaining
walls.
Our scope of review on an appeal from the grant of
judgment on the pleadings is plenary. Meehan v.
Archdiocese of Philadelphia, 870 A.2d 912, 918
(2005). Entry of judgment on the pleadings is
permitted under Pennsylvania Rule of Civil Procedure
1034, which provides that “after the pleadings are
closed, but within such time as not to unreasonably
delay trial, any party may move for judgment on the
pleadings.” Pa.R.C.P. 1034(a). A motion for
judgment on the pleadings is similar to a demurrer.
Citicorp North America, Inc. v. Thornton, 707
A.2d 536, 538 (Pa.Super.1998). It may be entered
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when there are no disputed issues of fact and the
moving party is entitled to judgment as a matter of
law. Id. In determining if there is a dispute as to
facts, the court must confine its consideration to the
pleadings and relevant documents. Id. On appeal,
we accept as true all well-pleaded allegations in the
complaint. Meehan, supra.On appeal, our task is to determine whether
the trial court’s ruling was based on a clear error of
law or whether there were facts disclosed by the
pleadings which should properly be tried before a
jury or by a judge sitting without a jury. Citicorp,
supra.
Neither party can be deemed to have
admitted either conclusions of law or
unjustified inferences. Moreover, in
conducting its inquiry, the court should
confine itself to the pleadings themselves
and any documents or exhibits properly
attached to them. It may not consider
inadmissible evidence in determining a
motion for judgment on the pleadings.
Only when the moving party’s case is
clear and free from doubt such that a
trial would prove fruitless will an
appellate court affirm a motion for
judgment on the pleadings.
Kelly v. Nationwide Insurance Company, 414
Pa.Super. 6, 606 A.2d 470, 471-72 (1992)
(quotations and citations omitted).
Consolidation Coal Co. v. White, 875 A.2d 318, 325-326 (Pa.Super.
2005).
Our Supreme Court first recognized the implied
warranty of habitability in Elderkin v. Gaster, 447
Pa. 118, 288 A.2d 771 (1972). In Elderkin, our
Supreme Court recognized that the implied
warranties of habitability and reasonable
workmanship were necessary to equalize the
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disparate positions of the builder-vendor and the
average home purchaser by safeguarding the
reasonable expectations of the purchaser who is
compelled to depend upon the builder-vendor’s
greater manufacturing and marketing expertise.
Conway v. The Cutler Group, Inc., 57 A.3d 155, 158 (Pa.Super. 2012),
reversed, 2014 WL 4064261 (Pa. filed August 18, 2014), citing Elderkin,
288 A.2d at 776-777 (additional citation omitted). The Barkers rely on this
court’s decision in Conway, in which we held that the implied warranty of
habitability extends to a second or subsequent purchaser of a home, stating
that, “A second or subsequent purchaser is entitled to the same assurances
as the original purchaser that the home the builder has constructed is
habitable for human living.” Conway, 57 A.3d at 161. This court reasoned
that, “the risk of latent defects affecting habitability in the home that do not
materialize for years after construction properly rests with the party who
built the home, irrespective of whether the homeowner is the original
buyer.” Id. at 162 (footnote omitted).
Recently, however, our supreme court reversed, declining to eliminate
the requirement for contractual privity in a claim for breach of the implied
warranty of habitability. Our supreme court noted that the holding in
Elderkin was rooted in the existence of a contract between the
builder-vendor of a residence and the purchaser-resident: “Thus, in
Elderkin, we adopted the doctrine of implied warranty of habitability for a
newly constructed residence under circumstances where the parties to the
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sale of the residence, to wit, the builder-vendor and the purchaser-resident,
were in privity of contract.” Conway, 2014 WL 4064261 at *2. The
Conway court concluded that, “the question of whether and/or under what
circumstances to extend an implied warranty of habitability to subsequent
purchasers of a newly constructed residence is a matter of public policy
properly left to the General Assembly.” Id. at *5. Accordingly, our supreme
court held that an action for breach of the implied warranty requires
contractual privity between the parties. Id.
Here, as in Conway, the Barkers are second or subsequent
purchasers. As such, they are not in contractual privity with Dahlkemper
and cannot, as a matter of law, recover on a claim for breach of the implied
warranty of habitability, a point they now concede in light of the Conway
decision. (See September 2, 2014 letter from Barkers’ counsel.)1
Therefore, we need not address whether the implied warranty of habitability
applies to retaining walls. The trial court did not err in granting
Dahlkemper’s motion for judgment on the pleadings with regard to the
Barkers’ claim for breach of an implied warranty of habitability.
Next, we address the Barkers’ negligence claim. As stated above, this
claim was dismissed on Dahlkemper’s motion for summary judgment on the
basis of Paragraph 28(B)’s “as is” provision.
1
We appreciate that counsel for the Barkers filed a post-submission
communication informing this court of our supreme court’s decision in
Conway.
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Summary judgment may be granted when the
pleadings, depositions, answers to interrogatories,
and admissions on file, together with the affidavits, if
any, show that there is no genuine issue as to any
material fact and that the moving party is entitled to
judgment as a matter of law. Pa.R.C.P. 1035(b),
42 Pa.C.S.A. When considering a motion for
summary judgment, the trial court must examine the
record in the light most favorable to the non-moving
party, accept as true all well-pleaded facts in the
non-moving party’s pleadings, and give him the
benefit of all reasonable inferences drawn therefrom.
Dibble v. Security of America Life Ins., 404
Pa.Super. 205, 590 A.2d 352 (1991); Lower Lake
Dock Co. v. Messinger Bearing Corp., 395
Pa.Super. 456, 577 A.2d 631 (1990). Summary
judgment should be granted only in cases that are
free and clear of doubt. Marks v. Tasman, 527 Pa.
132, 589 A.2d 205 (1991). We will overturn a trial
court’s entry of summary judgment only if we find an
error of law or clear abuse of discretion. Lower
Lake Dock Co., supra.
DeWeese v. Anchor Hocking Consumer and Indus. Products Group,
628 A.2d 421, 422-423 (Pa.Super. 1993).
In this case, the Barkers agreed to purchase the property from Jason
and Olivia Holland (“the Hollands”) “in its present condition,” i.e., “as is.”
We agree with the trial court that the clause is clear and unambiguous. In
PBS Coals, Inc. v. Burnham Coal Co., 558 A.2d 562 (Pa.Super. 1989),
appeal denied, 568 A.2d 1248 (Pa. 1989), this court examined a similar
provision in the context of a transfer of real property interests:
Here, the agreement contained a term which has
common meaning; when something is accepted
‘as is’ the buyer is put on notice that there may be
liabilities attendant to the purchase. The warranties
which may otherwise be implied by law do not attach
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when the buyer agrees to accept the goods in the
condition in which they are found.
Id. at 564. “The fact that the ‘as is’ clause was applied to a transfer of real
property interests as opposed to the sale of goods is not a sufficient basis for
permitting PBS to plead ignorance of the meaning of that term.” Id. at 564-
565.
Similarly, here, the Barkers agreed to buy the property “in its present
condition” and acknowledged that they had either inspected the property or
waived their right to do so. Therefore, the trial court did not err in
concluding that the Barkers had agreed to release any and all parties
responsible for defects on the property from future liability.
The Barkers argue that Dahlkemper was not an intended third-party
beneficiary of the Agreement and/or that the Agreement merged into the
deed and did not survive closing.2 “In order for a third party beneficiary to
have standing to recover on a contract, both contracting parties must have
expressed an intention that the third party be a beneficiary, and that
intention must have affirmatively appeared in the contract itself.”
Kirschner v. K & L Gates LLP, 46 A.3d 737, 762 (Pa.Super. 2012), appeal
denied, 65 A.3d 414 (Pa. 2013), quoting Scarpitti v. Weborg, 609 A.2d
147, 149 (Pa. 1992).
2
Dahlkemper complains that these arguments were not preserved in the
trial court. However, they were raised in the Barkers’ motion for
reconsideration. (Docket #39.8).
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In [Guy v. Liederbach, 459 A.2d 744 (Pa. 1983)],
our Supreme Court established a “narrow class of
third party beneficiaries.” Scarpitti, 609 A.2d at
151. This narrow exception established a “restricted
cause of action” for third party beneficiaries by
adopting Section 302 of the Restatement (Second) of
Contracts (1979). Scarpitti, 609 A.2d at 151.
Section 302 involves a two-part test to determine
whether one is a third party beneficiary to a
contract, which requires that (1) the recognition of
the beneficiary’s right must be appropriate to
effectuate the intention of the parties, and (2) the
performance must satisfy an obligation of the
promisee to pay money to the beneficiary or the
circumstances indicate that the promisee intends to
give the beneficiary the benefit of the promised
performance. Guy, 459 A.2d at 751 (quotation
marks omitted); accord Burks v. Fed. Ins. Co., 883
A.2d 1086, 1088 (Pa.Super. 2005). Thus, even
when the contract does not expressly state that the
third party is intended to be a beneficiary, the party
may still be a third party beneficiary under the
foregoing test. Burks, 883 A.2d at 1088. “But Guy
did not alter the requirement that in order for one to
achieve third party beneficiary status, that party
must show that both parties to the contract so
intended, and that such intent was within the parties’
contemplation at the time the contract was formed.”
Id.Id.
Instantly, the Barkers agreed to waive inspection and purchase the
property “in its present condition.” This “as is” clause manifested the
parties’ intent that the Barkers release any parties responsible for latent
defects in the property from liability, known or unknown. This would include
the landscape architect responsible for designing and building the retaining
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wall, i.e., Dahlkemper. As such, Dahlkemper was an intended third-party
beneficiary.
Finally, the Barkers contend that Paragraph 28(B) of the Agreement
merged into the deed upon sale and the parties did not intend that the
release should survive settlement.
The doctrine of merger provides that as a general
rule an agreement of sale merges into the deed and
no recovery may be had based upon an earlier
agreement. Stoever v. Gowen, 280 Pa. 424, 124
A. 684 (1924). Elderkin[, supra]. The merger rule
does not apply where the expressed intention of the
parties is to the contrary. Carsek Corp. v. Stephen
Schifter, Inc., 431 Pa. 550, 246 A.2d 365 (1968).
An agreement of sale is not merged as to matters
not to be consummated by the deed issued pursuant
to it and which are collateral to the deed.
Rappaport v. Savitz, 208 Pa.Super. 175, 220 A.2d
401 (1966).
Valvano v. Galardi, 526 A.2d 1216, 1220 n.2 (Pa.Super. 1987).
Obviously, in order for the “as is” provision to be effective, it would
have to survive closing. Furthermore, Dahlkemper was not a party to the
Agreement, and the deed issued from the Hollands to the Barkers has no
bearing on Dahlkemper’s release of liability by the “as is” agreement.
For these reasons, the trial court did not err in granting summary
judgment for Dahlkemper and dismissing the Barkers’ negligence claim.
Order affirmed.
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Judgment Entered.
Joseph D. Seletyn, Esq.
Prothonotary
Date: 10/20/2014
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