Streiner, P. v. Baker Residential ( 2016 )

J-A05037-16
NON-PRECEDENTIAL DECISION - SEE SUPERIOR COURT I.O.P. 65.37
PATRICIA STREINER, IN THE SUPERIOR COURT OF
PENNSYLVANIA
Appellant
v.
BAKER RESIDENTIAL OF PENNSYLVANIA,
LLC.,
Appellee No. 1253 EDA 2015
Appeal from the Order Dated April 2, 2015
In the Court of Common Pleas of Chester County
Civil Division at No(s): No. 2013-08762
BEFORE: OLSON, J., OTT, J., and STEVENS, P.J.E.*
MEMORANDUM BY STEVENS, P.J.E.: FILED JUNE 09, 2016
Appellant Patricia Streiner appeals from the order entered in the Court
of Common Pleas of Chester County granting summary judgment in favor of
Appellee Baker Residential of Pennsylvania, LLC. We affirm.
The lower court provides an apt summary of case history as follows:
PROCEDURAL HISTORY
[Appellant] filed her Complaint on December 12, 2013 alleging:
Count I – Negligent Misrepresentation and Failure to Disclose
Material Defects; and Count II – Breach of Implied Warranty of
Habitability, Reasonable Workmanship and Fitness for Particular
Purpose based on alleged defects in the construction of her
home.[1] Baker filed its Answer and New Matter on June 6, 2014.
____________________________________________
1
Specifically, Appellant averred “[s]ince the time of construction, [Appellant]
has become aware of certain structural defects in the Property existing at
the time of settlement including, inter alia, [twelve alleged defects involving
(Footnote Continued Next Page)
*Former Justice specially assigned to the Superior Court.
J-A05037-16
[Appellant] filed her Answer to Baker’s New Matter on
September 4, 2014. Baker’s Motion for Summary Judgment
[attaching its written disclaimer of all implied warranties as
contained within the parties’ Agreement of Sale] was filed
November 3, 2014 and [Appellant]’s response was filed on
December 18, 2014. Both parties filed reply briefs and the Court
issued the Order which is the subject of this appeal on April 2,
2015. [Appellant] timely filed her appeal on May 1, 2015.
DISCUSSION
[Appellant]’s complaint alleges the following: On or about July
24, 2003, [Appellant] signed an Agreement of Sale (Agreement)
for the construction of a single-family residence. Settlement on
the property occurred on or about October 1, 2003. Baker
(along with co-Defendant Iacoabucci Fortress, LLC) are alleged
to be the builders. According to the Complaint “[s]ince the time
of construction, [Appellant]s [sic] have [sic] become aware of
certain structural defects in the Property existing at the time of
settlement . . .” The Complaint then proceeds to list various
alleged defects. In support of her claim for Negligent
Misrepresentation, [Appellant] merely asserts that: “[d]espite
actual knowledge of the failures and omissions of construction
stated hereinabove and the material defects which such failures
and omissions constituted, defendants failed to disclose the
material defects in the Property to [Appellant]s.” [Appellant]
further alleges that she justifiably relied upon the non-
disclosure. In support of her claim for Breach of Implied
Warranties, [Appellant] merely alleges that the aforementioned
alleged defects breach the implied warranties of habitability,
reasonable workmanship and fitness for a particular purpose.
Paragraph 21 of the Agreement states: “All warranty provisions
are set forth in the Customer Care Manual delivered to
[[Appellant]] prior to execution of this Agreement; by execution
of this Agreement, [[Appellant]] acknowledges receipt, review
_______________________
(Footnote Continued)
substandard materials, construction methods and/or application of sealants
that impaired the Property’s ability to repel water properly and,
consequently, caused regular and persistent water infiltration damage to the
Property of at least $90,000.]” Complaint, filed November 8, 2013, at ¶¶
17-20.
-2-
J-A05037-16
and acceptance of the terms of said Customer Care Manual. ALL
OTHER EXPRESS OR IMPLIED WARRANTIES ARE EXCLUDED,
INCLUDING SPECIFICALLY ANY IMPLIED WARRANTIES OF
MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE,
REASONABLE WORKMANSHIP, OR HABITABILITY.” (emphasis in
original). In addition, [Appellant] applied for and was provided a
ten year written warranty (“Home Owner’s Warranty”) from
Western Pacific Mutual Insurance Company [pursuant to the
Agreement of Sale]. The application specifically states that
[Appellant] understands and agrees that this warranty is
provided by Baker in lieu of all other warranties and that Baker
“makes no warranty, express or implied as to quality, fitness for
a particular purpose, merchantability, habitability, or otherwise .
. . .”[2]
Lower Court Opinion, filed June 29, 2015, at 1-2.3
____________________________________________
2
Specifically, the Home Owner’s Warranty provides:
1. One Year Coverage: Your Builder warrants that for a period
of one (1) year after the Effective Date of Warranty,
warranted items will function and operate as presented in the
Warrant Standards of Year 1, Section III. A. Coverage is
ONLY available where specific Standards and Actions are
represented in this Limited Warranty. . . .
2. Two Year Coverage: Your Builder warrants that for a period
of two (2) years from the Effective Date Of Warranty, specific
portion of the heating, cooling, ventilating, electrical and
plumbing systems, as defined in this Limited Warranty, will
function and operate as presented in the Warranty Standards
of Years 1 and 2 only, Section III. B. . . .
3. Ten Year Coverage: Major Structural Defects (MSD) are
warranted for ten (10) years from the Effective Date of
Warranty. Your Builder is the Warrantor during Years 1 and 2
of this Limited Warranty and the Insurer is the Warrantor in
Years 3 through 10.
The effective date of the Home Owner’s Warranty was October 1, 2003, and
the warranty ran for ten years until September 30, 2013, when it expired.
Appellant filed the present action on December 12, 2013.
3
Additionally, Paragraph 22 of the Agreement of Sale provides:
Entire Agreement. This writing contains the entire agreement
between the parties. No representation, claim, statement,
(Footnote Continued Next Page)
-3-
J-A05037-16
In granting Baker’s motion for summary judgment, the lower court
determined that Appellant filed a response resting upon the mere allegations
of her pleadings and had otherwise disclaimed all implied warranties by
virtue of clear and specific language contained in the agreement of sale. The
court opined:
With regard to Count I, [Appellant], who bears the burden of
proof, has failed to come forward with any factual evidence to
support her claim. She has put forth nothing other than the bald
assertions in the Complaint which have been referenced above.
With regard to Count II, the clauses waiving the implied
warranties have been fully set forth above and, despite
[Appellant]’s arguments to the contrary, do comply with the
criteria set forth in Tyus v. Resta, 476 A.2d 427 (Pa.Super.
1984).
Opinion at 4. This timely appeal followed.
We set forth our standard of review from the grant of summary
judgment:
A motion for summary judgment should only be granted if there
is no genuine issue regarding any material fact, and the moving
party is entitled to judgment as a matter of law. An appellate
_______________________
(Footnote Continued)
advertising, promotional activity, brochure or plan of any kind
made prior to the date of this Agreement or contemporaneously
herewith by the Seller or Seller’s agent, representative,
salesman or officer shall be binding upon the Seller unless fully
set forth herein. No agent, representative, salesman or officer of
the parties hereto has the authority to make or has made any
statement, agreement, representation or contemporaneous
agreement, oral or written , in connection therewith modifying,
adding to or changing the terms and conditions set forth herein.
No dealing between the parties or customers shall be permitted
to delete, contradict, vary or add to the terms thereof. . . .
-4-
J-A05037-16
court may reverse an order granting summary judgment where
there is an error of law or an abuse of discretion. Because the
question of whether a genuine issue of material fact exists is one
of law, appellate review is de novo. In undertaking such review,
the record is viewed in the light most favorable to the non-
moving party, and all doubts as to whether a genuine issue
exists are resolved against the moving party.
Smith v. Township of Richmond, 82 A.3d 407, (Pa. 2013) (citation
omitted).
Appellant first argues that the lower court erred in granting summary
judgment in favor of Baker as to the implied warranty claims because the
latent defects present in her home were not “terms, conditions or features of
the Agreement of Sale between the parties.” Appellant’s brief at 9. Such
latent defects, Appellant maintains, are not the kind that a consumer would
expect in newly constructed home, and they cannot fairly be said, therefore,
to have been contemplated in the implied warranty waiver language present
in the agreement. We disagree.
Pennsylvania law recognizes an implied warranty of
habitability in contracts where builders-vendors sell new homes
to residential purchasers. The implied warranty requires that a
builder, typically more skilled and experienced in the
construction field than the purchaser, bear the risk that a home
he built will be functional and habitable in accordance with
contemporary and community standards. Although the implied
warranty may be waived by clear and unambiguous contract
language, such language must be sufficiently particular to inform
the home purchaser of the right he or she is waiving.
Furthermore, the contract must always be construed against the
builder and in order to exclude warranty coverage for latent
defects, language of disclaimer must refer to its effect on
specifically designated, potential latent defects.
-5-
J-A05037-16
Pontiere v. Dinert, 627 A.2d 1204, 1206 (Pa.Super. 1993) (internal
quotations and citations omitted).
In concluding the parties’ contract sufficiently excluded all implied
warranties covering the home, the lower court relied on this Court’s decision
in Tyus, supra, in which we recognized that builder-vendors could
contractually limit or disclaim implied warranties. The very nature of implied
warranties, Tyus clarified, is that they pertain only to latent defects, as they
do not “extend to defects of which the purchaser had actual notice or which
are or should be visible to a reasonably prudent man upon an inspection of
the dwelling.” Id. at 433 (citations omitted). Moreover, “the warranties of
habitability and reasonable workmanship are not created by representations
of a builder-vendor but rather are implied in law and as such, exist
independently of any representations of a builder-vendor[,] Tyus explained.
Id.
Because the contractual clause at issue in Tyus was predicated upon
representations made by the builder-vendor and made no clear and specific
reference to its effect upon implied warranties,4 we determined that it failed
____________________________________________
4
In Tyus, paragraph thirteen of the vendors' contract with the buyers
stated in pertinent part:
Buyer has inspected the property or hereby waives the right to
do so and he has agreed to purchase it as a result of such
inspection and not because of or in reliance upon any
representation made by the Seller ... and that he has agreed to
purchase it in its present condition unless otherwise specified
(Footnote Continued Next Page)
-6-
J-A05037-16
to disclaim the warranties of habitability and reasonable workmanship
implied in the law:
Thus, the integration clause of paragraph thirteen may be
regarded as sufficient to exclude a matter which one of the
parties might contend was in fact agreed to prior to the signing
of the contract. . . . [S]tanding alone, these words are not
sufficient to exclude an implied warranty, which is applicable
only by operation of law. Such an exclusion, if desired by the
parties to a contract for the purchase of a residence, should be
accompanied by clear, unambiguous language, reflecting the fact
that the parties fully intended such result. . . . That is, the
integration clause of paragraph thirteen does not constitute a
valid limitation of the implied warranties because it fails to
explain with particularity its purported effect on implied
warranties.
Therefore, we hold that when the alleged disclaimer of
implied warranties in paragraph thirteen of the parties' contract
is strictly construed against the Vendors, the alleged disclaimer
fails because it does not refer to its impact on specific, potential
latent defects and so does not notify the Buyers of the implied
warranty protection they are waiving by signing the contract
supplied by the Vendors.
Id. at 434-35. (internal citation and quotation marks omitted).
In the case sub judice, the disclaimer appearing in Paragraph 21 of the
Agreement of Sale, supra, clearly, specifically, and, therefore, sufficiently
notified Appellant that she was waiving all implied warranty protections by
_______________________
(Footnote Continued)
herein. It is further understood that this agreement contains the
whole agreement between the Seller and the Buyer and there
are no other terms, obligations, covenants, representations,
statements or conditions, oral or otherwise of any kind
whatsoever concerning this sale.
Id. at 432.
-7-
J-A05037-16
signing the contract supplied by Baker. By definition, the latent defects of
which she now complains are implicitly covered by implied warranties of
habitability, workmanship, fitness for a particular purpose, and
merchantability, all of which Baker conspicuously disclaimed under the
parties’ agreement. Therefore, we discern no error in the lower court’s
pronouncement that Appellant is entitled to no relief on this claim.
Our determination in this regard also defeats Appellant’s negligent
misrepresentation claim as she presents it on appeal. Appellant predicates
this claim on the argument that Baker induced her purchase through both
affirmative statements on the quality of the home combined with failures to
disclose home quality-compromising material defects of which it should have
been aware. Effectively acknowledging, however, that the alleged defects
are identical to the those that would be subject to Baker’s disclaimer of all
implied warranties in the parties’ agreement of sale if deemed valid,
Appellant argues that she may prevail on the claim because Baker “did not
limit or disclaim the implied warranties of workmanship or habitability, and
that the aspect of latent defects and specific features of workmanship were
neither waived nor excluded.” Appellant’s brief at 12. Our validation of
Baker’s disclaimer of all implied warranties undercuts the predicate of
Appellant’s negligent misrepresentation claim, rendering it devoid of merit. 5
____________________________________________
5
There exist other bases upon which to affirm summary judgment with
respect to Appellant’s negligent misrepresentation claim. First, the claim,
(Footnote Continued Next Page)
-8-
J-A05037-16
_______________________
(Footnote Continued)
based as it is on pre-contractual statements and nondisclosures allegedly
made by Baker, would fail under the parole evidence rule, which provides as
follows:
where the parties, without any fraud or mistake, have
deliberately put their engagements in writing, the law declares
the writing to be not only the best, but the only evidence of their
agreement; that all preliminary negotiations, conversations and
verbal agreements are merged in and superseded by the
subsequent written contract; and that unless fraud, accident, or
mistake be averred, the writing constitutes the agreement
between the parties, and its terms cannot be added to nor
subtracted from by parol evidence.
Toy v. Metropolitan Life Ins. Co., 928 A.2d 186, 204 (Pa. 2007)
(quotation marks and citation omitted). “Once a writing is determined to be
the parties' entire contract, the parol evidence rule applies and evidence of
any previous oral or written negotiations or agreements involving the same
subject matter as the contract is almost always inadmissible to explain or
vary the terms of the contract.” Youndt v. First Nat. Bank of Port
Allegany, 868 A.2d 539, 546 (Pa.Super. 2005) (quoting Yocca v.
Pittsburgh Steelers Sports, Inc., 854 A.2d 425, 436 (Pa. 2004)).
The parties’ written contract makes plain that no implied warranty
applied to the home. Accordingly, the parole evidence rule bars Appellant’s
attempt to avoid the disclaimer through invocation of pre-contractual
conversations, during which Baker’s agents allegedly misrepresented
through statement and omission the construction quality of the home.
Relatedly, Appellant fails to direct us to any other language in the contract
amounting to an express warranty that would contradict or undermine the
disclaimer of implied warranties, and so she may not prevail on this ground,
either. See, e.g., Morningstar v. Hallett, 858 A.2d 125, 131 (Pa.Super.
2004) (holding where contract contained terms creating express warranty as
to age of horse to be delivered, “as is” clause elsewhere in contract could
not disclaim that express warranty).
Second, Appellant posits that she adequately supported her claim with
allegations that Baker failed to disclose material defects within the home it
built and, ultimately, sold to her. We disagree. In her complaint, she
averred Baker “failed to disclose the material defects in the Property to
plaintiffs . . . despite actual knowledge of the failures and omissions of
construction . . . [and] under circumstances in which such defendants ought
to have known the existence of such defects and yet failed to disclose the
same recklessly or for failure to make a reasonable investigation concerning
the nature of the Property they were selling.” Complaint, at ¶¶ 22 and 23.
(Footnote Continued Next Page)
-9-
J-A05037-16
In her final claim, Appellant asserts the disclaimer of warranties and
accompanying warranty application she opted to complete as part of the
Agreement of Sale together formed an unconscionable contract of adhesion.
She contends she was given no opportunity to challenge or change the
operative terms of the referenced documents, which, she insists, were
_______________________
(Footnote Continued)
Appellant echoed a similar boilerplate averment, without providing specific
evidence of fact, in her Response to Baker’s motion for summary judgment,
which averred Appellant failed to provide any specific facts to establish her
claim of negligent misrepresentation. Specifically, in her Response Appellant
asserted she “justifiably relied upon and reasonably believed the
representations of the Defendant and their agents with regard to the quality
of the new house being sold to her.” Response, filed December 18, 2014, at
15.
Where a motion for summary judgment is based upon
insufficient evidence of facts, the adverse party must come
forward with evidence essential to preserve the cause of action.
If the non-moving party fails to come forward with sufficient
evidence to establish or contest a material issue to the case, the
moving party is entitled to judgment as a matter of law. The
non-moving party must adduce sufficient evidence on an issue
essential to its case and on which it bears the burden of proof
such that a jury could return a verdict favorable to the non-
moving party.
McCarthy v. Dan Lepore & Sons Co., 724 A.2d 938, 940 (Pa.Super. 1998)
(citation omitted). Accord Swarner v. Mut. Ben. Grp., 72 A.3d 641, 651
(Pa.Super. 2013) (recognizing Rule 1035.2 obligation placed on non-movant
plaintiff to offer proof of injuries to avoid entry of summary judgment where
defendant’s motion for summary judgment alleged failure to produce any
evidence). Consistent with this authority, we would find Appellant failed to
produce essential, specific factual support for her claim to avoid summary
judgment, as Baker’s motion presented documentary support in opposition
to the negligent misrepresentation claim and otherwise challenged Appellant
to support her claim with evidence of fact.
- 10 -
J-A05037-16
presented in a “take it or leave it” fashion by a party more sophisticated in
such matters than she. Her choice, she maintains, was to either accept the
contractual terms and conditions—which, she claims consisted of uncommon
language—or, instead, to walk away from the transaction.
“An adhesion contract is a ‘standard-form contract prepared by one
party, to be signed by the party in a weaker position, usu[ally] a consumer,
who adheres to the contract with little choice about the terms.’”
Chepkevich v. Hidden Valley Resort, L.P., 2 A.3d 1174, 1190 (Pa. 2010)
(quoting Black's Law Dictionary (8th Ed.2004), p. 342). “[T]he
determination that an adhesion contract is at issue, by definition fulfills the
second prong of the unconscionability test.” McNulty v. H & R Block, Inc.,
843 A.2d 1267, 1273 n.6 (Pa.Super. 2004) (”[a] determination of
unconscionability requires a two-fold determination: 1) that the contractual
terms are unreasonably favorable to the drafter, and 2) that there is no
meaningful choice on the part of the other party regarding the acceptance of
the provisions.”).
We discern nothing unconscionable about the warranty disclaimer and
accompanying warranty in the Agreement of Sale. Both types of
instruments are fairly commonplace, the disclaimer and warranty at issue
contain standard language for instruments of their respective kind, and they
contain no unusual or unexpected terms or conditions that would prove
difficult to understand. Nor do we find the contract unreasonably favorable
to Baker as the seller/drafter, as the warranty supplied to Appellant as part
- 11 -
J-A05037-16
of the agreement afforded her substantive protections against various
malfunctions and defects to her home over the course of ten years. Because
the parties’ contract was not unconscionable, this claim fails.
Order is affirmed.
Judge Ott joins the memorandum.
Judge Olson concurs in the result.
Judgment Entered.
Joseph D. Seletyn, Esq.
Prothonotary
Date: 6/9/2016
- 12 -