The Belgravia Condo. Assn. v. 1811 Belgravia Assoc ( 2015 )

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NON-PRECEDENTIAL DECISION - SEE SUPERIOR COURT I.O.P. 65.37
BELGRAVIA CONDOMINIUM IN THE SUPERIOR COURT OF
ASSOCIATION, PENNSYLVANIA
Appellee
v.
1811 BELGRAVIA ASSOCIATES
Appeal of: O’Donnell & Naccarato, Inc. No. 385 EDA 2014
Appeal from the Judgment entered November 27, 2013
In the Court of Common Pleas of Philadelphia County
Civil Division at No(s): May Term, 2010, No. 00946
BELGRAVIA CONDOMINIUM IN THE SUPERIOR COURT OF
ASSOCIATION, PENNSYLVANIA
Appellee
v.
1811 BELGRAVIA ASSOCIATES, L.P., ET
AL.
Appeal of: O’Donnell & Naccarato, Inc. No. 446 EDA 2014
Appeal from the Judgment entered November 27, 2013
In the Court of Common Pleas of Philadelphia County
Civil Division at No(s): May Term, 2010, No. 00946
BEFORE: PANELLA, J., OTT, J., and JENKINS, J.
MEMORANDUM BY JENKINS, J. FILED AUGUST 13, 2015
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A jury entered a verdict of $350,000.00 against O’Donnell &
Naccarato, Inc. (“Engineer”) in this civil action. Following denial of post-
verdict motions and entry of judgment, Engineer filed two appeals which this
court has consolidated for purposes of disposition.1 For the reasons
articulated below, we affirm the judgment at 385 EDA 2014 and quash the
appeal at 446 EDA 2014.
The Belgravia Building is a century-old building at 1811-19 Chestnut
Street in Philadelphia. In 2006, a developer, 1811 Belgravia Associates, and
other related parties2 started to convert the building into a condominium.
Also in 2006, in order to comply with the Uniform Condominium Act
(“UCA”),3 the Belgravia defendants hired Engineer to inspect the building
and report its findings. Engineer is a professional engineering firm that is in
the business of providing, among other things, structural engineering and
design services.
In 2010, Belgravia Condominium Association (“Association”) filed a
civil action against Engineer and the Belgravia defendants. Association
alleged that Engineer was liable for professional negligence and breach of
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1
Order dated May 19, 2014 (consolidating Engineer’s two appeals sua
sponte pursuant to Pa.R.A.P. 513).
2
We refer to all defendants other than Engineer as the “Belgravia
defendants”.
3
68 Pa.C.S. § 3101 et seq.
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the UCA on the grounds that Engineer’s inspection and report fell below the
standard of care for the engineering profession, and Engineer defrauded
purchasers of condominium units by revising its draft report to conceal
defects in the condition of the building.
At the close of Association’s case-in-chief, Engineer moved for a
compulsory nonsuit, arguing that its work was not negligent, and that it
complied with the UCA by identifying all visible defects.4 The trial court did
not formally deny Engineer’s motion on the record, but it is implicit from the
record that the court denied the motion because Engineer went on to
present its own witnesses. Engineer did not move for a directed verdict at
the close of evidence.
The verdict slip directed the jury to answer whether Engineer
“breached the standard of care applicable to professional engineers”, and
whether “[Engineer’s] breach of the standard of care caused Association
harm?”5 The jury answered “yes” to both questions and awarded $350,000
in compensatory damages to Association.6
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4
N.T., 6/14/13, at 22-31.
5
N.T. 6/19/13, at 12-13 (questions 1 and 2 on page 2 of verdict slip).
6
Id. The jury also held the Belgravia defendants liable for $3,800,000 in
compensatory damages and $900,000 in punitive damages. The Belgravia
defendants later settled with Association, leaving Engineer as the only
appellant in these appeals.
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Engineer filed timely post-verdict motions seeking judgment n.o.v.,
which the court denied, followed by a praecipe for entry of judgment against
itself. Engineer then filed two appeals, which we have consolidated.
Without ordering Engineer to file a Pa.R.A.P. 1925(b) statement, the trial
court filed a Pa.R.A.P. 1925(a) opinion.
Before turning to Engineer’s arguments, we explain why we quash its
second appeal. On December 12, 2013, Engineer filed its first notice of
appeal following entry of judgment against itself but before entry of a final
order relating to the Belgravia defendants. On January 2, 2014, the court
entered an order marking Association’s action against the Belgravia
defendants settled, discontinued and ended. This order disposed of all
remaining claims and parties and made Engineer’s first appeal ripe for
disposition. Pa.R.A.P. 905(a)(5) (“a notice of appeal filed after the
announcement of a determination but before the entry of an appealable
order shall be treated as filed after such entry and on the day thereof”).
On January 30, 2014, Engineer filed a second notice of appeal. It
appears that Engineer filed this appeal as a protective measure because it
was uncertain whether its first appeal was timely. Because Engineer’s first
appeal is ripe for disposition under Pa.R.A.P. 905, we quash its second
appeal as technically unnecessary. Pa.R.A.P. 1972(7) (appeal subject to
quashal for “any … reason appearing on the record”).
Engineer raises three issues in its first appeal:
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The trial judge erred by not applying the economic
loss doctrine to bar claims for what are solely
economic losses.
The trial judge erred in denying [Engineer’s] posttrial
motion for jnov in a case where: [Association’s]
experts could not state what defects existed at the
time of the inspection; recommendations made by
the inspecting engineer were not followed by the
owners; and no analysis was offered on how the
allegedly improper inspection caused any damages.
[Engineer] did not waive its right to appeal the
denial of a post-trial motion seeking jnov.
Brief For Appellant, pp. 13, 14, 25.
In its first argument, Engineer contends that it is entitled to judgment
n.o.v. because the economic loss doctrine precludes Association’s claims of
monetary damage. The economic loss doctrine provides that no cause of
action exists for negligence that results solely in economic damages
unaccompanied by physical injury or property damage. Adams v. Copper
Beach Townhome Communities, L.P., 816 A.2d 301, 305
(Pa.Super.2003). Engineer waived this argument by failing to move for a
compulsory nonsuit or directed verdict on this issue during trial.
A motion for judgment n.o.v. is a post-trial motion which requests the
trial court to enter judgment in favor of the moving party. There are two
bases on which the court can grant judgment n.o.v.:
[O]ne, the movant is entitled to judgment as a
matter of law and/or two, the evidence is such that
no two reasonable minds could disagree that the
outcome should have been rendered in favor of the
movant. With the first, the court reviews the record
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and concludes that even with all factual inferences
decided adverse to the movant the law nonetheless
requires a verdict in his favor, whereas with the
second, the court reviews the evidentiary record and
concludes that the evidence was such that a verdict
for the movant was beyond peradventure.
Polett v. Public Communications, Inc., 83 A.3d 205, 212
(Pa.Super.2013). In an appeal from the trial court’s decision to deny
judgment n.o.v.,
we must consider the evidence, together with all
favorable inferences drawn therefrom, in a light most
favorable to the verdict winner. Our standard of
review when considering motions for a directed
verdict and judgment notwithstanding the verdict are
identical. We will reverse a trial court’s grant or
denial of a judgment notwithstanding the verdict
only when we find an abuse of discretion or an error
of law that controlled the outcome of the case.
Further, the standard of review for an appellate court
is the same as that for a trial court.
Id. at 211.
To preserve a motion for judgment n.o.v. for appeal, the appellant
must either move for a compulsory nonsuit or a directed verdict during trial.
The most comprehensive discussion of this point is in Haan v. Wells, 103
A.3d 60 (Pa.Super.2014), where this Court held that the Haans waived their
challenge to the sufficiency of the evidence underlying the Wells’
counterclaim by failing to move for a compulsory nonsuit or directed verdict
during trial. We reasoned:
Regarding the Haans’ sufficiency challenge, our
review of the record demonstrates that the Haans
did not raise such a claim by oral or written motion
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with the trial court either for a nonsuit or a directed
verdict. In Bennyhoff v. Pappert, 790 A.2d 313
(Pa.Super.2001), we set forth the following with
regard to preserving a sufficiency claim:
Pursuant to Pa.R.C.P. 230.1(c), a trial
court may enter a nonsuit in favor of any
or all [ ] defendants, if, at the close of
the plaintiff’s case against all defendants,
the plaintiff has failed to establish a right
to relief. ‘A motion for compulsory
nonsuit allows a defendant to test the
sufficiency of a plaintiff’s evidence.’
Harnish v. School District of
Philadelphia, [] 732 A.2d 596, 598
(Pa.1999). A sufficiency of the evidence
claim may also be raised through a
motion for a directed verdict. Lear, Inc.
v. Eddy, 749 A.2d 971 (Pa.Super.2000).
Bennyhoff, 790 A.2d at 317 (citation modified).
Because the appellant in Bennyhoff failed to
request either a nonsuit or a directed verdict, we
concluded that the appellant’s sufficiency challenge
was waived. Id.
In Estate of Hicks v. Dana Companies, LLC, 984
A.2d 943 (Pa.Super.2009) (en banc), an en banc
panel of this Court noted that the appellants in an
asbestos case had preserved a challenge to the
sufficiency of the evidence by making an oral motion
for a directed verdict at the close of the evidence.
Id. at 951 n. 3 (citing Hayes v. Donohue Designer
Kitchen Inc., 818 A.2d 1287, 1291 n. 4
(Pa.Super.2003)) (stating ‘cases indicate that in
order to preserve the right to request a JNOV post-
trial[,] a litigant must first request a binding charge
to the jury or move for a directed verdict at trial’).
Finally, our Commonwealth Court has recognized,
and adopted, this Court’s adherence to the principle
that sufficiency challenges must first be raised before
the trial court by a motion for a directed verdict. In
Com. Dept. of Gen. Servs. v. U.S. Mineral Prods.
Co., 927 A.2d 717 (Pa.Cmwlth.2007), the
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Commonwealth Court, citing Bennyhoff and
Thomas Jefferson Univ. v. Wapner, 903 A.2d
565, 570 (Pa.Super.2006), explained that ‘our
Superior Court requires a motion for directed verdict
during trial as a prerequisite to a post-trial motion
for JNOV based on the state of the evidence.’ U.S.
Mineral Prods., 927 A.2d at 725. The
Commonwealth Court adopted our approach
‘[b]ecause this approach has the salutary effect of
submitting the issue to the trial judge for initial
evaluation during trial, when the proofs are still
fresh, and is consistent with past practice and with
the current rule governing post-trial practice.’ Id.
Consequently, the Commonwealth Court limited its
appellate review in that case to the appellants’
challenge to the weight of the evidence, and found
any challenges to the sufficiency of the evidence to
be waived. Id.
Hence, it is clear that, in order to preserve a
challenge to the sufficiency of the evidence, the
Haans first were required in this non-jury trial to
move either for a nonsuit or a directed verdict.
See Youst v. Keck’s Food Serv., Inc., 94 A.3d
1057, 1071 (Pa.Super.2014). The Haans did not do
so. Consequently, any of the Haans’ challenges
purporting to challenge the sufficiency of the
evidence offered to prove the Wells’ ownership of
Parcel No. 2 are waived.
Haan, 103 A.3d at 67-68 (footnotes omitted) (emphasis added).
Here, Engineer did not move for a directed verdict at the close of
evidence. And while it moved for a compulsory nonsuit at the close of
Association’s case, it neglected to raise any economic loss doctrine argument
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at that time.7 Consequently, Engineer has waived its right to raise the
economic loss doctrine in this appeal. Haan, supra.
Engineer claims incorrectly that it preserved its motion for judgment
n.o.v. on the economic loss doctrine by raising it in preliminary objections
and then again in post-verdict motions. Under Haan, however, Engineer
was required to move for a compulsory nonsuit or directed verdict to give
the trial court the opportunity to decide whether the trial evidence was
sufficient to go to the jury. The fact that Engineer filed preliminary
objections on the economic loss doctrine is of no moment, because
preliminary objections only test whether the complaint states a valid cause
of action, not whether the trial evidence is sufficient to go to the jury.
Meeting House Lane, Ltd. v. Melso, 628 A.2d 854 (Pa.Super.1993),
the decision Engineer cites for the proposition that it preserved the economic
loss argument for appeal, is not on point. The trial court in Melso held that
the appellant waived all issues in his post-trial motion because the motion
failed to specify where he had raised the issues prior to verdict. This Court
held a mere defect in form in post-verdict motions did not result in waiver
because the appellant raised all issues in pretrial proceedings or during trial.
Id., 628 A.2d at 857. The present case involves a fundamental trial error by
counsel for Engineer, not a mere technical defect in the form of post-verdict
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7
N.T., 6/14/13, at 22-31.
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motions: counsel neglected to argue during trial that the trial evidence was
insufficient as a matter of law under the economic loss doctrine. Counsel’s
omission results in waiver under Haan.
In its second argument on appeal, Engineer contends that the trial
court erred in denying judgment n.o.v. for four reasons: (1) Association
made no showing that the defects in the building were visible; (2)
Association’s experts did not testify with the requisite degree of engineering
certainty; (3) there was no proof tying the relationship between Engineer’s
conduct and the amount of money damages caused to Association; and (4)
Engineer’s conduct in 2006 was too remote in time to constitute the
proximate cause of the damages, and there were other intervening causes of
harm, such as other inspections conducted after Engineer’s failure to
uncover defects, and Association’s failure to perform proper maintenance
after 2006.8
Subpart I is a claim that Association failed to prove that Engineer
breached the applicable standard of care. Engineer contends that the proper
standard of care is a duty to discover visible defects that is embodied in
section 4-106 of the UCA, codified at 68 Pa.C.S. § 3404. Brief For Appellant,
p. 15. This argument is unconvincing for two reasons: the UCA does not
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8
Because Engineer has grouped these four issues under one heading in its
brief, we will refer to them as “Subpart I”, “Subpart II”, “Subpart III” and
“Subpart IV”.
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provide the applicable standard of care for Engineer, and even if the UCA
provides the correct standard, the evidence demonstrates that Engineer
breached it.
68 Pa.C.S. § 3404 provides in relevant part:
(a) The public offering statement of a
condominium containing a conversion building
must contain …
(1) A statement by the declarant, based on a
report prepared by an independent registered
architect or professional engineer:
(i) describing the age and present condition
and, if known or reasonably ascertainable, the
dates of construction, installation and major
repairs of all structural components and
mechanical and electrical installations,
including, but not limited to, roofs, plumbing,
heating, air conditioning and elevators,
material to the use and enjoyment of the
condominium; and
(ii) describing the results of the inspection of
the units and common elements required
pursuant to section 3411(c) (relating to
warranty against structural defects) for visible
conditions that adversely affect the health or
safety of residential occupants. The statement
should also state the extent to which the
report by the architect or professional engineer
is based upon a visual inspection of the units
as well as the common elements.
68 Pa.C.S. § 3404 (emphasis added). The UCA defines “declarant” as
follows:
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(1) If the condominium has been created,
‘declarant’ means:
(i) any person who has executed a declaration,
or an amendment to a declaration to add
additional real estate, other than persons
holding interests in the real estate solely as
security for an obligation, persons whose
interests in the real estate will not be conveyed
to unit owners, or, in the case of a leasehold
condominium, a lessor who possesses no
special declarant rights and who is not an
affiliate of a declarant who possesses special
declarant rights; or
(ii) any person who succeeds under section
3304 (relating to transfer of special declarant
rights) to any special declarant rights.
(2) If the condominium has not yet been
created, ‘declarant’ means any person who
offers to dispose of or disposes of his interest
in a unit to be created and not previously
disposed of.
(3) If a declaration is executed by a trustee of
a land trust, ‘declarant’ means the beneficiary
of the trust.
68 Pa.C.S. § 3103. A “declaration” is a document that creates the
condominium and defines its basic elements, such as the number of units,
boundaries, common elements, etc. 68 Pa.C.S. § 3205 (contents of
declaration).
The standards prescribed in section 3404 only apply to declarants, i.e.,
signers of the declaration. Engineer is not itself a “declarant”; it merely
provides a report to the declarant about the condition of the condominium.
Thus, the standards prescribed under section 3404, including the duty to
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report “visible conditions that adversely affect the health or safety of
residential occupants,” does not apply to Engineer.
Assuming arguendo that the “visible condition” standard applies to
engineers, Association presented evidence that Engineer overlooked visible
defects in the building and failed to mention these defects in its 2006 report.
Patrick McCoy, one of Association’s experts, testified that Engineer (1) failed
to have a licensed engineer perform a sufficient visual assessment and write
the report,9 (2) failed to investigate cracks in the mortar joints which were
visible in 2006 and would have led to discovery of distress in the facade,10
(3) failed to observe visibly corroded iron cast balconies on top of terra
cotta, missing mortar joints and severe deterioration in the mortar,11 (4)
failed to comply with the UCA by not reviewing public records of the
building,12 (5) failed to identify issues with rainwater conductors that existed
in 2006 and which caused severe water damage and corrosion,13 and (6)
deleted or altered portions of its draft report to cover up these defects.14
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9
N.T., 6/12/13 (PM), at 31-32, 42-43.
10
Id. at 41-42.
11
Id. at 31-32.
12
Id. at 44-45.
13
Id. at 33-35.
14
Id. at 63-64.
(Footnote Continued Next Page)
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McCoy testified that Engineer overlooked visible safety hazards during
its 2006 inspection and neglected to mention them in its report. According
to McCoy, (1) Engineer failed to notice that rain water conductors were
failing and causing corrosion on the steel deck15; (2) Engineer did not notice
“severe deterioration” to the balconettes that “was the same then [in 2006]
as when [McCoy] did [his] inspection in 2011, and … some of those joints
were opened up and … there was already cracking and mortar that was
missing”16; (3) Engineer failed to note the lack of maintenance in any
facades or windows from 1983 to 2006, even though the trim around the
windows was “completely rotten”17; and (4) Engineer ignored severe
corrosion on the portico in front of the building in 2011.18
Thus, even if the “visible condition” standard was the proper test,
Association presented sufficient evidence to satisfy it.19
_______________________
(Footnote Continued)
15
Id. at 34-35. McCoy testified that he “believe[d]” that a licensed
professional engineer would have observed this defect and included it in its
report. Id. at 35. The verb “believe” did not make his testimony
insufficient, because he later testified that all of his opinions were within a
reasonable degree of engineering certainty. Id. at 70-71.
16
Id. at 41-42.
17
Id. at 49-51.
18
Id. at 55-56.
19
Engineer not only fails to convince us that section 3404 is the proper
standard of care, but he also fails to identify the proper standard or analyze
the evidence under the proper standard. Therefore, Engineer has waived
(Footnote Continued Next Page)
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In Subpart II, Engineer claims that Association’s experts failed to
testify with the requisite degree of engineering certainty. Engineer waived
this argument by failing to make it at the compulsory nonsuit or directed
verdict stages. Haan, 103 A.3d at 67-68. Even if Engineer preserved this
issue, two of Association’s experts testified that their opinions were within a
reasonable degree of certainty in their respective fields.20
Engineer argues in Subpart III that Association failed to prove any
relationship between Engineer’s conduct and the amount of money damages
caused to Association. Engineer disregards McCoy’s testimony that the
deletions and alterations to the draft report caused the following damages:
$287,000 for elevator repairs, $41,448 for providing an adequate accessible
entrance, $20,000 to repair steel platform and stairs, and $15,000 to repair
corroded beams and cracked concrete in the basement.21 McCoy also
observed that Association would incur $228,808.30 to repair the roof and
$65,600 to repair structural defects in the building.22 Another expert,
_______________________
(Footnote Continued)
the argument that the evidence fails to satisfy the correct standard of care.
Owens v. Mazzei, 847 A.2d 700, 705-06 (Pa.Super.2004) (issues waived
due to lack of argument in appellate brief).
20
N.T., 6/12/13 (PM), at 70-71 (McCoy), 82-83 (Nevel).
21
Id. at 67-70.
22
Id. at 27.
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William Payne, gave exhaustive testimony about the damage caused to the
building,23 and testified that Association incurred $400,000 in hazard
mitigation expenses and $900,000 for waterproofing and aesthetic repairs. 24
In Subpart IV, Engineer contends that its conduct in 2006 was not the
proximate cause of Association’s harm, because Engineer’s conduct was too
remote in time, and there were other intervening causes of harm, such as
other inspections conducted after Engineer’s failure to uncover defects, and
Association’s failure to perform proper maintenance after 2006. Engineer
has waived this argument by making a different argument on appeal than it
made below. Engineer’s lone causation argument at the nonsuit stage was
that Association was contributorily negligent because it failed to review
public documents (a Deed of Façade Easement and title report) that would
have alerted Association to any problems. Association, Engineer argued,
“[was] on constructive or actual notice of the deed of façade easement,” but
from 2006 onward, “nobody decided to follow the … mandates of the
easement” with “constant inspections, constant vigilance.”25 In this Court,
however, Engineer argues that Association ignored Engineer’s
recommendations for repair work/maintenance, a separate and distinct
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23
N.T. 6/13/13, at 17-70.
24
N.T. 6/13/13, at 17.
25
N.T. 6/14/13, at 25, 26.
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matter from Assocation’s failure to follow the easement. Because Engineer
failed to argue at the compulsory nonsuit stage that Association ignored its
recommendations for repair work/maintenance, it waived this point on
appeal. Haan, 103 A.3d at 67-68.
In its third and final argument on appeal, Engineer contends that it did
not waive its right to appeal the denial of a post-trial motion seeking
judgment n.o.v. We have addressed this issue above in the foregoing
discussion by identifying several issues that Engineer waived by failing to
raise them at the compulsory nonsuit or directed verdict stages of trial.
For these reasons, the trial court properly denied Engineer’s post-trial
motions seeking judgment n.o.v.
Judgment affirmed at 385 EDA 2014. Appeal quashed at 446 EDA
2014.
Judgment Entered.
Joseph D. Seletyn, Esq.
Prothonotary
Date: 8/13/2015
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