Krishnan v. Cutler Group, Inc. , 171 A.3d 856 ( 2017 )

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J-A14014-17
J-A14015-17
2017 Pa. Super. 312
ARUN KRISHNAN AND ARUNA ARUN IN THE SUPERIOR COURT OF
NARAYANAN, PENNSYLVANIA
Appellees
v.
THE CUTLER GROUP, INC.,
Appellant No. 2614 EDA 2016
Appeal from the Judgment Entered August 24, 2016
In the Court of Common Pleas of Chester County
Civil Division at No(s): 2012-02209-CT
ARUN KRISHNAN AND ARUNA ARUN IN THE SUPERIOR COURT OF
NARAYANAN, PENNSYLVANIA
Appellants
v.
THE CUTLER GROUP, INC., D/B/A THE
DAVID CUTLER GROUP,
Appellee No. 2745 EDA 2016
Appeal from the Judgment Entered August 24, 2016
In the Court of Common Pleas of Chester County
Civil Division at No(s): 2012-02209-CT
ARUN KRISHNAN AND ARUNA ARUN IN THE SUPERIOR COURT OF
NARAYANAN, PENNSYLVANIA
Appellees
v.
J-A14013-17
J-A14014-17
J-A14015-17
THE CUTLER GROUP, INC.,
Appellant No. 2613 EDA 2016
Appeal from the Judgment Entered August 24, 2016
In the Court of Common Pleas of Chester County
Civil Division at No(s): 2012-02209-CT
ARUN KRISHNAN AND ARUNA IN THE SUPERIOR COURT OF
NARAYANAN, PENNSYLVANIA
Appellees
v.
THE CUTLER GROUP, INC., D/B/A THE
DAVID CUTLER GROUP,
Appellant No. 2828 EDA 2016
Appeal from the Judgment Entered August 24, 2016
In the Court of Common Pleas of Chester County
Civil Division at No(s): 2012-02209-CT
BEFORE: BENDER, P.J.E., BOWES, J., and SHOGAN, J.
OPINION BY BENDER, P.J.E.: FILED OCTOBER 02, 2017
Appellant, The Cutler Group, Inc. (referred to herein as “Cutler”),
appeals and Appellees, Arun Krishnan and Aruna Arun Narayanan, cross-
appeal from the August 24, 2016 judgment entered in favor of Appellees.1
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1
Pursuant to Pa.R.A.P. 513, we sua sponte consolidate the parties’ pending
appeals and cross appeal. See Pa.R.A.P. 513 (providing that where there is
more than one appeal from the same order, the appellate court may, in its
discretion, order them to be consolidated). As discussed further, infra,
Cutler filed separate appeals from: (1) the trial court’s July 12, 2016 order
(Footnote Continued Next Page)
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After careful review, we affirm in part, vacate the judgment entered with
respect to attorneys’ fees, and remand.
_______________________
(Footnote Continued)
regarding Appellees’ motions for post-trial relief and the judgment entered
on August 10, 2016 (referred to herein as “First Appeal” and docketed at
2614 EDA 2016); (2) the trial court’s July 12, 2016 order denying Cutler’s
motion for post-trial relief and the judgment entered on August 10, 2016
(referred to herein as “Second Appeal” and docketed at 2613 EDA 2016);
and (3) the trial court’s July 12, 2016 order regarding Appellees’ motion for
post-trial relief, the judgment entered on August 10, 2016, and the trial
court’s August 16, 2016 order granting, in part, Appellees’ supplemental
request for attorneys’ fees and costs (referred to herein as “Third Appeal”
and docketed at 2828 EDA 2016). In addition, Appellees filed a cross-appeal
from the trial court’s July 12, 2016 order regarding Appellees’ post-trial
motions and the trial court’s August 16, 2016 order denying, in part,
Appellees’ request for additional attorneys’ fees and costs (referred to herein
as “Cross-appeal” and docketed at 2745 EDA 2016).
We note that an order denying post-trial motions is interlocutory and
generally not appealable. See Levitt v. Patrick, 976 A.2d 581, 584 n.2
(Pa. Super. 2009) (stating that appeal properly lies from the entry of
judgment, not from the order denying post-trial motions). Here, Cutler filed
a praecipe to enter judgment on August 10, 2016; however, at that point,
the trial court had not fully disposed of Appellees’ post-trial motion, as
Appellees’ request for supplemental attorneys’ fees remained outstanding.
Thus, we consider the August 10, 2016 judgment as being premature. The
trial court subsequently awarded Appellees supplemental attorneys’ fees on
August 16, 2016, and final judgment was entered on August 24, 2016, in
the total amount of $317,668.78. Therefore, we consider these appeals as
taken from the August 24, 2016 entry of final judgment, and we deem
Cutler’s appeals before that judgment as proper. See Keystone Dedicated
Logistics, LLC v. JGB Enterprises, Inc., 77 A.3d 1, 2 n.1 (Pa. Super.
2013) (“[E]ven though [an] appeal was filed prior to the entry of judgment,
it is clear that jurisdiction in appellate courts may be perfected after an
appeal notice has been filed upon the docketing of a final judgment.”)
(quoting Johnston the Florist, Inc. v. TEDCO Const. Corp., 657 A.2d
511, 513 (Pa. Super. 1995)).
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In the decision it issued following the jury and non-jury trials in this
matter, the trial court set forth the procedural history of this case as follows:
This matter arises from [Appellees’] purchase of a home built by
… Cutler in a development located in East Whiteland Township,
Pennsylvania[,] known as Malvern Hunt. [Appellees] allege that
… Cutler improperly constructed their home which resulted in
chronic water infiltration and damage to the home. After
learning of its construction failures, [Appellees] allege that Cutler
proceeded to engage in a series of unlawful conduct in order to
hide the home’s significant water problems and avoid its promise
and obligation to repair their home. In their complaint,
[Appellees] asserted claims for breach of contract, breach of
express warranty, breach of implied warranty of habitability,
breach of implied warranty of reasonable workmanship, and
violations of the Pennsylvania Unfair Trade Practice and
Consumer Protection Law (“UTPCPL”).
There being no right to a jury trial under the UTPCPL, the court
scheduled the jury trial on [Appellees’] common law claims to
begin on December 7, 2015. The non-jury trial on [Appellees’]
UTPCPL claims was scheduled to commence at the conclusion of
the jury trial. On December 9, 2015, after three trial days, the
jury returned a verdict in favor of [Appellees] and against
[Cutler] on all of [Appellees’] common law claims.
On January 11 and 15, 2016, the court held a bench trial on
[Appellees’] UTPCPL claims. Having already heard evidence
related to the common law claims, during the bench trial the
court simply took additional evidence specifically related to
[Appellees’] UTPCPL claims, the damages available thereunder[,]
and [Appellees’] request for attorneys’ fees and costs. At the
conclusion of the bench trial, the court requested that the parties
provide proposed findings of fact and conclusions of law as well
as written closing arguments. The parties filed the required
submissions with the court.
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Trial Court Decision (TCD), dated 2/11/2016, at 1-2.2
Ultimately, in light of the evidence set forth during the jury and non-
jury trials relating to the UTPCPL claims — along with the parties’ post-trial
submissions — the trial court found in favor of Appellees on their UTPCPL
claims and awarded damages, costs, and attorneys’ fees in the total amount
of $232,475.72 plus interest.3 In doing so, the trial court made the
following factual findings:
1. On August 24, 2002, [Appellees] entered into an
Agreement of Sale to purchase a residential home located at
31 Cameron Court, Exton, Pennsylvania (hereinafter the
“Home”) in the Ridings of Malvern Hunt, a residential
development located in East Whiteland Township,
Pennsylvania (hereinafter “Malvern Hunt”).
2. [Cutler] is the developer of Malvern Hunt and, through its
agents, constructed [Appellees’] Home.
3. On October 1, 2002, [Appellees] proceeded with settlement
and took possession of the Home.
4. In connection with the sale, [Appellees] received a written
warranty from Cutler which provided, among other things,
that (a) Cutler built the Home in accordance with the
accepted home building practices of the locality, and (b) prior
to delivery, Cutler’s trained personnel had inspected the
Home (the “Warranty”).
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2
Although this decision was dated February 11, 2016, it was not entered on
the docket until March 2, 2016.
3
Specifically, at the time of the trial court’s February 11, 2016 decision, the
jury’s verdict amounted to $85,980.94, and Appellees received attorneys’
fees and costs through January 1, 2016 in the amount of $121,938.51 and
$24,556.27, respectively. See Trial Court Order Awarding and Conforming
Damages From Bench Trial With Jury’s Verdict, dated 2/11/2016, at 1
(single, unnumbered page).
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5. On October 1, 2002, [Appellees] executed the Warranty.
6. Cutler’s former employee, project supervisor, and Quality
Control manager, Justin McCarty (“Mr. McCarty”), supervised
the construction of the Malvern Hunt development, including
[Appellees’] home.
7. Although he was the lead construction supervisor on site
during the construction of Cutler’s stucco-clad homes (of
which [Appellees’] home was one), Mr. McCarty had little
knowledge in 2002 of the proper application of stucco.
8. Mr. McCarty testified that he did not know what constituted
correct versus incorrect stucco practice.
9. Neither Mr. McCarty nor anyone else at Cutler performed
inspections of the Home to ensure that windows, flashing
components or stucco were installed correctly.
10. Yet, prior to 2002, Cutler had received complaints from
homeowners in at least one other Cutler-built stucco
community, Springton Woods, about water infiltration
resulting from, among other things, improper flashing,
improper window installation, improper thickness of stucco,
and other construction defects.
11. William Wheatley (“Mr. Wheatley”), an architect retained
by the homeowners of Springton Woods, testified that as a
result of those complaints window and destructive testing
took place in Springton Woods, which he attended and
observed in 2000 with Cutler’s President and CEO, David
Cutler (“Mr. Cutler”), and other professionals.
12. Mr. Wheatley testified that after that inspection, he
discussed with Mr. Cutler missing flashing components,
excessive staple patterns, improper installation of windows,
and non-code compliant stucco.
13. Mr. Wheatley testified that he advised Mr. Cutler that
these construction issues were contributing to water
infiltration in Springton Woods and suggested that Cutler
address these issues.
14. In April 2005, [Appellees] complained to Cutler’s service
department of water infiltration in their Home. [Appellees]
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first observed water infiltration in the downstairs powder
room.
15. In May 2005, Cutler sent agents to the Home to perform
repairs consisting of spackling, painting and caulking the
damaged areas in the powder room. Cutler also caulked
around a window in the upstairs bathroom and applied spray
foam insulation behind the window trim beneath the sill.
16. Following the May 2005 work, Cutler’s agents advised
[Appellee Narayanan] that the water infiltration issue had
been addressed and that no further action was necessary.
17. In September 2006, [Appellees] discovered additional
water infiltration in the same downstairs powder room as well
as in a new location – the downstairs study.
18. In response, Cutler sent agents to the Home on two
occasions – once in September 2006 and once in October
2006 – to perform repairs consisting of, among other things,
drywall repair and cutting and sealing in the windows above
the study.
19. This type of repair already had proven to be ineffective in
solving the problem.
20. Despite knowing from the first “repair” that caulking
would not solve the problem or address the source of the
water infiltration, following the September and October 2006
service, Cutler’s agents again advised [Appellee Narayanan]
that the water infiltration issue had been addressed and that
no further action was necessary.
21. Cutler failed to perform any testing or inquire further into
the source, cause, or extent of the water infiltration in
[Appellees’] Home.
22. In February 2010, [Appellees] discovered yet more water
infiltration in the downstairs powder room where Cutler’s
agents had performed repairs in 2005 and 2006.
23. Cutler initially denied [Appellees’] claims out-of-hand,
indicating that the Home was out of warranty.
24. In or around April 2010, [Appellees] began looking
themselves for answers. They engaged Craig D. Tillman (“Mr.
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Tillman”) to conduct an inspection of the Home. Mr. Tillman
thereafter prepared an inspection report.
25. Mr. Tillman’s report identified certain defective
construction conditions and practices at the Home.
26. [Appellees] provided Cutler with a copy of the report.
27. In June 2010, after receiving a copy of Mr. Tillman’s
inspection report, Cutler sent Mr. McCarty, now employed by
McCarty Home Services, LLC (“McCarty Home Services”), to
inspect the Home.
28. During his inspection, Mr. McCarty commented to
[Appellee] Krishnan, who was present, that the walls of
[Appellees’] Home were “like butter.”
29. Mr. McCarty too prepared a written report in connection
with his inspection. He recommended that certain essential
repairs be made to [Appellees’] Home.
30. [Appellees] requested a copy of Mr. McCarty’s report, but
Cutler refused to provide a copy to [Appellees] at that time.
31. In July 2010, Cutler twice promised [Appellees], in
writing, that Cutler would repair the Home.
32. Cutler represented that it had added [Appellees’] Home to
a rip-and-tear program, and that Cutler had issued a work
order to McCarty Home Services to perform the repairs.
33. With the July 29, 2010 letter, Cutler enclosed a
confidentiality agreement, demanding that [Appellees] agree
not to discuss, among other things, the construction, repair,
or conveyance of the Home by Cutler with anyone except
family members or [Appellees’] attorney(s) and
accountant(s).
34. [Appellees] signed and returned the confidentiality
agreement included with Cutler’s July 29, 2010 letter.
35. Cutler did not follow through with scheduling the repair
work, prompting [Appellee] Krishnan to contact Mr. McCarty
in September 2010.
36. Mr. McCarty indicated to [Appellee] Krishnan that Cutler
had not issued a work order to McCarty Home Services.
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37. [Appellees] again followed up with Cutler.
38. Thereafter, [Appellees] received a letter from Cutler,
dated October 4, 2010, indicating that Cutler had “developed
new methods for successful repair” of the water infiltration
“problem” in [Appellees’] Home.
39. In the October 4, 2010 letter, Cutler demanded, for the
first time, that [Appellees] provide evidence that they had
“sealed” their Home within a year of purchase. Further,
Cutler reported to have not received the first confidentiality
agreement sent to [Appellees] on July 29, 2010.
40. Cutler enclosed another, this time different, confidentiality
agreement removing the carve-out permitting [Appellees] to
speak with family members or an attorney about the repairs.
41. Cutler never did issue a work order to McCarty Home
Services to perform the repairs outlined in the July 29, 2010
letter.
42. In January and March 2011, Cutler engaged Tom Adams
Windows and Carpets, Inc. (hereinafter “Adams”), to perform
repairs to [Appellees’] Home.
43. [Appellees] believed that Cutler was sending Adams to
their Home to perform the “new methods for the successful
repair of the problems” with their Home as described in
Cutler’s October 4, 2010 letter to [Appellees].
44. Instead, Adams’s repairs at [Appellees’] Home in March
2011 for a third time consisted of the same unsuccessful
“remedy” employed by Cutler — cleaning, caulking, and
sealing around windows.
45. Cutler was billed $375 for the work.
46. Cutler employee, Christopher Heuges, referred to these
Adams repairs as the “typical service” in a January 31, 2011
email to Tom Adams’s employee, Mindy Friedmann.
47. Adams’s service manager, Bob Hertlein, indicated that
additional tests were necessary and available to diagnose the
cause of continuing water infiltration if Adams’s service work
was unsuccessful[,] including removing and inspecting the
windows for signs of improper installation or flashing.
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48. Cutler knew the same service had been unsuccessful in
dealing with [Appellees’] Home, but it failed to perform the
additional test identified by Mr. Hertlein or otherwise perform
repairs following Adams’s service.
49. Having received the “caulk and seal” service now more
than once, [Appellees] retained the services of a certified
master inspector, John Lukowski, to determine the cause of
their systemic water infiltration.
50. In August and October 2011, Mr. Lukowski performed a
visual inspection and subsequently observed destructive
testing at the Home.
51. Destructive testing revealed numerous construction
defects and evidence of significant water infiltration on all
elevations of the Home.
52. Mr. Lukowski recommended that [Appellees] remove all
stucco, repair damaged substrate materials, replace
nonconforming house wrap materials, and re-apply stucco at
the proper thickness with required flashing and drainage
components.
53. [Appellees] engaged Narvon Exteriors, LLC to do the work
for the base price of $82,000. Remediation of [Appellees’]
Home began in April 2012.
54. During the stucco removal, Mr. Lukowski documented
dozens of violations of standard construction industry practice
and the building code applicable to the construction of
[Appellees’] Home, including improper window lapping,
excessive stapling, missing flashing, improper window
installation, broken window flanges, improper roofline
flashing, use of inferior and non-compliant building materials,
and use of an underweight and improper weather resistive
barrier.
55. Cutler’s two coat stucco application was determined to be
between ¼ and ½ inch thick throughout the Home.
56. Mr. Lukowski documented substantial damage to OSB,
framing elements, insulation, and other components of the
Home. He observed massive holes, rotten insulation, OSB
that resembled “mulch,” toxic molds of varying species, and
mushrooms growing in interior wall spaces.
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57. Cutler denied liability, asserting initially that “homeowner
maintenance” was to blame for the systemic water infiltration.
58. Cutler failed to cooperate during the discovery phase of
this litigation. Between the months of February 2014 through
October 2014, the [c]ourt entered five discovery orders
related to Cutler’s incomplete document production, often
involving water infiltration claims in other Cutler-built homes.
[Appellees were] required to respond to multiple motions for
reconsideration and motions to quash filed by Cutler relative
to these same discovery matters.
59. On October 14, 2014, the court granted [Appellees’]
Motion for Sanctions and awarded [Appellees] monetary
sanctions and a conditional adverse inference charge
regarding more than a dozen homes for which Cutler provided
no information (the “October 14, 201[4] Order”).
60. By October 14, 2014 Order, the court had already
scheduled and rescheduled trial in this matter more than
once. Thereafter, the court established a firm trial date of
October 27, 2014.
61. On October 22, 2014, less than three business days
before trial, Cutler appealed the court’s October 14, 2014
Order to the Pennsylvania Superior Court. Cutler filed a
motion with this court requesting an order permitting it to
appeal the sanctions order as of right and it filed a petition
with the Superior Court under a separate docket for allowance
of appeal by permission.
62. [Appellees] had incurred significant fees and costs
preparing for trial in October 2014.
63. [Appellees] then incurred additional legal expenses during
the months of October 2014 through January 2015 defending
against Cutler’s appeals, which the Superior Court
questioned, sua sponte, and ultimately quashed in January
2015.
64. On December 7, 2015, [Appellees] proceeded to trial on
their claims for breach of contract and breach of express and
implied warranties.
65. On the afternoon of December 9, 2015, the court charged
the [j]ury.
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66. The jury returned a verdict that day in favor of
[Appellees] on all counts in the amount of $85,980.94, which
represented the cost incurred by [Appellees] to investigate
and remediate the Home.
67. The non-jury phase of the trial was to immediately follow
at the conclusion of the jury phase.
68. On December 10, 2015, Cutler submitted to the court four
“Pre-Trial Memoranda” raising numerous evidentiary and
dispositive issues. The [c]ourt continued the bench trial to
permit [Appellees] time to respond to the filings.
69. Cutler subsequently filed an omnibus Motion in Limine
and for Summary Judgment seeking to dismiss [Appellees’]
UTPCPL claim or limit evidence supporting the same.
[Appellees] responded thereto.
70. The court denied both motions by Order dated January 6,
2016.
71. On January 11 and 15, 2016, the court heard evidence on
[Appellees’] UTPCPL claim.
TCD at 2-11 (internal citations and original brackets omitted).
Following the bench trial, the trial court found in favor of Appellees on
their UTPCPL claim. Thereafter, Cutler filed a motion for post-trial relief on
March 11, 2016. On March 21, 2016, Appellees also filed a post-trial
motion. The trial court ruled on both parties’ motions on July 12, 2016.
First, with respect to Appellees’ post-trial motion, the trial court entered an
order in which it granted Appellees’ request for prejudgment interest in the
amount of $69,329.20; denied their request for an award of the full extent
of the attorneys’ fees incurred in this case; granted in part Appellees’
request for an award of attorneys’ fees and costs incurred in responding to
Cutler’s post-trial motions; directed Appellees to submit for the court’s
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consideration a statement setting forth the attorneys’ fees and costs
incurred since January 1, 2016; and, finally, denied Appellees’ request that
the court treble the jury’s award pursuant to the UTPCPL. See Trial Court
Order Regarding Appellees’ Post-Trial Motion, 7/12/2016, at 1-2
(unnumbered pages). Second, the trial court entered a separate order
denying Cutler’s post-trial motion that “contain[ed] seventy-nine …
paragraphs … purport[ing] to identify the multitude of errors that occurred
during the jury and non-jury phases of this litigation.” See Trial Court Order
Denying Cutler’s Post-Trial Motion, 7/12/2016, at 1 n.1 (unnumbered
pages).4
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4
Cutler similarly lacks brevity on appeal. This Court has pointed out that,
it has been held that when an appellant raises an extraordinary
number of issues on appeal … a presumption arises that there is
no merit to them. In United States v. Hart, 693 F.2d 286, 287
n.1 (3[d] Cir. 1982), the court had an opportunity to address
this situation:
Because of the inordinate number of meritless objections
pressed on appeal, spotting the one bona fide issue was
like finding a needle in a haystack. One of our colleagues
has recently cautioned on the danger of “loquaciousness:”
With a decade and a half of federal appellate court
experience behind me, I can say that even when we
reverse a trial court it is rare that a brief successfully
demonstrates that the trial court committed more
than one or two reversible errors. I have said in
open court that when I read an appellant’s brief that
contains ten or twelve points, a presumption arises
that there is no merit to any of them. I do not say
that this is an irrebuttable presumption, but it is a
(Footnote Continued Next Page)
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Subsequently, in conformance with the trial court’s July 12, 2016 order
directing Appellees to file a statement setting forth the attorneys’ fees and
costs incurred since January 1, 2016, Appellees filed a supplemental request
for additional attorneys’ fees and costs in the amount of $69,551.36 on July
26, 2016. See Appellees’ Supplemental Request for Attorneys’ Fees and
Costs Pursuant to July 12, 2016 Court Order, 7/26/2016, at 1-2
(unnumbered pages). While that request was pending, Cutler filed a
praecipe to enter judgment in the amount of $301,804.92 on August 10,
2016.5 The next day, on August 11, 2016, Cutler filed two notices of appeal:
first, a notice of appeal from the trial court’s July 12, 2016 order regarding
Appellees’ motion for post-trial relief and the judgment entered on August
10, 2016; and, second, a notice of appeal from the trial court’s July 12, 2016
_______________________
(Footnote Continued)
presumption nevertheless that reduces the
effectiveness of appellate advocacy. Appellate
advocacy is measured by effectiveness, not
loquaciousness.
Aldisert, The Appellate Bar: Professional Competence and
Professional Responsibility—A View From the Jaundiced Eye of
One Appellate Judge, 11 Cap.U.L.Rev. 445, 458 (1982).
Estate of Lakatosh, 656 A.2d 1378, 1380 n.1 (Pa. Super. 1995).
5
Cutler explained that the amount of $301,804.92 resulted from the trial
court’s February 11, 2016 order awarding $232,475.22, and its July 12,
2016 order granting Appellees’ prejudgment interest in the amount of
$69,329.20.
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order denying Cutler’s motion for post-trial relief and the judgment entered
on August 10, 2016.
On August 16, 2016, the trial court entered an order granting in part
Appellees’ Supplemental Request for Attorneys’ Fees and Costs Pursuant to
its July 12, 2016 order.6,7 On August 24, 2016, Appellees filed a praecipe to
enter final judgment in the amount of $317,668.78, to reflect these
additional amounts. Judgment was entered that day. Then, on August 25,
2016, Appellees filed a notice of cross-appeal, challenging the trial court’s
July 12, 2016 order regarding their post-trial motion and its August 16, 2016
order regarding their supplemental request for attorneys’ fees and costs.
Further, on August 26, 2016, Cutler filed an amended notice of appeal, in
which it challenged the trial court’s August 16, 2016 order regarding
Appellees’ request for supplemental attorneys’ fees.
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6
Specifically, the trial court additionally awarded attorneys’ fees to
Appellees in the amount of $13,254.00, and costs in the amount of
$2,609.86.
7
We note that under Pennsylvania Rule of Appellate Procedure 1701(b)(6),
“[a]fter an appeal is taken …, the trial court … may … [p]roceed further in
any matter in which a non-appealable interlocutory order has been entered,
notwithstanding the filing of a notice of appeal or a petition for review of the
order.” Pa.R.A.P. 1701(b)(6).
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The trial court instructed the parties to file a Pa.R.A.P. 1925(b) concise
statements of errors complained of on appeal, and they timely complied. On
appeal, Cutler presents the following nineteen issues for our review:8
A. Did the trial court commit an error of law and abuse its
discretion in awarding [Appellees] attorneys[’] fees, and/or
in not discounting the attorney[s’] fees, costs and expert
fees when case law requires the fees to be discounted?
B. Did the trial court commit an error of law and abuse its
discretion in awarding [Appellees] expert fees when the
law in Pennsylvania does not allow a party to recover
expert fees?
C. Did the trial court commit an error of law and abuse its
discretion in awarding [Appellees] pre-judgment interest
when under Pennsylvania law they were not entitled to
pre-judgment interest?
D. Did the trial court commit an error of law and abuse its
discretion in awarding [Appellees] attorney[s’] fees
pursuant to their UTPCPL claim in additional amounts for
the time period between January 1, 2016 to August 16,
2016 and/or in not discounting the attorney[s’] fees when
case law requires the fees to be discounted and when
under Pennsylvania law they are not entitled to the
additional fees?
E. Did the trial court commit an error of law and abuse its
discretion in awarding [Appellees] costs pursuant to their
UTPCPL claim in additional amounts incurred for the
litigation costs in prosecuting their claim and/or in not
discounting the costs when case law requires the costs to
be discounted and when under Pennsylvania law they are
not entitled to the additional costs?
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8
We compiled the issues presented by Cutler in each of its three briefs, but
do not repeat issues it raised in multiple briefs in the list above.
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F. Did the trial court commit an error of law and abuse its
discretion by allowing the jury to consider a claim under
the breach of the express warranty as the evidence did not
support such a claim?
G. Did the trial court commit an error of law and abuse its
discretion by finding that [Cutler] breached an express
warranty when the jury’s verdict under the claims of
breach of express warranty was against the weight of the
evidence presented at trial?
H. Did the trial court commit an error of law and abuse its
discretion in finding that [Cutler] breached an implied
warranty of habitability and reasonable workmanship
because the jury’s findings under the claims of breach of
the implied warranty of habitability and reasonable
workmanship were against the weight of the evidence?
I. Did the trial court commit an error of law and abuse its
discretion by allowing the jury to consider a claim under
the breach of implied warranty of habitability and implied
warranty of reasonable workmanship as the evidence did
not support such a claim?
J. Did the trial court commit an error of law and abuse its
discretion in finding that [Cutler] violated the [UTPCPL] by
breaching an express warranty?
K. Did the trial court commit an error of law and abuse its
discretion in refusing to dismiss [Appellees’] claims under
the [UTPCPL] when the claim was barred by the statute of
limitations?
L. Did the trial court commit an error of law and abuse its
discretion in finding that [Cutler] violated the [UTPCPL]
when [Appellees] should not have been permitted to show
reliance outside of the agreement of sale under the parol
evidence rule?
M. Did the trial court commit an error of law and abuse its
discretion in finding that [Cutler] violated the [UTPCPL]
when [Appellees] did not prove justifiable reliance?
N. Did the trial court commit an error of law and abuse its
discretion in finding that [Appellees] met their burden of
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proof under the [UTPCPL] when they did not prove fraud
by clear and convincing evidence?
O. Did the trial court commit an error of law and abuse its
discretion by finding that [Appellees] were not required to
establish the common law elements of fraud in order to
support their claims under the [UTPCPL]?
P. Did the trial court commit an error of law and abuse its
discretion in finding that [Cutler] had engaged in a practice
of deceptive conduct in violation of the [UTPCPL] when the
weight of the evidence did not support such a finding?
Q. Did the trial court commit an error of law and abuse its
discretion in not granting a mistrial when [Appellees]
submitted new evidence, ex parte, after the conclusion of
the trial?
R. Did the trial court commit an error of law and abuse its
discretion in allowing evidence of water damage in other
homes when the evidence was not probative and it was
highly prejudicial?
S. Did the trial court commit an error of law and abuse its
discretion in allowing William A. Wheatley to provide
expert testimony when he was called as a fact witness and
never qualified as an expert?
Cutler’s Brief (First Appeal) at 4-5; Cutler’s Brief (Second Appeal) at 4-7
(unnecessary capitalization and emphasis omitted).9
First, Cutler argues that “the trial court erred in awarding … Appellees
attorneys[’] fees and not discounting the fees awarded[.]” Cutler’s Brief
(First Appeal) at 14 (unnecessary capitalization and emphasis omitted). In
particular, it argues that the trial court erred in awarding Appellees
attorneys’ fees in the amount of $121,938.51, and “in failing to discount the
____________________________________________
9
We address Appellees’ cross-appeal, infra.
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fees to only the amount of time spent on the UTPCPL claim.” Id. Cutler
points out that Appellees “brought claims for breach of contract, breach of
express warranty, breach of implied warranties, and violations of the
[UTPCPL,]” and insists that “Appellees simply cannot recover all of their
attorney[s’] fees in this case, as it is clear that only time spent on the
UTPCPL is recoverable.” Id. at 15, 17. Further, Cutler challenges the
testimony of Appellees’ counsel that “there was no way for him to partition
out the claims.” Id. at 16 (citation omitted). Appellees, on the other hand,
declare that “all of [their] claims arise out of the same common core of
facts. In fact, [their] common law claims form the very basis of their
UTPCPL claim.” Appellees’ Brief (First Appeal) at 32 (citations and quotation
marks omitted).
We examine such claims for an abuse of discretion. See Boehm v.
Riversource Life Ins. Co., 117 A.3d 308, 335 (Pa. Super. 2015). By way
of background,
[t]he general purpose of the UTPCPL is to protect the public from
fraud and unfair or deceptive business practices. The UTPCPL,
by virtue of the following language, authorizes the trial judge to
grant a successful litigant an award for additional damages,
reasonable attorney fees, and costs:
Any person who purchases or leases goods or services
primarily for personal, family or household purposes and
thereby suffers any ascertainable loss of money or
property, real or personal, as a result of the use or
employment by any person of a method, act or practice
declared unlawful by section 3 of this act, may bring a
private action to recover actual damages or one hundred
dollars ($100), whichever is greater. The court may, in its
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discretion, award up to three times the actual damages
sustained, but not less than one hundred dollars ($100),
and may provide such additional relief as it deems
necessary or proper. The court may award to the
plaintiff, in addition to other relief provided in this
section, costs and reasonable attorney fees.
73 P.S. § 201-9.2(a).
Neal v. Bavarian Motors, Inc., 882 A.2d 1022, 1029-30 (Pa. Super. 2005)
(emphasis added; some citations omitted).
We have stated that “a court in awarding attorney[s’] fees under the
UTPCPL must … eliminate from the award of attorney[s’] fees the efforts of
counsel to recover on non-UTPCPL theories.” Id. at 1031-32. Simply put,
“there is no statutory authority for awarding attorney[s’] fees for the time
spent pursuing non-UTPCPL counts.” Id. at 1032 (original brackets, internal
quotation marks, and citations omitted). Notwithstanding, this Court has
also recognized the difficulty in differentiating the time spent pursuing
UTPCPL claims from non-UTPCPL claims. For instance, we have noted that
“where the plaintiffs are proceeding on multiple theories of relief, including
under the UTPCPL, it is difficult to parse out the time between the UTPCPL
claim and other causes of action.” Boehm, 117 A.3d at 335. In such
scenarios, “[m]uch of the time spent in pre-trial litigation would relate to
both UTPCPL and common law causes of action.” Id.
Here, Cutler contends that while Appellees’ counsel “would have the
[c]ourt believe all of these fees are intertwined[,] it defies logic that every
minute spent and every email sent went towards the UTPCPL claims and that
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the fees could not be reasonably reduced.” Cutler’s Brief (First Appeal) at
16. In contrast, the trial court acknowledged that Appellees “litigated
multiple theories of relief based upon similar yet complicated facts all at
once.” TCD at 26. It further explained:
[T]he parties proceeded with the jury trial on the common law
claims before proceeding to a bench trial on the UTPCPL claim.
… In arguing that the fees should have been separately billed,
[Cutler] during cross-examination of [Appellees’] counsel pointed
out as an example that at the outset of this litigation[,] [Cutler]
filed preliminary objections to the complaint’s non-UTPCPL
claims, including an objection based upon the “gist of the action”
doctrine. Having reviewed those objections again, the court is
reminded that the objections also challenged [Appellees’]
UTPCPL claims. Rather than undermining [Appellees’] position,
this example actually supports [Appellees’] assertion that a
separation of fees would be difficult in this case.
TCD at 27. Thus, the trial court reasonably concluded that the time spent by
counsel in litigating this case often encompassed both Appellees’ UTPCPL
and common law causes of action, and would be difficult to divide given the
common underlying facts. Consequently, we discern no abuse of discretion
by the trial court in not discounting the fee awards.
Second, Cutler claims that “the trial court erred in awarding …
[Appellees] expert fees.” Cutler’s Brief (First Brief) at 17 (unnecessary
emphasis and capitalization omitted). Cutler advances a two-fold argument
in support: first, it claims that “[t]here is no automatic right to expert fees
under the UTPCPL”; second, it states that “Appellees’ expert, John
Lukowski[,] only testified at the trial for breach of contract and breach of
warranties.” Id.
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With respect to the first prong of Cutler’s argument, we reiterate that
the UTPCPL provides that “[t]he court may award to the plaintiff … costs and
reasonable attorney fees” as well as “such additional relief as it deems
necessary or proper.” 73 P.S. § 201-9.2 (emphasis added). Here, the trial
court explained its decision to award expert fees, stating:
Similar to attorneys’ fees, the right to recover expert fees as
costs under the UTPCPL, although not required, does exist if
those fees are reasonable and connected to the UTPCPL claims.
See Skurnowicz v. Lucci, 798 A.2d 788 (Pa. Super. 2002)
(considering [the] plaintiffs’ request for expert fees, although
denying after determination that expert’s plan failed to lead to a
solution and thus fees deemed unreasonable); Neal, 882 A.2d at
102[9] (finding that because there was no dispute retention of
an expert who prepared a pretrial report and testified at trial was
necessary, trial judge did not abuse discretion in awarding
partial reimbursement for cost of expert[])[.] The court heard
[Appellees’] evidence on the costs incurred in this litigation and
the expert fees they incurred and the reason and purpose
thereof. It concludes that the expert services rendered to
[Appellees] ultimately assisted [them] in proving liability on the
part of [Cutler]. The court concludes those expert fees were
reasonable and appropriate and should be awarded. As the
court in McCauslin v. Reliance Fin. Co., 751 A.2d 683 (Pa.
Super. 2005), recognized with regard to attorneys’ fees, “it is far
more in keeping with the intent of the legislation that the
claimant be made whole and not have to diminish his recovery
by paying attorney[s’] fees.” The court believes the same logic
applies when considering an award of costs, including expert
fees.
TCD at 30-31 (some citations omitted). Thus, while there is no automatic
right to expert fees, the trial court reasonably exercised its discretion to
award them to Appellees.
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With respect to the second aspect of Cutler’s argument, Appellees
emphasize that they “relied on Mr. Lukowski’s testimony in support of their
UTPCPL claim.” Appellees’ Brief (First Appeal) at 40 (citation omitted). They
discuss that “[a]t the beginning of the Bench Trial [on Appellees’ UTPCPL
claim], [Appellees’] counsel stated on the record his intention to incorporate
and rely upon the testimony and evidence presented during the Jury Trial
(including Mr. Lukowski’s testimony) in support of [Appellees’] UTPCPL
claim.” Id. at 39-40 (citation omitted).
Indeed, our review of the record reveals the following exchange
between Appellees’ counsel and the trial court:
[Appellees’ Attorney:] [] As you know, your Honor, this is a
bench trial, which is a continuation of the jury trial in this
matter.
As previously indicated to the [c]ourt and opposing
counsel, it is my intention to introduce -- supplement the
record and rely upon specifically and incorporate the
testimony and evidence that was provided at the jury trial
in this matter. And I understand that the [c]ourt is in
agreement with this procedure.
[Trial Court:] Yes. I certainly don’t need to hear the same
evidence a second time. It doesn’t make sense. I was here all
throughout the jury trial, and the jury has spoken as to the
evidence, which you heard.
You may need to remind me of one point or another. But,
no. I think you’re correct on how I view it.
[Appellees’ Attorney:] Thank you, your Honor.
It would be my intention, to the extent I bring up prior
testimony, it will be brief and for the purpose of just refreshing
your Honor’s recollection of the testimony.
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N.T. Trial, 1/11/2016, at 3 (emphasis added). Thus, Appellees did rely on
Mr. Lukowski’s testimony to advance their UTPCPL claim. Accordingly, we
are unpersuaded by Cutler’s arguments, and believe the trial court
appropriately awarded expert fees to Appellees.
Third, Cutler claims that the trial court erred in awarding Appellees
prejudgment interest under the Restatement (Second) of Contracts § 354.
See Cutler’s Brief (First Appeal) at 19.10 To begin, Cutler asserts that
“parties are only entitled to prejudgment interest as a matter of law where
damages are liquidated[,]” and thereby contends that the trial court
incorrectly determined that “the damages were liquidated because the value
of remediation services could be ascertained by market value[,]” which
“circumvents the clear definition of liquidated damages.” Id. (citation and
unnecessary emphasis and capitalization omitted). In addition, Cutler avers
that the trial court also could not have properly exercised its discretion to
award prejudgment interest to Appellees because they “were never out of
pocket any monies due to the alleged breach of [Cutler].” Id. at 28. In our
view, both of these arguments are meritless.
“[A] court has discretion to award or not award prejudgment interest
on some claims, but must or must not award prejudgment interest on
____________________________________________
10
As mentioned above, the trial court awarded Appellees $69,329.20 in
prejudgment interest. Cutler does not challenge the amount of prejudgment
interest, but rather the fact that it was awarded at all.
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others.” Cresci Const. Services, Inc. v. Martin, 64 A.3d 254, 258 (Pa.
Super. 2013) (quoting, in part, Fidelity Bank v. Com. Marine and Gen.
Assurance Co., 592 F. Supp. 513, 522 (E.D. Pa. 1984)) (internal quotations
and original brackets omitted). In accordance, Pennsylvania has followed
the Restatement (Second) of Contracts § 354, which provides:
(1) If the breach consists of a failure to pay a definite sum in
money or to render a performance with fixed or ascertainable
monetary value, interest is recoverable from the time for
performance on the amount due less all deductions to which the
party in breach is entitled.
(2) In any other case, such interest may be allowed as justice
requires on the amount that would have been just compensation
had it been paid when performance was due.
Restatement (Second) of Contracts § 354. Further, the comments to this
section state, in pertinent part:
c. Where amount due is sufficiently definite. Under the rule
stated in Subsection (1), a party is not chargeable with interest
on a sum unless its amount is fixed by the contract or he could
have determined its amount with reasonable certainty so that he
could have made a proper tender. Unless otherwise agreed,
interest is always recoverable for the non-payment of money
once payment has become due and there has been a breach.
This rule applies to debts due for money lent, goods sold or
services performed, including installments due on a construction
contract. The fact that the breach has spared some expense
that is uncertain in amount does not prevent the recovery of
interest. The sum due is sufficiently definite if it is ascertainable
from the terms of the contract, as where the contract fixes a
price per unit of performance, even though the number of units
performed must be proved and is subject to dispute. The same
is true, even if the contract does not of itself create a money
debt, if it fixes a money equivalent of the performance. It is
also true, even if the contract does not fix a money
equivalent of the performance, if such an equivalent can
be determined from established market prices. The fact
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that the extent of the performance rendered and the
existence of the market price must be proved by evidence
extrinsic to the contract does not prevent the application
of these rules.
…
d. Discretionary in other cases. Damages for breach of contract
include not only the value of the promised performance but also
compensation for consequential loss. The amount to be awarded
for such loss is often very difficult to estimate in advance of trial
and cannot be determined by the party in breach with sufficient
certainty to enable him to make a proper tender. In such
cases, the award of interest is left to judicial discretion,
under the rule stated in Subsection (2), in the light of all
the circumstances, including any deficiencies in the
performance of the injured party and any
unreasonableness in the demands made by him.
Restatement (Second) of Contracts § 354 cmts. c, d (emphasis added).
This Court has expounded on Section 354 as follows:
[Section] 354 commands that prejudgment interest is awarded
as a matter of right in four limited circumstances, which all
require an examination of the contract. In other words, a court
examines whether the contract was to pay, or render a
performance for, a monetary amount defined in the contract;
render a performance for a monetary amount that can be
calculated from standards set forth in the contract; or render a
performance for a monetary amount calculated from the
established market prices. The disputed amount must be
either specified in the contract or ascertained from the
terms of the contract such that at the time of the breach,
the breaching party can proffer a tender. The disputed
amount, in other words, must be liquidated at the time of the
breach as a prerequisite for prejudgment interest. In all other
circumstances, including an award of consequential damages,
prejudgment interest is awarded as a matter of discretion.
Cresci, 64 A.3d at 264-65 (emphasis added; internal citations omitted).
To illustrate, in Cresci, the appellant entered into a contract with a
construction company for it to build a home for the appellant for $184,730.
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Id. at 256. Aside from the cost of building the home, “the contract did not
specify or refer to any monetary values, established market prices, or other
fixed standards regarding a determination of mortgage expenses, legal
expenses, inspection fees, and the costs of maintaining two homes in the
event of a breach.” Id. After some time, the construction company filed a
complaint against the appellant, alleging that the appellant impeded the
efforts of the construction company in completing the contract, and claimed
that the appellant owed $34,378.56 on the balance of the contract. Id. at
256-57. In turn, the appellant counterclaimed for, inter alia, breach of
contract, asserting that the construction company “had failed to complete
several of the contract’s required obligations.” Id. at 257. Following a jury
trial, the jury found that the construction company breached the contract
and awarded the appellant $66,000 in breach-of-contract damages. Id.
However, the trial court did not award the appellant prejudgment interest,
determining that “the damages involved in this matter are simply not of the
kind envisioned by § 354(1) of the Restatement[,]” and that the appellant
“was adequately compensated by the jury’s verdict, and no further
prejudgment interest was warranted.” Id. at 258 (citations omitted).
On appeal, the appellant argued that “pre-judgment interest in a
breach of contract matter is a legal right.” Id. (citation omitted). He
averred that “he was forced to incur additional mortgage expenses, legal
expenses, inspection fees, and associated costs with maintaining two
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properties since the home was uninhabitable[,]” and “theorize[d] that
because the sums he claim[ed] [were] ascertainable, § 354(1) of the
Restatement (Second) of Contracts applie[d] and § 354(2) … [did] not.” Id.
(internal quotation marks and citations omitted). This Court, however,
disagreed. Significantly, we observed that the appellant did “not argue that
the contract provided for the payment of additional mortgage expenses,
legal expenses, inspection fees, and associated costs with maintaining two
properties[,]” or that “these sums constituted the reasonable costs of
completing the construction contract or correcting the defective work.” Id.
(internal quotation marks and citations omitted). Further, we reasoned:
In the case before us, we examine the contract to determine
whether [the a]ppellant is entitled to prejudgment interest as of
right. The contract specifically provided for the performance of a
construction of a home in exchange for $184,730, a monetary
amount defined by the contract. Thus, $184,730 is a liquidated,
ascertainable sum.
The contract, however, did not provide for a “performance” of
“mortgage expenses, legal expenses, inspection fees, and
associated costs with maintaining two properties.” The contract
also did not reference or permit a calculation of a monetary
value for those items. [The construction company],
therefore could not have tendered a proffer to [the
a]ppellant for those items, which necessarily required a
breach of contract to render a “performance” of those
items. [The construction company] is not charged with
interest as of right on the jury’s award of $66,000,
because that amount was not fixed by the construction
contract and [the construction company] could not have
ascertained that sum by construing the terms of the
contract. Accordingly, the jury’s non-specific award of $66,000
does not represent a liquidated, ascertainable sum owed under
the contract.
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The jury’s award … “represents a loss incurred by [the a]ppellant
as a consequence” of [the construction company’s] breach “of
the promised performance” to construct the home. Thus,
contrary to [the a]ppellant’s claim, an award of prejudgment
interest on consequential damages is not awarded as a matter of
right but is instead left to the court’s discretion. [The a]ppellant,
however, elected not to order the trial transcript. Thus, this
Court cannot ascertain whether the trial court abused its
discretion in declining to award prejudgment interest on an
unliquidated sum.
Cresci, 64 A.3d at 264-66 (internal citations, original brackets, footnotes
omitted; some emphasis in original).
In the case sub judice, the trial court considered Cresci and found it
distinguishable in multiple ways, most notably in that Appellees’ damages
constituted the cost of correcting Cutler’s defective performance under the
parties’ contract. It reasoned:
The contract between the parties, like the contract in Cresci,
was for the construction of a home for a negotiated sum.
[Appellees] argued at trial, and in their post-trial motion, that
part and parcel of [Cutler’s] agreement to construct their home
was the agreement to build that home (as set forth in the
contract’s language) in accordance with industry practice and
standards. [Appellees] contend that they demonstrated at trial
that when it came to the stucco in particular, [Cutler] did not
fulfill its contractual, performance obligation. Thus, according
to [Appellees], the first requirement of Cresci — a
contract to render a performance for a monetary amount
— has been demonstrated.
[Cutler] counters that the amount on which [Appellees] seek
interest does not relate to a “performance” contracted for by the
parties. [Cutler] argues that “remediation work” was not part of
the contract and not part of [Cutler’s] agreed to performance.
The court agrees with [Appellees] that the damages
sought, and awarded in this case, represent the cost of
correcting the defective performance undertaken by
[Cutler]. [Appellees’] breach of contract claim was not
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based upon a contractual obligation to remediate, but
centered upon [Cutler’s] failure to perform the
construction in accordance with the contract’s terms.
[Cutler] mistakenly directs this court’s attention to the fact that
the Cresci court denied the applicant’s request for interest on
mortgage expenses, legal expenses and similar costs related to
maintaining a second property while the contracted home was
completed. Although the court did refuse to award interest on
such sums, in analyzing whether the amount requested was part
of the contract[,] the court offered the following material
distinction with regard to the appellant’s request. The Superior
Court wrote[:]
[The appellant] does not argue that the contract provided
for the payment of additional mortgage expenses, legal
expenses, inspection fees, and associated costs with
maintaining two properties ... [The appellant] also does
not argue that these sums constituted the reasonable
costs of completing the construction contract or
correcting the defective work.
[]Cresci, 64 A.3d at 258[] (emphasis added[])[.]
What [the] appellant failed to argue in Cresci, is exactly what
[Appellees] argue here. [Cutler] contracted to perform the
construction of their home in accordance with certain
standards and failed to render the contractually agreed
upon performance. The nature of the claim in this case
falls squarely within the parameters of the parties’
contract.
As for whether or not the underlying debt is a liquidated sum, as
defined in the Restatement and Cresci, the court concludes that
it is. Admittedly, the contract does not set forth a fixed amount
for each phase of construction, for example, the value of the
stucco application and material. However, damages can be
considered “ascertainable from the contract” even if the
contract is silent. In such a case, if the value of the breached
performance is “ascertainable from established market prices of
the subject matter,” prejudgment interest shall be awarded. At
trial, [Appellees] presented evidence of market proposals they
obtained and provided to [Cutler] that detailed the cost of
completing and fixing their home’s construction in order to bring
it into compliance with the contract’s terms. The evidence at
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trial also showed that [Cutler] also obtained its own proposal for
completing the necessary work. Thus, at the time
[Appellees] became aware of the breach, the amount of
the debt owed was certain and ascertainable such that
[Cutler] could have offered tender, if it had so desired.
Pre-judgment interest is thus warranted.
Trial Court Order Regarding Appellees’ Post-Trial Motion, 7/12/2016, at 1 n.1
(original brackets omitted; some emphasis in original). We agree with the
trial court’s analysis, and believe that it properly determined that
prejudgment interest was warranted as a matter of right under Section
354(1).
Nevertheless, even if not awardable as a matter of right, the trial court
would not have abused its discretion in awarding prejudgment interest to
Appellees under Section 354(2). See Trial Court Order Regarding Appellees’
Post-Trial Motion, 7/12/2016, at 1 n.1 (“[I]f … pre[]judgment interest was
not due [Appellees] as a matter of right, the court would nonetheless
exercise its discretion and award such interest to [Appellees].”). Cutler
claims that prejudgment interest awarded pursuant to the court’s discretion
is “characterized as compensation for delay of damages[,]” and is
appropriately awarded to prevent unjust enrichment and in situations where
the delay in compensation was attributable to the party opposing
prejudgment interest. Cutler’s Brief (First Appeal) at 26-27 (internal
quotation marks ad citation omitted). According to Cutler, it “did not unduly
delay or hold any property or money of … Appellees.” Id. at 28.
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We disagree. To start with, Appellees rightly assert that Cutler was
unjustly enriched because they “paid Cutler nearly one-half million dollars
for a Home built contrary to the performance Cutler promised [them] under
the Agreement and the Warranty.” Appellees’ Brief (First Appeal) at 48.
Furthermore, “[a]fter Cutler failed to fulfill its many promises to repair
[Appellees’] Home, [they] paid $85,980.94 out-of-pocket to bring their
Home in compliance with the standards and codes that Cutler fraudulently
promised to [Appellees] in the Warranty.” Id. at 48-49 (citation omitted).
We concur that “Cutler’s conduct deprived [Appellees] of the ability to use
this money for other purposes and also deprived [them] of the interest that
would have accrued on [their] money had it been saved or invested.” Id. at
49. Additionally, “[i]n 2010, Cutler acknowledged the existence of the
defects in the Home, but still failed to correct them, despite repeatedly
promising [Appellees], in writing, that Cutler would correct the defects, and
despite warranting at the time of purchase that Cutler had constructed the
Home according to industry standards and codes.” Id. (citations omitted).
The trial court also determined that Appellees did not perform
deficiently or make unreasonable demands of Cutler in a way that would
inhibit it from awarding them prejudgment interest under Section 354(2):
The court concludes that given all the circumstances, it sees no
deficiencies in the performance of [Appellees] as the injured
parties or any unreasonableness in the demands made by them
that would preclude the court from exercising its discretion. To
the contrary, having heard the evidence and testimony over the
course of the jury and non-jury portions of the case, it is clear to
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the court that [Appellees] did everything that was asked of them
by [Cutler] and provided [Cutler] multiple opportunities to
correct its deficiencies. The result of which is that [Appellees]
paid for a performance that was never rendered and should be
entitled to interest on those monies.
Trial Court Order Regarding Appellees’ Post-Trial Motion, 7/12/2016, at 1
n.1. Thus, in light of the above considerations, we discern no abuse of
discretion by the trial court in awarding prejudgment interest under Section
354(2).
Fourth and fifth, Cutler argues that “the trial court erred in awarding
Appellees additional costs and attorneys[’] fees for the time period after
January 1, 2016[.]” See Cutler’s Brief (First Appeal) at 28 (unnecessary
capitalization and emphasis omitted).11,12 This Court is “mindful that we
may not disturb a trial judge’s assessment of these amounts unless there
has been an abuse of discretion.” Richards v. Ameriprise Financial, Inc.,
152 A.3d 1027, 1038 (Pa. Super. 2016) (citation omitted).
Cutler argues that the trial court’s “award of the additional fees and
costs constitutes a windfall for … Appellees.” Cutler’s Brief (First Appeal) at
____________________________________________
11
We consider Cutler’s fourth and fifth issues together because Cutler has
briefed them as a single issue. See Cutler’s Brief (First Appeal) at 28-32.
12
Cutler reiterates the same arguments here that attorneys’ fees and costs
should be discounted as there is “no statutory authority for awarding
attorney[s’] fees for time spent pursing [sic] non-UTPCPL counts.” Cutler’s
Brief (First Appeal) at 30 (citation and internal quotation marks omitted).
Because we have already rejected this argument, supra, we do not duplicate
our analysis here.
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30. Specifically, Cutler claims that “[t]he time spent on the UTPCPL bench
trial and any motions or responses drafted after the trial all fall under …
Appellees’ contingent fee agreement. This agreement represents the full
attorneys’ fees in this case.” Id. at 32.13 In short, Cutler seems to claim
that the trial court improperly relied upon the UTPCPL’s fee-shifting provision
to award Appellees additional attorneys’ fees and costs, given that there was
a contingency agreement — instead of an hourly fee agreement — between
Appellees and their counsel. Id. at 31.
Cutler proffers no authority in support of this particular argument.
See id. at 30-32. As such, we determine it is waived. See Lackner v.
Glosser, 892 A.2d 21, 29-30 (Pa. Super. 2006) (stating that “arguments
which are not appropriately developed are waived[,]” and that “[a]rguments
not appropriately developed include those where the party has failed to cite
any authority in support of a contention”) (citations omitted).
Further, even if not waived, we would still permit Appellees to receive
attorneys’ fees and costs pursuant to their UTPCPL claim in additional
amounts for the time period between January 1, 2016 to August 16, 2016.
Cutler has not convinced us that the trial court abused its discretion because
____________________________________________
13
Cutler explains that Appellees “entered into a contingent fee agreement
on August 13, 2015. Before that time[, Appellees] had been paying their
attorneys by billed hours.” Cutler’s Brief (First Appeal) at 32 (citation
omitted).
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“Appellees never expected to pay the hourly fees or costs recorded after
August 13, 2015, and … Appellees’ attorneys never expected to collect those
fees or costs.” Cutler’s Brief (First Appeal) at 31. We have opined before
that “it would be inappropriate to apply a contingency fee agreement to
create a ceiling (or for that matter, a closed door) on the recovery of
attorneys’ fees under a fee-shifting provision of a remedial statute.” Krebs
v. United Refining Co. of Pennsylvania, 893 A.2d 776, 791 (Pa. Super.
2006). Additionally, Cutler’s underlying contention that Appellees did not
expect to pay — and their counsel did not expect to receive payment for —
costs after August 13, 2015, is not supported by the record. See Cutler’s
Brief (First Appeal) at 31. Appellees’ contingency agreement sets forth that
Appellees are “responsible for expenses[,]” which “are those costs which
relate to the investigation and prosecution of your claim[.]” See Appellees’
Exhibit 61. Therefore, Cutler’s argument would fail for this reason as well.
Sixth, Cutler asserts that “[t]he trial court erred in allowing the jury to
consider a claim under the breach of the express warranty as the evidence
did not support such a claim[.]” Cutler’s Brief (Second Appeal) at 19
(unnecessary capitalization and emphasis omitted).14 It argues that “[i]t
____________________________________________
14
“When reviewing the sufficiency of the evidence, this Court must
determine whether the evidence and all reasonable inferences therefrom,
viewed in the light most favorable to the verdict winner, was sufficient to
enable the factfinder to find against the losing party.” Bannar v. Miller,
701 A.2d 232, 238 (Pa. Super. 1997) (citation omitted). We note that, “[a]
(Footnote Continued Next Page)
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was error of law to allow the Jury to consider … Appellees’ Claim under
Breach of Express Warranty” because “[i]t had been made clear at [t]rial,
through the entry of the Warranty into evidence, and through testimony,
that the Warranty had expired well before any complaints were made by …
Appellees.” Id. at 20. To support its argument, Cutler elaborates:
[] Appellees made settlement on the home in question on
October 1, 2002. The Warranty is dated October 1, 2002, and it
was executed by the parties on the date of settlement. The
Warranty specifically states that “Seller warrants said premises
to be free of structural or mechanical defects for a period of one
year from the date of settlement.”[15] Appellee … Krishan
testified to the same during his direct testimony at trial. The
Warranty further states that[,] “During the second year after
_______________________
(Footnote Continued)
challenge to the sufficiency of the evidence in a civil case is reviewed on
appeal as a claim that the trial court erred in denying a motion for judgment
notwithstanding the verdict….” Atlantic LB, Inc. v. Vrbicek, 905 A.2d 552,
557 (Pa. Super. 2006) (citations omitted).
15
For context, this paragraph — referred to as “Paragraph 1” — states:
1. Seller shall assign to the Buyer all manufacturer’s guarantees
and service warranties held by Seller, including but not
limited to Roof, Plumbing, Heating, and Air Conditioning, and
kitchen appliances. Seller warrants said premises to be free
of structural or mechanical defects for a period of one (1)
year from the date of settlement, and Seller shall be
responsible for the correction of such defects found at the
premises during said one (1) year period, and shall act with
reasonable promptness to repair, reconstruct or otherwise
correct at Seller’s sole discretion such defects upon receipt of
notice in writing from Buyer of any such structural or
mechanical defects, and after Seller inspects same at said
premises.
Appellees’ Exhibit 10.
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commencement date, the builder continues to warrant that the
home will be free from major construction defects and that the
plumbing, electrical, heating and cooling systems will perform
according to the approved standards, unless their failure is the
result of a defect in an appliance, fixture, or item of
equipment.”[16] Again, Appellee [Krishnan] testified to the same
during his direct examination. Apellee [sic] … Krishnan testified
that he was aware that the stucco application is warranted for
one year.
The Warranty further warrants that … “In addition, seller
specifically warrants as follows, but not in limitation of
the general warranty stated above: (a), Your home has
been constructed in accordance with the accepted home
building practices of this locality and prior to delivery has
been inspected by our trained personnel as well as the
building inspector.”[17] There is no language extending this
warranty.
Appellee [Krishnan] further testified that “the first leak that we
saw that concerned us was in 2005.” At that time[, Appellees]
experienced leaks in the windows and powder room. There is no
____________________________________________
16
This portion, referred to as “Paragraph 2,” sets forth:
2. Coverage During Second Year. During the second year after
the commencement date, the Builder continues to warrant
that the home will be free from major construction defects
and that the plumbing, electrical, heating and cooling systems
will perform according to the Approved Standards, unless
their failure is the result of a defect in an appliance, fixture,
or item of equipment. A major construction defect is actual
damage to the load-bearing portion of the home (including
damage due to subsidence, expansion, or lateral movement
of soil from causes other than flood or earthquake) which
affects its load-bearing function and which vitally affects (or is
imminently likely to produce a vital effect on) the use of the
home for residential purposes.
Appellees’ Exhibit 10 (emphasis in original).
17
This provision is referred to as “Paragraph 3(a).”
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evidence that any water infiltration occurred prior to 2005.
[Appellees] did not provide any proof that the warranty extended
past the proscribed [sic] obvious one year coverage.
Id. at 16-17 (internal citations omitted; emphasis added). Based on the
foregoing, Cutler contends that “[t]he Express Warranty had expired by two
years when … Appellees raised complaints to [Cutler]. There was nothing
presented to show that the Warranty was extended past the given one or
two years, proscribed [sic] within the four corners of the Warranty.” Id. at
20.
In response, Appellees argue that Paragraph 3(a) of the Warranty,
quoted above, is not limited in time or scope. See Appellees’ Brief (Second
Appeal) at 28. We agree. Appellees aptly discern:
The introductory language—“In addition, seller specifically
warrants as follows, but not in limitation of the general
warranty stated above”—establishes that the representations
and warranties set forth in Paragraph 3 are separate and distinct
from, and “in addition” to, those representations and warranties
included in Paragraphs 1 and 2. Thus, the representations and
warranties in Paragraph 3(a) are not dependent upon or limited
by those in the two preceding paragraphs. Further, the plain
language of Paragraph 3(a) does not temporally limit the
representations and warranties therein. Thus, the trial court
correctly held that Cutler did not temporally limit the
representations and warranties in Paragraph 3(a).13 Holding
otherwise would have required the trial court to read additional
language into the Warranty….
13
The fact that Paragraph 3(a) is not temporally limited is
logical because, unlike some other paragraphs of the
Warranty, which warrant against the failure of certain
systems in the Home for a specific period of time,
Paragraph 3(a) warrants that the Home was built as it
should have been—i.e., in accordance with applicable
standards and codes.
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Id. at 29 (internal citations; emphasis in original). In light of the language
in Paragraph 3(a), we determine that there was evidence to support
Appellees’ breach of express warranty claim. Cutler warranted that
Appellees’ home had been constructed in accordance with the accepted
home building practices of their locality and was inspected by Cutler’s
trained personnel as well as the building inspector before delivery to
Appellees. Despite Cutler’s contentions, the language of Paragraph 3(a)
simply does not reflect that this warranty was limited to one or two years,
and had expired. As a result, the trial court did not err in instructing the
jury on the breach of express warranty claim.
Seventh, Cutler relatedly maintains that “the trial court erred by
refusing to grant a new trial because the jury’s verdict under the breach of
express warranty claim was against the weight of the evidence presented at
trial[.]” Cutler’s Brief (Second Appeal) at 16 (emphasis and unnecessary
capitalization omitted). Cutler contends that “[i]n the matter at hand the
evidence is not conflicting, … Appellees admitted that the Warranty executed
on October 1, 2002, was a limited warranty, and specified that it covers
periods of one (1) year, or two (2) years dependent upon the defect.” Id. at
17. Thus, according to Cutler, “[t]he facts and evidence are clear that the
warranty had expired before there were any issues with the home. … The
stucco was clearly warranted for only one year.” Id. at 18. Consequently,
Cutler claims that “[t]he Jury’s verdict was clearly against the weight of the
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evidence as no warranty existed at the time … Appellees experienced any
water infiltration in their home.” Id.
Initially, we note that “[t]his Court’s review of a weight claim is a
review of the trial court’s exercise of discretion, not of the underlying
question of whether we believe that the verdict is against the weight of the
evidence.” Alwine v. Sugar Creek Rest, Inc., 883 A.2d 605, 611 (Pa.
Super. 2005) (citation and internal quotation marks omitted). Moreover,
“[a] new trial will be granted on the basis that the jury’s verdict is against
the weight of the evidence only when the verdict is so contrary to the
evidence as to shock one’s sense of justice. In reviewing the trial court’s
refusal to grant a new trial on this basis, this Court reviews all of the
evidence.” Id. (citations omitted).
The crux of Cutler’s weight argument is that no warranty existed at the
time water infiltrated Appellees’ home in 2005. However, as explained
above, we agree with Appellees that “the representations and warranties in
Paragraph 3(a) were unlimited in time.” Appellees’ Brief (Second Appeal)
at 31 (emphasis in original). Further, as stated by the trial court, supra,
there was evidence presented that “[d]uring the stucco removal, Mr.
Lukowski documented dozens of violations of standard construction industry
practice and the building code applicable to the construction of [Appellees’]
Home….” See TCD at 8 (emphasis added); Appellees’ Brief (Second Appeal)
at 3. Thus, given Paragraph 3(a) and that Appellees’ home had numerous
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violations in contravention of the representations and warranties made by
Cutler, we do not deem the verdict to be so contrary to the evidence as to
shock one’s sense of justice. See Alwine, 883 A.2d at 611.
Eighth, Cutler insists that “[t]he court erred in allowing the jury to
consider a claim under the breach of implied warranty of habitability and
breach of implied warranty of workmanlike construction as the evidence did
not support the claim[.]” Cutler’s Brief (Second Appeal) at 24 (unnecessary
capitalization and emphasis omitted).18 Cutler advances two arguments to
support this claim: first, it states that “Appellees failed to plead or adduce
facts that any of the alleged defects rendered their home unfit to live in”;
and, second, that “the Agreement of Sale and Express Warranty provided to
… Appellees clearly limited any other warranty, specifically implied
warranties. … [T]he implied warranties were only covered for a one year
period.” Id. at 21, 22, 24 (citations omitted). We find both of these
contentions to be unpersuasive.
With respect to whether Appellees’ home was habitable, Cutler’s main
argument is that “[t]here was simply no evidence provided at trial that …
Appellees[’] home, either as constructed or after the alleged defects were
____________________________________________
18
We restate that “[w]hen reviewing the sufficiency of the evidence, this
Court must determine whether the evidence and all reasonable inferences
therefrom, viewed in the light most favorable to the verdict winner, was
sufficient to enable the factfinder to find against the losing party.” Bannar,
701 A.2d at 238 (citation omitted).
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discovered, was uninhabitable. [] Appellees never claimed or adduced facts
that the home could not be inhabited, and in fact, they resided in the[]
home full[-]time since making settlement.” Id. at 23. Yet, Cutler proffers
very little authority in support of its contention that if Appellees were able to
live in their home, the implied warranty of habitability was not breached.
This Court has previously discussed the warranty of habitability:
The implied warranty of habitability is a warranty based in a
contract for the sale of a home. See Tyus v. Resta, [476 A.2d
427, 431 (Pa. Super. 1984)]. This implied warranty was first
recognized in Pennsylvania in Elderkin v. Gaster, … 288 A.2d
771 ([Pa.] 1972). In Elderkin the Pennsylvania Supreme Court
recognized that as warranties were rarely given in home
construction contracts, and there was a wide disparity in
knowledge between the buyer and the seller, a theory of implied
warranties was necessary to safeguard the reasonable
expectations of the buyer. The Court reasoned:
One who purchases a development home ... justifiably
relies upon the skill of the developer that the house will be
a suitable living unit ...[.] The builder-vendor impliedly
warrants that the home he has built and is selling is
constructed in a reasonably workmanlike manner and that
it is fit for the purposes intended—habitation.
Id. at … 776. Warranties of habitability and reasonable
workmanship are not created by representations of the builder-
vendor but rather are implied in law and as such exist
independent of any representations of a builder-vendor. See
Tyus[,] 476 A.2d at 433.
Ecksel v. Orleans Const. Co., 519 A.2d 1021, 1026 (Pa. Super. 1987).
In Ecksel, the builder-vendor argued that the trial court “erred in
finding that a leaky basement breached the warranty of habitability.” Id. at
1026. However, this Court upheld the trial court’s decision, explaining:
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A house is a shelter. The whole purpose of building shelter
is to protect individuals and their property from the
elements—wind, water, fire, earth, etc. A basement is
part of the overall pursuit of this protection. The
[homeowner] proved that the basement cannot be used
even for storage. A continually wet basement indicated
the owner of the resident [sic] may not rely on a part of
that residence to protect individuals from at least one of
the elements—water. The purpose of building a house is
undone by the [builder-vendor’s] improper construction
created [sic] a premises unfit for human dwelling.
Additionally, there is precedent to uphold such a finding. In
Tyus … this Court upheld a lower court finding that a leaky
crawlspace breached the warranty of habitability. We will not
overturn the lower court’s determination that the leaky
basement in this case breached both the implied
warranties of habitability and reasonable workmanship.
Ecksel, 519 A.2d at 1026-27 (citations omitted; emphasis added). See
also Davis v. Northridge Development Associates, 622 A.2d 381, 387
(Pa. Super. 1993) (determining that implied warranty of habitability was not
met where the residence had “a cracked and leaking foundation”).
Here, Appellees reasonably explain:
[T]he construction defects that [Appellees] alleged in their
Complaint and ultimately established at trial are far more serious
than the conditions found to constitute breaches of the [i]mplied
[w]arranties in Ecksel, Davis, and Tyus. Cutler’s own agent,
Mr. McCarty, told [Appellee] Krishnan the walls in the Home
were “like butter” and areas of the Home were “clearly rotten.”
[Appellees] had to use buckets to hold falling water in various
rooms of the Home and several walls became discolored due to
water infiltration. The interior walls of [Appellees’] Home were
so wet that mushrooms sprouted.
Moreover, Mr. Lukowski documented substantial damage to OSB,
framing elements, insulation, and other components of the
Home. He observed massive holes, rotten insulation, OSB
resembling “mulch,” and toxic molds. In fact, Mr. Lukowski
documented significant damage resulting from water infiltration
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on every elevation of the Home. [Appellees] incurred
$85,980.94 in costs investigating and remediating the Home—
costs far below the amount Cutler characterized as the “best
price” for such substantial work.
The above evidence supported a finding that the defects at issue
seriously detracted from the value of the Home and cost
[Appellees] nearly $100,000.00 to investigate and correct.
Thus, the jury could certainly conclude that Cutler breached the
Implied Warranties.
Appellees’ Brief (Second Appeal) at 33-34 (internal citations omitted;
emphasis in original). We agree with Appellees that the water infiltration
supported their claim for breach of implied warranties, even though
Appellees continued living in the home.
Next, to show that the trial court erred in instructing the jury on the
issue of breach of implied warranties due to insufficient evidence, Cutler
avers that the implied warranties of habitability and workmanlike
construction “had expired when … Appellees raised complaints to …
[Cutler].” Cutler’s Brief (Second Appeal) at 25. It states:
[T]he Agreement of Sale and Express Warranty provided to …
Appellees clearly limited any other warranty, specifically implied
warranties. The clear and unambiguous language of the Express
Warranty states, “Implied warranties of the builder will last only
as long as the term of this written warranty.” The Express
Warranty … is limited to a one (1) year term. [] Appellees
signed and executed the Express Warranty. It follows that the
implied warranties were only covered for a one year period.
Id. at 22 (internal citations omitted).
But, in limiting implied warranties, this Court has previously instructed
that,
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[b]ecause of the special knowledge of the builder-vendor in a
home construction situation, language purportedly creating an
express restriction or exclusion of an implied warranty must be
strictly construed against the builder-vendor. Additionally, due
to the important consumer interests protected by an implied
warranty, any attempt to disclaim such a warranty must be clear
and unambiguous. The language must also be specific and
particular to the legal rights the buyer is waiving and
their relation to their effect on specifically designated
potential latent defects. Evidence that the parties actually
negotiated the release will tend to indicate that the purchaser
made a knowing waiver of his or her rights.
Ecksel, 519 A.2d at 1025 (internal citations omitted; emphasis added).19
As Appellees observe, “the language in the Warranty does not mention
‘habitability’ or ‘reasonable workmanship.’ It simply uses the generic term
‘implied warranties.’ Thus, the language did not provide [Appellees] with
adequate notice of the specific implied warranty protections they were
purportedly waiving by signing the Warranty.” Appellees’ Brief (Second
Appeal) at 35 (citations omitted). Furthermore, Appellees point out that
“the Warranty is silent on potential defects,” and that “the supposed
‘limiting’ language in the Warranty was not negotiated by the parties; it was
part of Cutler’s boilerplate Warranty.” Id. Due to these deficiencies, we
cannot conclude that the implied warranties of habitability and reasonable
____________________________________________
19
See also Pontiere v. James Dinert, Inc., 627 A.2d 1204, 1206 (Pa.
Super. 1993) (“[A] builder-vendor may not exclude the implied warranty of
habitability absent ‘particular’ language which is designed to put the buyer
on notice of the rights he is waiving. There is nothing particular about the
contract language involved in this case. Indeed, it makes no reference at all
to the warranty of ‘habitability,’ referring only to the warranties of
merchantability and fitness for a particular purpose.”).
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workmanship were properly limited and, as a consequence, had expired. As
such, we discern no error on these grounds.
Ninth, Cutler claims that “[t]he trial court erred by refusing to grant a
new trial because the jury’s verdict under the breach of implied warranty of
habitability and implied warranty of workmanlike construction claims was
against the weight of the evidence presented at trial[.]” Cutler’s Brief
(Second Appeal) at 21 (unnecessary capitalization and emphasis omitted).
Cutler states that the verdict was against the weight of the evidence for the
same reasons discussed above: Appellees resided in the home full time since
making settlement, and “[n]o terms extended any part of the Implied
Warranties beyond the agreed upon one year provision within the Express
Warranty….” Id. at 23. Again, for the reasons stated above, we do not
conclude that the verdict is so contrary to the evidence as to shock one’s
sense of justice, see Alwine, 883 A.2d at 611, as the extensive water
infiltration made Appellees’ house uninhabitable and the implied warranties
had not expired.
Tenth, Cutler claims that the trial court “erred in finding that [Cutler]
violated the [UTPCPL] by breaching the express warranty[.]” Cutler’s Brief
(Second Appeal) at 27 (unnecessary capitalization and emphasis omitted).20
____________________________________________
20
Once again, “[w]hen reviewing the sufficiency of the evidence, this Court
must determine whether the evidence and all reasonable inferences
therefrom, viewed in the light most favorable to the verdict winner, was
(Footnote Continued Next Page)
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Cutler explains that, following the two-day bench trial on Appellees’ claims
for violations of the UTPCPL, the trial court “found that [Cutler] breached the
UTPCPL by failing to honor the written Warranty.” Id. (citation omitted).
According to Cutler, the trial court erred in this finding because “the Express
Warranty on which the Claims were based had expired at least two years
before Appellees had any alleged issues.” Id. It reiterates that “[n]o
alleged issues presented until 2005, over three years after … Appellees
purchased their home. The Express Warranty clearly and unambiguously
limits the warranties made within to one (1) year.” Id. at 31 (citations
omitted). For the reasons already addressed above, we deem that this
argument is meritless, as Paragraph 3(a) of the Warranty was not limited in
time.
Eleventh, Cutler argues that the trial court committed an error of law
and abused its discretion in refusing to dismiss Appellees’ claims under the
UTPCPL because their claim was barred under the statute of limitations. See
Cutler’s Brief (Second Appeal) at 5, 27-29. Cutler maintains that the statute
of limitations on a claim under the UTPCPL is six years, which Appellees do
not dispute. See id. at 27-28; Appellees’ Brief (Second Appeal) at 37-38.
The issue, therefore, is when the six-year statute of limitations began to run.
_______________________
(Footnote Continued)
sufficient to enable the factfinder to find against the losing party.” Bannar,
701 A.2d at 238 (citation omitted).
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Without offering any specific authority in support, Cutler claims that
“the Statute of Limitations began to run at the time that [Appellees]
allegedly sustained the required ‘ascertainable loss’ under the UTPCPL.”
Cutler’s Brief (Second Appeal) at 28. Consequently, Cutler advances that
“the date of the settlement on [Appellees’] home, October 1, 2002[,] was
the date that the Statute of Limitations began to run. Furthermore, the
[trial court] held that the breach occurred in 2002 when [Cutler] presented
Appellees with the warranty and warranted that the home was built in
accordance with accepted home building practices[,]” which the trial court
found to be “false.” Id. at 28-29. Because Appellees did not commence this
action until March 1, 2012, Cutler says that their claims are barred. Id. at
29. Moreover, Cutler states that “even if we assume, en arguendo, that the
Statute of Limitations did not begin to run until [Appellees] first noticed an
issue with water leaking, which was May 5, 2005, Appellees’ claim under the
UTPCPL would still be time barred.” Id. Again, we disagree.
Under the UTPCPL, “unfair or deceptive acts or practices” include the
following, which are also at issue in this case:
(vii) Representing that goods or services are of a particular
standard, quality or grade, or that goods are of a particular style
or model, if they are of another;
…
(xiv) Failing to comply with the terms of any written guarantee
or warranty given to the buyer at, prior to or after a contract for
the purchase of goods or services is made;
…
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(xxi) Engaging in any other fraudulent or deceptive conduct
which creates a likelihood of confusion or of misunderstanding.
73 P.S. § 201-2(4)(vii), (xiv), (xxi). As the trial court recognized, “[a]ny
failure by [Cutler] to honor its written warranty by necessity occurred after
the settlement date. It is the failure to honor the warranty, not necessarily
the issuance of the warranty that triggers liability and generates a UTPCPL
claim.” TCD at 13 (emphasis in original). Thus, the trial court explained
that “[i]t wasn’t until [Appellees] and Cutler learned of the water infiltration
caused by the construction failures, [Cutler] failed to search for and solve
the problem[,] and refused to abide by its warranty that the violation
occurred and the claim arose. Those events occurred no earlier than 2010.”
Id. at 13-14. Accordingly, we concur with the trial court that Appellees’
claims are not barred by the statute of limitations.
Twelfth, Cutler contends that the trial court committed an error of law
and abused its discretion “in finding that [Cutler] violated the [UTPCPL]
when [Appellees] should not have been permitted to show reliance outside
of the agreement of sale under the parol[] evidence rule[.]” See Cutler’s
Brief (Second Appeal) at 5, 30-31 (unnecessary emphasis and capitalization
omitted). It states that “[t]he parol[] evidence rule functions in
Pennsylvania to bar the introduction of evidence concerning alleged prior
misrepresentations when a writing is adopted by the parties as the final and
complete expression of their agreement.” Id. at 30. Therefore, Cutler
claims that “[t]he integration clause … precludes Appellees from
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demonstrating the requisite element of reliance necessary to sustain a cause
of action for violation of the UTPCPL.” Id. Additionally, Cutler says that
“Appellees[’] allegations and testimony that [Cutler] violated the UTPCPL by
making any representations outside of the Agreement of Sale cannot prove
said claim.” Id.
We recognize that a plaintiff must show, inter alia, justifiable reliance
on the defendant’s wrongful conduct to bring a private cause of action under
the UTPCPL. See Yocca v. Pittsburgh Steelers Sports, Inc., 854 A.2d
425, 438 (Pa. 2004) (“To bring a private cause of action under the UTPCPL,
a plaintiff must show that he justifiably relied on the defendant’s wrongful
conduct or representation and that he suffered harm as a result of that
reliance.”) (citations omitted); Kern v. Lehigh Valley Hosp., Inc., 108
A.3d 1281, 1289-90 (Pa. Super. 2015) (“[J]ustifiable reliance is an element
of private actions under Section 201–9.2 of the UTPCPL. As such, [the
a]ppellant had to demonstrate that he … justifiably relied on [the a]ppellee’s
alleged violations of the UTPCPL and, as a result of those alleged violations,
suffered an ascertainable loss.”). Nevertheless, we believe that Cutler’s
argument invoking the parol evidence rule is misplaced.
Our Supreme Court has previously described the parol evidence rule 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. All preliminary
negotiations, conversations and verbal agreements
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are merged in and superseded by the subsequent
written contract ... and unless fraud, accident or mistake
be averred, the writing constitutes the agreement between
the parties, and its terms and agreements cannot be
added to nor subtracted from by parol evidence.
Therefore, for the parol evidence rule to apply, there must be a
writing that represents the “entire contract between the parties.”
To determine whether or not a writing is the parties’ entire
contract, the writing must be looked at and “if it appears to be a
contract complete within itself, couched in such terms as import
a complete legal obligation without any uncertainty as to the
object or extent of the [parties’] engagement, it is conclusively
presumed that [the writing represents] the whole engagement of
the parties....” An integration clause which states that a writing
is meant to represent the parties’ entire agreement is also a
clear sign that the writing is meant to be just that and thereby
expresses all of the parties’ negotiations, conversations, and
agreements made prior to its execution.
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. One exception to this general rule is that parol
evidence may be introduced to vary a writing meant to be the
parties’ entire contract where a party avers that a term was
omitted from the contract because of fraud, accident, or
mistake. In addition, where a term in the parties’ contract is
ambiguous, “parol evidence is admissible to explain or clarify or
resolve the ambiguity, irrespective of whether the ambiguity is
created by the language of the instrument or by extrinsic or
collateral circumstances.”
Yocca, 854 A.2d at 436-37 (internal citations, brackets in original, and
footnote omitted; emphasis added).
In the case sub judice, the trial court rejected Cutler’s argument
because — as our Supreme Court discussed in Yocca — the parol evidence
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rule applies only to previous negotiations, conversations and verbal
agreements. It opined:
[Cutler] … argues that the integration clause in [Appellees’]
Agreement of Sale prevents [Appellees] from establishing
justifiable reliance required for a successful UTPCPL [claim]
because they cannot rely on any representations made by
[Cutler] before execution of the Agreement of Sale. Although
that may be true, this princip[le] is not applicable to [Appellees’]
UTPCPL claims. The UTPCPL violations committed by [Cutler] as
alleged by [Appellees] arose at various times at or following
settlement on their home. It is this distinction that [Cutler’s]
argument regarding the parol evidence rule overlooks.
[Appellees] are not relying on oral representations or statements
made before or at the time of the Agreement of Sale or in
promotional materials or the like. Rather, they are asserting a
claim based upon a written warranty that was expressly
referenced in the Agreement of Sale, executed by [Appellees]
and presented to them thereafter. [Appellees] justifiably relied
on Cutler’s written representations and warranties that their
home had been built according to applicable standards and
properly inspected prior to settlement. It had not been so
constructed when [Appellees] executed the written Warranty on
October 1, 2002[,] and Cutler knew it. [Appellee] Krishnan
testified that the warranty was important to him as was the
building of a quality, well-constructed home. It was clear to the
court from the testimony of [Appellees], which it found credible,
that they relied upon Cutler’s assurances that it would honor its
warranty, investigate their reported problems, solve the water
problem[,] and repair their home to bring it in accordance with
the Warranty. This proved not to be the case. Rather than
investigate the source of [Appellees’] water infiltration, [Cutler]
simply engaged in a superficial “repair” of [Appellees’] windows.
All of this conduct engaged in by Cutler resulted in water
damage to [Appellees’] home and later an exacerbation of that
problem when Cutler undertook a series of so-called repairs that
it knew would be futile in preventing additional water infiltration.
Although Cutler presented the court with expert testimony on its
behalf, the court found more credible the testimony of
[Appellees’] expert Mr. Lukowski. He testified that the cause of
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the water intrusion, included among other things, the non-
compliant thin stucco applied to [Appellees’] Home. [Appellees]
have demonstrated to the court’s satisfaction the reliance and
causal connection necessary to recover on their UTPCPL claims.
TCD at 21-22 (internal citation omitted). As such, because Appellees’ claims
are based on a written warranty clearly referenced in the sale agreement
and presented to them thereafter — as well as on Cutler’s failure to honor
the warranty following settlement — we likewise conclude that the parol
evidence rule did not bar Appellees from demonstrating reliance in this case.
Thirteenth, Cutler alleges that “[t]he lower court erred in finding that
[Appellees] proved justifiable reliance sufficient to show a violation of the
[UTPCPL.]” Cutler’s Brief (Second Appeal) at 32 (unnecessary capitalization
and emphasis omitted). As addressed above, “[t]o bring a private cause of
action under the UTPCPL, a plaintiff must show that he justifiably relied on
the defendant’s wrongful conduct or representation and that he suffered
harm as a result of that reliance.” See Yocca, 854 A.2d at 438. Here,
Cutler alleges that “Appellees did not prove that they justifiably relied upon
the Warranty, either in making the purchase or while [Cutler] was
performing work on the house after the water infiltration began.” Cutler’s
Brief (Second Appeal) at 35. Specifically, it argues:
In the matter at hand[,] the [l]ower [c]ourt found that …
Appellees justifiably relied upon [Cutler’s] actionable conduct.
However, [Appellee] Krishnan testified only that it was important
to him that the home was built by a builder who was standing
behind his work and that warranty was important to them.
Although [Appellee] Krishnan does not recall when he received
the Warranty, or when he first read it, he believes it was part of
a pre-settlement packet.
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Significantly[,] Appellees contend[,] and the [l]ower [c]ourt
found[,] that [Cutler] made representations in the warranty. []
Appellees signed the sale [agreement] on August 24, 2002.
However, Appellee [Krishnan] clearly testified that he did not
recall receiving the warranty, and that it may have been in a
pre[-]settlement packet. Accordingly[,] Appellees could not
have read the warranty prior to purchasing the home, and
therefore they could not have relied on any representations
contained therein.
He also stated that he assumed, that [Cutler] was making the
early repairs under the warranty. There is no testimony or
evidence that the repairs or alleged representations made
regarding repairs were done under or through the written
Warranty. More importantly[,] Appellees did not present any
evidence that [Cutler] made representations that the work was
being done under the warranty or that it was covered by the
warranty. Therefore, there is no evidence that … Appellees had
a justifiable belief that the repairs were being made under the
written warranty. They merely assumed it was such. No
representations were made by [Cutler] or any employee thereof
that the repairs were being made under the warranty and
therefore … Appellees could not have relied on any such
representations. An assumption is not proof, and there was no
evidence presented that any representations were made which
would lead … Appellees to believe the work was being done
pursuant to the written [w]arranty.
Id. at 33-34 (internal citations omitted; emphasis in original).
Our review of the trial transcript reveals that Appellee Krishnan
testified to the following:
[Appellees’ Attorney:] Okay. I’m going to turn your attention to
Exhibit 9 in the binder. Can you identify this document?
[Appellee Krishnan:] Yes. So this appears – this seems to be the
Homeowner Guide to Warranties and Maintenance. …
[Appellees’ Attorney:] So this is just the Homeowners Guide to
Warranties and Maintenance, before the actual signed warranty,
correct?
[Appellee Krishnan:] Yes.
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[Appellees’ Attorney:] Just turning your attention to Page 2 in
your binder, did you have an opportunity to read this prior to
closing?
[Appellee Krishnan:] Yes.
[Appellees’ Attorney:] And you considered all the things that
were in here before moving forward with the transaction,
correct?
[Appellee Krishnan:] Yes, we did.
[Appellees’ Attorney:] Okay. Just turning your attention to that
second paragraph right there where it says, “Your home has
been constructed by skilled tradesmen using both modern
methods and materials”; do you see that?
[Appellee Krishnan:] Yes, I do.
[Appellees’ Attorney:] And it says, “However, no matter how
careful we try to be, when dealing with the human element,
there are bound to be some oversights”; do you see that,
correct?
[Appellee Krishnan:] Yes. …
[Appellees’ Attorney:] What is it that you understood to be
represented to you when you read this document?
[Appellee Krishnan:] That … Cutler has skilled people and
experienced people who are building the house, and that there
might be some issues, but mostly caused by human error.
[Appellees’ Attorney:] Turning now to the next exhibit in your
binder, which would be [Appellees’] Exhibit 10. Could you
identify this document for the jury?
[Appellee Krishnan:] Yes. This is labeled as the Home Warranty
Agreement – Limited Warranty, Home Warranty Agreement.
[Appellees’ Attorney:] And this was given to you as part tof [sic]
that homeowners and maintenance package that I just showed
you in [Appellees’] Exhibit 9, correct?
[Appellee Krishnan:] Yes.
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[Appellees’ Attorney:] So the two of them together really should
be just one document that you received at the same time?
[Appellee Krishnan:] Yes.
[Appellees’ Attorney:] And you received this prior to settlement?
[Appellee Krishnan:] Yes.
[Appellees’ Attorney:] And you reviewed this document prior to
settlement?
[Appellee Krishnan:] Yes.
[Appellees’ Attorney:] Is that your signature in the middle of the
page --
[Appellee Krishnan:] Yes.
[Appellees’ Attorney:] – on the right-hand side writ [sic] says
purchasers?
[Appellee Krishnan:] Correct.
[Appellees’ Attorney:] Okay. And what you did [sic] understand
this document was doing when you looked at it?
[Appellee Krishnan:] This was giving specifics of the warranty
that’s there, and really that it’s part of the sale for the house. …
[Appellees’ Attorney:] Referring to Paragraph 3, “In addition,
seller specifically warrants as follows, but not in limitation of the
general warranty stated above: (a), Your home has been
constructed in accordance with the accepted home building
practice of this locality and prior to delivery has been inspected
by our trained personnel as well as the building inspector,” do
you see that?
[Appellee Krishnan:] Yes, I see that.
[Appellees’ Attorney:] And what is it that you understood
Cutler was guaranteeing in that portion?
[Appellee Krishnan:] That they would build a quality home,
that they are following the building norms that are there,
they are following the building codes, and they are doing
what they have to do.
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[Appellees’ Attorney:] Did you rely upon these
representations in this warranty before purchasing your
home?
[Appellee Krishnan:] Yes. We really wanted to buy from a
builder who was standing behind his work, and I think
this is what we expected, and the fact that we had such a
warranty was important to us in making the decision to
buy the house.
N.T. Jury Trial, 12/7/2015, at 61-66 (emphasis added). Furthermore, with
respect to Cutler’s response to the water infiltration in Appellees’ home,
Appellee Krishnan testified:
[Appellees’ Attorney:] What action did you take – what, if any,
action did you take as a result of experiencing the water
infiltration in 2006?
[Appellee Krishnan:] We called up the service department of
Cutler and they sent somebody to repair the issues. …
[Appellees’ Attorney:] Do you have any understanding as to
what Cutler did when they were there?
[Appellee Krishnan:] We didn’t, again, receive something that
was in writing, but we were left with the assurance that
they had come in and fixed everything.
[Appellees’ Attorney:] Okay. Now, in 2005 and 2006, both times
after Cutler sent its service technicians to perform their work,
did you perform any individual inspections on your own?
[Appellee Krishnan:] No, no, because we relied on Cutler’s
competence and they had their people to come in and fix
it…. They have built houses, 6,000 houses, they have been
building houses for many, many years, and so my assumption
was that they knew what they were doing and when they will
come in and fix something, then it was fixed.
***
[Appellees’ Attorney:] And what, if anything, did you do in
response to observing this leaking in 2010?
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[Appellee Krishnan:] So we did the usual step of calling Mr.
Cutler’s service defendant [sic].
[Appellees’ Attorney:] And what was the response that you
received?
[Appellee Krishnan:] This time we are told that it was not their
problem, that they – actually, I think they spoke to my wife and
said contact the roofing company.
[Appellees’ Attorney:] Did they indicate – let me take you back
for a moment. When they performed their repairs in 2005
and 2006, did they charge you anything for that?
[Appellee Krishnan:] No.
[Appellees’ Attorney:] Did they indicate whether that was
under the warranty service?
[Appellee Krishnan:] That is what we assumed, and that’s
why we always called them, because that was the house
that they built.
***
[Appellees’ Attorney:] Okay. And I believe you testified
yesterday that in 2005 and 2006 Cutler came to repair the
house?
[Appellee Krishnan:] Correct.
[Appellees’ Attorney:] And that you relied upon those
repairs?
[Appellee Krishnan:] Exactly, exactly. Because we had the
problems and then Cutler’s service department came and
repaired it, and we were led to believe that they had fixed
the problems of the leak.
[Appellees’ Attorney:] When did Cutler tell you that your
home was out of warranty and that they wouldn’t be
making any repairs?
[Appellee Krishnan:] I think the first time they mentioned
that was in February, March of 2010, when we called
them. And that’s when they gave us the name of the
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roofing company and said you should go and talk to them,
but that there was no more warranty on the house.
[Appellees’ Attorney:] And did Mr. McCarty come to your house
after that on behalf of Cutler?
[Appellee Krishnan:] Correct, they [sic] did.
[Appellees’ Attorney:] And did Mr. Adams – or I should say, did
the representative from Tom Adams come to your house after
that conversation?
[Appellee Krishnan:] Correct.
[Appellees’ Attorney:] And, again, as Mr. Pancio had asked
in his cross-examination, you didn’t pay for any of those
visits, correct?
[Appellee Krishnan:] Correct, we didn’t pay anything.
N.T. Jury Trial, 12/7/2015, at 70, 71-72; N.T. Jury Trial, 12/8/2015, at 24-
25 (emphasis added).
Based on the above testimony, and viewing the evidence in light most
favorable to Appellees as the verdict winner, we consider the evidence
sufficient to support the trial court’s findings that Appellees justifiably relied
on the Warranty in purchasing the home and seeking remediation from
Cutler. See Bannar, 701 A.2d at 238 (citation omitted). With respect to
the home purchase, Appellee Krishnan clearly testified that he reviewed the
Warranty before settlement, and he valued that he was buying a quality
home by which Cutler would stand.21 Moreover, the evidence supports the
____________________________________________
21
Appellees also point out that “the [sale] Agreement, which [Appellees]
signed before receiving the Warranty, allow[ed] [them] to terminate the sale
(Footnote Continued Next Page)
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trial court’s finding that Appellees justifiably relied upon Cutler’s assurances
to remediate their home pursuant to the warranty. See TCD at 22. As
Appellees persuasively remark:
[] Cutler’s argument that the trial court erred in finding that
[Appellees] proved justifiable reliance because [Appellee]
Krishnan only “assumed” that Cutler was making repairs under
the Warranty is nonsensical. Cutler repeatedly made purported
“repairs” to the Home, free of charge, and also repeatedly
assured [Appellees] that Cutler corrected the water infiltration
issue. In fact, [Appellees] communicated directly with Cutler’s
Service Department and, in particular, Cutler’s Warranty
Manager … regarding the “repairs.” In any event, it was not
until February 2010, nearly five years after Cutler performed the
first set of “repairs,” that Cutler refused to perform “repairs,”
telling [Appellees] that it would no longer do so solely because
the Warranty had purportedly expired.
Appellees’ Brief (Second Appeal) at 41-42 (internal citations omitted). We
deem the evidence and all reasonable inferences therefrom, when
viewed in the light most favorable to Appellees, sufficient to enable the trial
court to find that Appellees justifiably thought that Cutler was repairing the
house pursuant to the warranty. See Bannar, 701 A.2d at 238 (citation
omitted). Accordingly, we see no error in the trial court’s findings regarding
justifiable reliance on these grounds.
Fourteenth and fifteenth, Cutler alleges that “the trial court erred in
finding that [Cutler] violated the [UTPCPL] because Appellees did not prove
_______________________
(Footnote Continued)
prior to settlement.” Appellees’ Brief (Second Appeal) at 41 (citation
omitted).
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fraud by clear and convincing evidence[,]” and that Appellees were required
“to establish the common law elements of fraud in order to support their
claims under the [UTPCPL.]” Cutler’s Brief (Second Appeal) at 5, 35
(emphasis and unnecessary capitalization omitted).22,23 Cutler states that
“[t]he Superior Court of Pennsylvania has held that plaintiffs are required to
prove the elements of common law fraud in order to sustain a claim under
the provisions of the UTPCPL[,]” and argues that Appellees “failed to
introduce any evidence to support a finding of common law fraud sufficient
to show [Cutler] violated the UTPCPL.” Id. at 35, 36 (citing Ross v.
Foremost Ins. Co., 998 A.2d 648, 654 (Pa. Super. 2010)).24,25 We believe
this is a misstatement of the law.
____________________________________________
22
We consider these issues together because Cutler briefed them as a single
issue. See Cutler’s Brief (Second Appeal) at 35-39.
23
We note that these issues “involve statutory interpretation, raise a
question of law, and are subject to de novo and plenary review.” Bennett
v. A.T. Masterpiece Homes at Broadsprings, LLC, 40 A.3d 145, 151 (Pa.
Super. 2012) (citation omitted).
24
This Court has noted that:
To state a claim for common law fraud, the plaintiff must show:
(1) a representation; (2) material to the transaction at issue; (3)
made falsely, with either knowledge or reckless disregard of its
falsity; (4) with the intent to misleading another person or
inducing justifiable reliance; and (5) an injury caused by the
reliance.
Bennett, 40 A.3d at 152 n.5 (citation omitted).
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Cutler advances its position as follows:
[I]n Fazio v. Guardian Life Ins. Co. of Am[erica], … 62 A.3d
396 (Pa. Super. 2012), the Superior Court … held that plaintiffs
are required to prove the common law elements of fraud to
support their UTPCPL claim or alternatively, deceptive conduct
for purposes of stating a catchall UTPCPL claim under the 1996
amendments. Id. Therefore, the Court has stated that plaintiffs
must prove either deceptive conduct under the catchall provision
or prove all of the elements of common law fraud under any
other provision. As the Court has acknowledged, the UTPCPL is
based in fraud, and the Catchall provision was amended to
include the term “deceptive.” According to Fazio, supra, it
follows that the lower burden of deceptive conduct does not
extend to the other provision of the UTPCPL. Id. Logically, if a
violation of a warranty, in and of itself, without the proof of
fraud, is a violation of the UTPCPL all warranties which are
violated could be also brought under the statute. This cannot be
the purpose of the legislature.
Cutler’s Brief (Second Appeal) at 37-38 (some emphasis in original).
To begin, we note that the Fazio Court was considering whether the
appellants in that case had a right to a jury trial on their UTPCPL claims.
Fazio, 62 A.3d at 400. The appellants argued, among other things, that
“even if the UTPCPL does not provide for a jury trial, claims under the
UTPCPL are grounded in common law fraud[,]” and “[b]ecause fraud was a
cause of action that existed at the time the Pennsylvania Constitution was
adopted, … they were entitled to a jury trial.” Id. at 402. In support of this
argument, the appellants relied on Toy v. Metropolitan Life, 928 A.2d 186
_______________________
(Footnote Continued)
25
As discussed further, infra, this Court has previously stated that Ross is
“not binding to the extent [it] purport[s] to interpret the post-amendment
catchall provision of the UTPCPL.” Bennett, 40 A.3d at 155.
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(Pa. 2007), “for the proposition that UTPCPL claims are solely grounded in
common law fraud.” Id. at 409. Relying on Toy, the Fazio Court
commented, in dicta, that the appellants “were required to prove the
common law elements of fraud to support their UTPCPL claim (or
alternatively, deceptive conduct for purposes of stating a catchall UTPCPL
claim under the 1996 amendments)….” Id. at 409-10.
Our Supreme Court’s decision in Toy, however, merely held that “a
plaintiff alleging violations of the Consumer Protection Law must prove the
common law fraud element of justifiable reliance[,]” not all of the
elements of common law fraud. Toy, 928 A.2d at 208 (emphasis added).
In addition, the Fazio Court ultimately concluded that the UTPCPL “did not
merely codify common law claims of fraud. The UTPCPL created a distinct
cause of action for consumer protection. While a plaintiff is required to
prove elements of common law fraud to support certain UTPCPL claims,
he/or she would still have to prove the elements of a consumer-based
transaction or relationship.” Id. at 411.
Moreover, as mentioned, supra, Appellees assert that Cutler violated
the UTPCPL under subsections 201-2(4)(vii) (“Representing that goods or
services are of a particular standard, quality or grade, or that goods are of a
particular style or model, if they are of another”); 201-2(4)(xiv) (“Failing to
comply with the terms of any written guarantee or warranty given to the
buyer at, prior to or after a contract for the purchase of goods or services is
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made); and 201-2(4)(xxi) (“Engaging in any other fraudulent or deceptive
conduct which creates a likelihood of confusion or misunderstanding”), which
is also referred to as the “catchall” provision. This Court has established
that a plaintiff does not need to prove common law fraud to state a claim
under the current catchall provision. See Bennett, 40 A.3d at 154 (“A
contrary reading that adheres to the common law fraud requirement for
cases arising under the post-amendment catchall provision ignores the
textual changes of the 1996 amendment as well as the rules of statutory
construction.”). Furthermore, Cutler has not cited any appellate authority to
support that subsections 201-2(4)(vii) and 201-2(4)(xiv) require Appellees
to prove each of the elements of common law fraud.
Finally, we find compelling the trial court’s observation that:
The UTPCPL defines the failure to comply with a written warranty
as an “unfair method of competition” and “unfair or deceptive act
or practice.” It is not defined as fraudulent conduct. Although
Pennsylvania courts require that the traditional elements of
common law fraud — justifiable reliance and causation — be
components of every UTPCPL claim, the requirement comes not
from the fact that every enumerated act is based in “fraud.”
Rather, the requirement stems from the language of the statute
itself.
As explained by the Superior Court in Kern v. Lehigh Valley
Hosp., 108 A.3d 1281 (Pa. Super. 2015), the “belief the
element of justifiable reliance only is a product of fraudulent
conduct” is incorrect. Rather,
the element of justifiable reliance under the UTPCPL is the
product of both (a) the Legislature’s intent not to do away
with traditional elements of reliance and causation under
the UTPCPL, and (b) the express provision under 201-9.2
that requires a private action plaintiff to prove an
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“ascertainable loss … as a result of the use of
employment by any person of a method, act or practice
declared unlawful” under Section 201-3 of the UTPCPL. 73
P.S. § 201-9.2(a) (emphasis added). The element of
justifiable reliance always was a part of private
actions under the statutory language of the UTPCPL.
Id. at 1289-90.
TCD at 21 (some emphasis added). Based on the foregoing reasons, the
trial court did not commit an error of law in determining that Appellees were
not required to prove all of the elements of common law fraud to support
their UTPCPL claims.
Sixteenth, Cutler purports that “the trial court erred in finding that
[Cutler] had engaged in a practice of deceptive conduct in violation of the
[UTPCPL.]” Cutler’s Brief (Second Appeal) at 39. It states that Appellees
“have not proven that [Cutler’s] actions were deceptive, only that there were
issues present in the home in question. There is no evidence that [Cutler] in
fact knew that the home was not built in accordance to applicable standards,
and that the repairs would not work.” Id. at 40. Cutler explains that it was
“under the belief that the home was inspected by the subcontractors and
that all codes were followed in their individual tasks.” Id.
At the outset, it is unclear to us whether Cutler challenges the
sufficiency of the evidence or the weight of the evidence underlying the trial
court’s finding that its conduct was deceptive. In its statement of the issues,
Cutler frames the question as, “Did the trial court commit an error of law
and abuse its discretion in finding that [Cutler] had engaged in a practice of
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deceptive conduct in violation of the [UTPCPL] when the weight of the
evidence did not support such a finding?” Id. at 6 (unnecessary emphasis
and capitalization omitted). Yet, in the argument section of its brief
addressing this issue, Cutler does not develop a weight of the evidence
argument, but rather seems to present a sufficiency argument. See, e.g.,
id. at 40. Thus, we find this issue is waived. See Lackner, 892 A.2d at 29-
30 (“[A]rguments which are not appropriately developed are waived.”)
(citations omitted).
Nevertheless, even if properly developed, we would still consider
Cutler’s challenges to the sufficiency and weight of the evidence here to be
meritless. The trial court explained why it found that Cutler’s
representations regarding the quality of the home were deceptive:
[Appellees] allege that [Cutler] warranted in October, 2002
that:
 [Appellees’] home was constructed “in accordance
with the accepted home building practice of this
locality”[]; and
 Prior to delivery, [Appellees’] Home was inspected by
trained personnel.[26]
The court finds that when [Cutler] made such representations[,]
the statements were false. At trial, [Appellees’] expert, John
Lukowski, testified credibly that the applicable building code in
effect at the time of construction required a minimum three-coat
application of stucco and 7/8 inch thickness. [Cutler’s] expert
conceded that the 1/2 inch stucco placed on [Appellees’] Home
____________________________________________
26
This is the language set forth in Paragraph 3(a), supra.
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did not meet the requirements of the building code then in
effect.
Cutler’s project supervisor and “quality control manager,” Justin
McCarty, who supervised the construction of [Appellees’] Home,
admitted during his testimony that he had little knowledge in
2002 concerning the proper application of stucco and that he did
not know what constituted correct versus incorrect practice. In
its closing arguments, in an apparent effort to distance itself
from this testimony, [Cutler] suggests that the court should
disregard Mr. McCarty’s concession regarding his lack of
knowledge of applicable stucco standards because Cutler utilized
a stucco subcontractor to construct the Home.
The court disagrees that Mr. McCarty’s testimony is not
significant or worthy of its consideration. Any issue that Cutler
may have with the quality of the work performed by one of its
sub-contractors is between those entities and does not affect
what [Appellees] were guaranteed — a home built in accordance
with applicable building standards. Cutler knew it was not in a
position to make that guarantee or later to honor it for that
matter if it had no knowledge of or understanding regarding
those standards. Without that knowledge, it could not ensure
that its agents acted in accordance therewith.
Similarly, Cutler knew it was not in a position to promise an
inspection by its “trained personnel” if in fact they had no such
personnel. Mr. McCarty testified at both phases of the trial that
neither he nor anyone else at Cutler performed inspections at
the Home to ensure that windows, flashing components, or
stucco were installed correctly. As the trial evidence
demonstrated, any inspection by Cutler’s team was not by
“trained” professionals given Mr. McCarty’s concessions that as
the lead construction supervisor onsite, he had no knowledge
regarding how to properly construct a home with a stucco
façade.
Finally, the fact that East Whiteland Township issued a
Certificate of Occupancy for the Home following its inspections,
upon which [Cutler] relies heavily in its defense, does not
change or diminish the above evidence. It simply indicates to
the court that East Whiteland Township did not uncover the code
violations, not that the violations did not exist in the first place.
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TCD at 14-16 (emphasis in original; internal citations omitted).
Further, the trial court discussed, at length, why it determined that
Cutler knew its subsequent repairs would not work based on the evidence at
trial. See id. at 16-19. The trial court found, inter alia, that Cutler
repeatedly cleaned, caulked, and sealed around windows despite knowing
that similar, previous efforts were ineffective; failed to perform any
additional investigation to determine the cause or extent of the water
infiltration; and neglected to follow through with scheduling repair work. Id.
In sum, the trial court explained:
The above history demonstrates that although Cutler may have
attempted the first time to honor its written warranty to
[Appellees], very soon thereafter it was clear to Cutler that
[Appellees’] water problems were caused by more than just a
defective window and would not be cured with “sealing.”
Although it may be true, as [Cutler] argue[s], that repairs to a
home are not a guaranteed science, it is also true that [Cutler]
guaranteed and warranted a home built in accordance with a
certain standard and when presented with evidence of problems
at [Appellees’] Home[,] it failed to determine if that in fact was
the case. Moreover, once notified of the problems, rather than
comply with the terms of the warranty it issued to [Appellees],
Cutler engaged in a series of ineffective, superficial remedies
which failed to provide [Appellees] with the Home they were
promised – one constructed in accordance with accepted home
building practices in the locality. This refusal to honor its
warranty violated the UTPCPL.
Id. at 19-20. Given the ample evidence presented at trial, we would discern
that the trial court did not err in concluding that Cutler’s conduct was
deceptive.
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Seventeenth, Cutler advances that the trial court “erred in refusing to
grant a mistrial when [Appellees] submitted new evidence, ex parte, after
the conclusion of the trial[.]” Cutler’s Brief (Second Appeal) at 45
(unnecessary emphasis and capitalization omitted). Specifically, Cutler
avers that after the close of evidence in the bench trial on the UTPCPL
claims, “Appellees’ Counsel submitted his Findings of Fact/Conclusions of
Law and attached additional documents marked as Exhibit A and Exhibit B
that were not introduced into evidence during the trial.” Id. at 45-46
(citation and emphasis omitted). Cutler states that the trial court should
have granted a new trial as a result.27
We deem this issue waived as Cutler fails to proffer any authority in
support of its argument. We reiterate that “arguments which are not
appropriately developed are waived[,]” and “[a]rguments not appropriately
developed include those where the party has failed to cite any authority in
support of a contention.” See Lackner, 892 A.2d at 29-30 (citations
omitted).
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27
“Our standard for reviewing a trial court’s denial of a mistrial is abuse of
discretion.” Stapas v. Giant Eagle, Inc., 153 A.3d 353, 367 (Pa. Super.
2016) (citation omitted). See also Commonwealth v. Lease, 703 A.2d
506, 508 (Pa. Super. 1997) (“[T]he remedy of a mistrial is an extreme
one.... It is primarily within the trial court’s discretion to determine whether
[the a]ppellant was prejudiced by the event that forms the substance of the
motion. Finally, it must be remembered that a mistrial is required only when
an incident is of such a nature that its unavoidable effect is to deprive the
appellant of a fair and impartial trial.”) (citation omitted).
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In any event though, it would be unclear to us how the evidence at
issue even affected Cutler, let alone prejudiced it. In its order striking
Exhibits A and B attached to Appellees’ Amended Proposed Findings of Fact
and Conclusions of Law and denying Cutler’s request for a mistrial, the trial
court commented:
This matter was fully and effectively litigated by the parties over
the course of five trial days (three days – jury trial; two days –
bench trial). The court does not see the need for the
introduction of new evidence, whether recently discovered or
otherwise, in order to properly decide [Appellees’] UTPCPL claim.
Moreover, the court has not been, and will not be, influenced by
the new documents attached as exhibits to [Appellees’] post-trial
submissions. Concerns about confusion of the issues, prejudice
and so forth are not present here. The court, having been
responsible for this action for years, is well aware of [Appellees’]
claims and arguments regarding water problems in “other”
homes built by [Cutler] and the significance thereof. Likewise, it
is intimately familiar with [Cutler’s] responses and defenses to
these claims. The court does not see the need to re-visit the
issue yet again.
Trial Court Order, dated 2/3/2016, at 1 n.1 (single page). Thus, we would
conclude that the trial court did not abuse its discretion in denying Cutler’s
request for a mistrial, as Cutler does not demonstrate prejudice.
Eighteenth, Cutler alleges that the trial court “committed an error of
law and abuse of discretion in allowing evidence of water damage in other
homes[.]” Cutler’s Brief (Second Appeal) at 48 (unnecessary capitalization
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and emphasis omitted).28 Cutler argues that “[t]he UTPCPL issues in this
case revolve around the sale of [Appellees’] home. The UTPCPL makes it
clear that private causes of action stem from the transaction in question.”
Id. Thus, according to Cutler, “[a]lleged water infiltration in, or repairs to,
other homes that arose many years after the sale of Appellees’ home could
have no probative value to the issue of whether the UTPCPL was violated in
this case.” Id. at 49. Cutler claims it was prejudiced by the introduction of
such evidence and the trial court erred in denying its motion for post-trial
relief on this basis. Id. at 50.
Conversely, in its July 12, 2016 order denying Cutler’s post-trial
motion, the trial court explained:
In addressing [Cutler’s] pre-trial challenge to the introduction of
evidence of “other water damage,” the court in its Order dated
January 6, 2016, wrote:
This disputed evidence is also relevant to the issue of
damages under the UTPCPL. The manner in which [Cutler]
may or may not have deceived or misled [Appellees] will
be relevant if the court finds liability on the part of
[Cutler]. Although the Supreme Court has rejected the
use of a punitive damages standard to determine whether
treble damages are warranted, it has recognized that
____________________________________________
28
“When we review a trial court’s ruling on admission of evidence, we must
acknowledge that decisions on admissibility are within the sound discretion
of the trial court and will not be overturned absent an abuse of discretion or
misapplication of law.” Reott v. Asia Trend, Inc., 7 A.3d 830, 839 (Pa.
Super. 2010) (citation omitted). Further, “for a ruling on evidence to
constitute reversible error, it must have been harmful or prejudicial to the
complaining party. A party suffers prejudice when the trial court’s error
could have affected the verdict.” Id. (citations omitted).
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“courts of original jurisdiction should focus on the presence
of intentional or reckless, wrongful conduct, as to which an
award of treble damages would be consistent with and in
furtherance of the remedial purposes of the UTPCPL.”
Schwartz v. Rockey, … 932 A.2d 885 ([Pa.] 2007).
As for [Cutler’s] claim that the evidence would be unduly
prejudicial, the court disagrees. This claim will be heard
by the court sitting non-jury. Concerns about confusion of
the issues, prejudice and so forth are not present here.
The court as the fact-finder will be able to hear the
evidence presented and will be able to weigh its probative
value and properly consider it only for the purpose for
which it is relevant and presented. See Pa.R.E. 403.
(Order, 1/6/16 at fn. 1)
[Cutler’s] argument post-trial is the same as that it previously
advanced and the court rejected.
Furthermore, although evidence of “other water damage” was
discussed during the non-jury portion of the case, the court did
not rely on such testimony in finding liability on the part of
[Cutler]. In fact, in choosing not to award [Appellees] treble
damages (that aspect of the case where such evidence could
arguably be relevant) the court stated:
Although [Cutler] failed to construct [Appellees’] home as
warranted and failed to determine the source of
[Appellees’] water infiltration as required and warranted,
the court is concerned with what happened to these
[Appellees] and their Home. It rejects [Appellees’]
suggestion that what may have occurred with other
homeowners justifies a recovery by them in form of treble
damages.
([TCD], at 32).
[Cutler] clearly was not harmed by any error in allowing such
testimony.
Trial Court Order Denying Cutler’s Post-Trial Motion, 7/12/2016, at 1 n.1
(emphasis in original).
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In light of the trial court’s explanation, it is apparent that it did not
consider alleged water damage in other homes when finding Cutler to be
liable under the UTPCPL. Instead, the trial court found such testimony
relevant with respect to determining whether it should award treble
damages to Appellees, which Cutler totally ignores in its brief. Further, we
fail to see how Cutler has suffered any prejudice, as it does not show how
the evidence in any way affected the verdict. Accordingly, Cutler has not
convinced us that the trial court abused its discretion in allowing evidence of
water damage in other homes to be admitted at trial.
Last, in its nineteenth issue, Cutler maintains that the trial court “erred
in allowing William Wheatley to provide expert testimony when he was called
as a fact witness and when he was not identified before trial[.]” Cutler’s
Brief (Second Appeal) at 51 (unnecessary emphasis and capitalization
omitted). Cutler claims “[Mr.] Wheatley was never entered as or qualified as
an expert…. He therefore should not have been permitted to testify as an
expert witness, and opine on the construction and testing on other homes
built by [Cutler].” Id. at 52. Further, it avers that “Mr. Wheatley admitted
that he had not inspected Appellees’ home and therefore, the testimony
could have no probative value.” Id.
In spite of Cutler’s assertions, the trial court insists that Mr. Wheatley
provided no expert opinion about the cause of the water infiltration. It
clarified:
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[Cutler] contends that the court erred in allowing William
Wheatley to provide expert testimony at trial when he was called
as a fact witness and never qualified as an expert. In the non-
jury trial, Mr. Wheatley testified about an encounter with Mr.
Cutler during an inspection of other homes suffering from water
damage.
[Cutler] is correct that Mr. Wheatley was called by [Appellees] as
a fact witness. [Appellees] called [Mr.] Wheatley to testify
regarding a conversation he had with Mr. Cutler about water
problems in other homes. He did not offer an expert opinion
about the cause of such problems.
Nonetheless, as noted above, despite the testimony of Mr.
Wheatley, the court made its decisions in this case based upon
what happened to [Appellees’] home and [Cutler] suffered no
harm by this alleged error of court.
Trial Court Order Denying Cutler’s Post-Trial Motion, 7/12/2016, at 1 n.1.
Likewise, Appellees point out that they “called Mr. Wheatley as a
rebuttal witness solely to impeach Mr. Cutler’s testimony that he had no
knowledge, prior to 2002, of defective construction practices in other Cutler-
built, stucco communities.” Appellees’ Brief (Second Appeal) at 71 (citations
omitted). Moreover, according to Appellees, “[a]t no point did [Appellees’]
counsel ask Mr. Wheatley to offer an opinion as to the cause of water
infiltration at Springton Woods or to state whether the items he
communicated to Mr. Cutler fell below acceptable industry standards or
practices.” Id. at 72 (citation omitted). Instead, they claim that their
counsel “asked Mr. Wheatley to testify only as to his personal observations,
and that is exactly what Mr. Wheatley did.” Id. (citation omitted).
Based on our review of the trial transcript, we agree with the trial
court and Appellees that Mr. Wheatley’s testimony consisted of personal
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observations and not expert opinions. See N.T. Trial, 1/15/2016, at 102-
129. Consequently, we discern no abuse of discretion on the part of the trial
court, as Mr. Wheatley testified as a fact witness, not an expert.
Thus, not one of Cutler’s nineteen issues is meritorious, and we affirm
the trial court’s judgment on these grounds.
We now turn to Appellees’ cross-appeal. On appeal, Appellees raise a
single issue for our review:
Did the trial court err as a matter of law and/or abuse its
discretion when it calculated the amount of attorneys’ fees
awarded to [Appellees] by reducing the amount derived from the
lodestar approach by the contingency percentage contained in
[Appellees’] fee agreement?
Appellees’ Brief (First Appeal) at 7. We evaluate this issue for an abuse of
discretion. Boehm, 117 A.3d at 335 (citations omitted). “An abuse of
discretion generally will not be found unless there is a showing of manifest
unreasonableness, or partiality, prejudice, bias, or ill-will, or such lack of
support as to be clearly erroneous.” Krebs, 893 A.2d at 786 (citations and
internal quotation marks omitted).
Before addressing the merits of Appellees’ issue, we must provide
further context regarding the trial court’s award of attorneys’ fees in this
matter. Appellees initially entered into an hourly fee agreement with their
counsel. However, because of high litigation costs, Appellees converted this
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hourly fee agreement into a contingency fee agreement in August 2015.29
As a result, when Appellees first requested attorneys’ fees under the UTPCPL
following the bench trial, the trial court awarded attorneys’ fees to Appellees
in the total amount of $121,938.51. This amount reflected $96,749.51 in
fees incurred by Appellees under their original hourly fee agreement with
their counsel, plus 20% of the hourly fees recorded by Appellees’ counsel
following the change in the parties’ compensation agreement through
January 1, 2016, which amounted to $25,189.38.30 See TCD at 30;
Appellees’ Post-Trial Motion, dated 3/21/2016, at 10 n.4.
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29
Appellees initially retained Fox Rothschild LLP on an hourly basis, and
agreed to pay the costs incurred with such representation. Appellees’ Brief
(First Appeal) at 21 (citations omitted). However, according to Appellees,
Cutler’s conduct … significantly drove up the cost of litigation
such that [Appellees] could not afford to continue paying Fox
Rothschild at an hourly rate. Thus, on August 13, 2015,
[Appellees] and Fox Rothschild entered into an agreement
converting the previous Hourly Agreement to a contingency
agreement (the “Contingency Agreement”). Pursuant to the
Contingency Agreement, [Appellees] agreed to pay Fox
Rothschild as compensation for the remainder of the
representation 20% of all amounts recovered by [Appellees] in
the lawsuit, as well as all costs related to the investigation
and/or prosecution of their claims against Cutler.
Id. at 21-22 (internal citations omitted). See also Cutler’s Brief (First
Appeal) at 30 (explaining that “Appellees’ counsel knowingly and willingly
entered into an agreement with … Appellees to move from an hourly fee to a
contingent fee on August 13, 2015”) (citation omitted).
30
Appellees explain that the amount of $25,189.38 represents “20% of the
total value of the legal services rendered to [Appellees] through January 1,
2016, after [Appellees] converted from the Hourly Agreement to the
(Footnote Continued Next Page)
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Subsequently, in a post-trial motion, Appellees sought supplemental
attorneys’ fees and costs incurred since January 1, 2016. See Trial Court
Order Regarding Appellees’ Post-Trial Motion, 7/12/2016, at 1 (unnumbered
pages). In response, after Appellees submitted relevant legal invoices, the
trial court awarded Appellees attorneys’ fees pursuant to their UTPCPL claim
in the additional amount of $13,254.00 on August 16, 2016. See Trial Court
Order, 8/16/2016, at 1 (unnumbered pages). It explained that it calculated
this amount using the same method as it did in its previous decision, i.e.,
awarding them 20% of the hourly fees recorded by their counsel. Id. at 1
n.2.
Now, on appeal, Appellees assert that “the trial court erred when it
calculated the amount of attorneys’ fees awarded to [Appellees] by reducing
the amount derived from the lodestar approach by the contingency
percentage in [Appellees’] fee agreement with counsel.” Appellees’ Brief
(First Appeal) at 54 (unnecessary capitalization and emphasis omitted). In
particular, Appellees contend that “the trial court’s formula for calculating
the awards of attorneys’ fees creates an inequitable result that (1) does not
further the remedial purposes of the UTPCPL, and (2) violates the settled
_______________________
(Footnote Continued)
Contingency Agreement.” Appellees’ Brief (First Appeal) at 54 (citation
omitted; emphasis in original). See also TCD at 33 (explaining that
$25,189.38 was the product of “$125,189.38 (fees recorded post-
contingency) x .20)”).
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principle that a contingency fee arrangement cannot be used to reduce a fee
award.” Id. at 54-55.31
When awarding attorneys’ fees under the UTPCPL, this Court has
stated:
In a case involving a lawsuit which include[s] claims under the
UTPCPL ... the following factors should be considered when
assessing the reasonableness of counsel fees:
(1) The time and labor required, the novelty and difficulty
of the questions involved and the skill requisite properly to
conduct the case; (2) The customary charges of the
members of the bar for similar services; (3) The amount
involved in the controversy and the benefits resulting to
the clients from the services; and (4) The contingency or
certainty of the compensation.
Boehm, 117 A.3d at 335 (internal citations omitted). Further,
(1) there should be “a sense of proportionality between an
award of damages [under the UTPCPL] and an award of
attorney[s’] fees,” and (2) whether plaintiff has pursued other
theories of recovery in addition to a UTPCPL claim “should [be]
given consideration” in arriving at an appropriate award of fees.
Id. (citations omitted; some brackets in original). We “[do] not mandate a
proportion that would be the limit of acceptability,” but instead “only
suggest[] that there be a ‘sense of proportionality’ between the two
amounts. Nor would it have been appropriate for this Court to fix a
proportionate amount that would define the limit of recoverable fees, since
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31
Cutler did not file a brief in response to Appellees’ cross-appeal.
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the General Assembly specifically chose not to include such a factor in the
statute.” Id. (citations omitted; emphasis in original).
In the case sub judice, the trial court considered the above factors in
determining the reasonableness of Appellees’ attorneys’ fees. With respect
to the first factor concerning time and labor, the trial court found — as
discussed above — that Appellees’ “UTPCPL claims were intertwined with the
non-UTPCPL claims in such a way that separation of those fees would be
difficult.” TCD at 27. Thus, the trial court determined that much of the time
spent in pre-trial litigation pertained to both Appellees’ UTPCPL and common
law claims. See id. (citing Boehm, 117 A.3d at 335). It noted that the
case involved “many complex construction issues and lengthy pretrial
discovery of documents and evidence[,]” along with “highly technical
construction issues which required much expert testimony.” Id. at 28. The
trial court relayed that “much of the complexity and difficulty in the
preparation of the case for trial stemmed from [Cutler’s] refusal to produce
documents in accordance with various orders of this court[,]” and the matter
was further complicated when Cutler “appealed the court’s discovery
sanction order on the eve of trial[.]” Id. In sum, the trial court recognized
that “[n]othing during the life of this litigation was simple. [Cutler] made it
expensive.” Id.
As for the second prong relating to the customary charges of members
of the bar for similar services, the trial court found that the fees charged by
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Appellees’ counsel were “customary and justified.” Id. Third, in terms of
the amount in controversy and the benefits resulting to the clients from the
services, the trial court stated that “[t]here can be no doubt that [Appellees]
benefited from the series [sic] rendered by [their] counsel, having
succeeded on all of [their] common law claims and … UTPCPL claims.” Id. at
29. In response to Cutler’s argument that the fees were disproportionate to
the amount recoverable, the trial court determined that “[a]lthough the
remediation costs were just over $85,000, the potential for treble damages
made the amount in controversy significantly higher.” Id.
Finally, in considering the fourth prong pertaining to the contingency
or certainty of the compensation, the trial court explained:
[Cutler’s] final argument is that an award of attorneys’ fees in
excess of the underlying damages award or which included the
hourly fees charged to [Appellees] after … the arrangement
between [Appellees] and their counsel became a contingent fee
arrangement, would result in a windfall to [Appellees’] counsel.
The court again disagrees.
The fee-shifting statutory provision of the UTPCPL is designed to
promote its purpose of punishing and deterring unfair and
deceptive business practices and to encourage experienced
attorneys to litigate such cases, even where recovery is
uncertain. Boehm, supra; see also Krebs[], 893 A.2d [at]
788 (“[T]hese cases hold generally that where the General
Assembly has departed from the ‘American Rule’ (where each
party is responsible for his or her own attorneys’ fees and costs),
by providing a fee-shifting remedy in a remedial statute, the trial
court’s discretionary award or denial of attorneys’ fees must be
made in a manner consistent with the aims of purposes of that
statute.”). This case is a good example of this principle.
After [Cutler’s] interlocutory appeal of this court’s discovery
order delayed the impending trial and assured additional,
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unforeseen counsel fees related to the appeal, counsel agreed to
finish the case with no guarantee of payment and thus allow
[Appellees] to have their day in court, which prior to the appeal
had been just weeks away. A contingency fee agreement is just
one of many factors for a court to consider when determining the
appropriateness of an award of reasonable attorneys’ fees and
thus “it would be inappropriate to apply a contingency fee
agreement to create a ceiling (or for that matter, a closed door)
on the recovery of attorneys’ fees under a fee-shifting provision
of a remedial statute.” See Kreb[s], supra.
Under [Appellees’] agreement with their counsel, they are
required to pay 20% of any funds recovered as attorneys’ fees.
[Appellees] have already incurred attorneys’ fees totaling
$96,749.51 and are entitled to recover that amount. In addition
to those fees, the court will award 20% of the hourly fees
recorded by [Appellees’] counsel following the change in the
parties compensation agreement, which totals $25,189.38
[$125,946.88 (total fees recorded less fees previously incurred)
x .20]. This award is reasonable in this court’s view when one
considers the total hourly equivalent of counsel for the time
spent [since the contingency agreement took effect].
TCD at 29-30.
It is unclear to us why the trial court decided to calculate attorneys’
fees in this manner. Despite acknowledging that Appellees are required to
pay 20% of any funds recovered under the contingency agreement as
attorneys’ fees (which Appellees say would amount to $46,495.14),32 the
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32
It is ambiguous to us how much money would be due under the
contingency agreement. The August 13, 2015 contingency agreement sets
forth, “In consideration for our services, the Firm shall receive a fee of
twenty percent (20%) of all funds recovered or received by you—
including compensatory and punitive damages.” See Appellees’ Exhibit
61 (emphasis added). As stated above, Appellees state that they would be
obligated to pay $46,495.14 pursuant to the 20% contingency agreement,
although it is uncertain to us how they arrive at this amount. Appellees’
Brief (First Appeal) at 57; see also id. at 53 (“The trial court awarded
(Footnote Continued Next Page)
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trial court awarded Appellees only 20% of the hourly fees recorded by their
counsel following the change in the compensation agreement (which
ultimately totaled $38,443.38 after the trial court issued its supplemental
award on August 16, 2016). Moreover, none of the factors discussed above
support reducing the attorneys’ fees in this way. As Appellees point out, this
is effectively “an 80% discount on Fox Rothschild’s standard hourly rates[,]”
in spite of switching to the contingency agreement in order “to save
[Appellees] from the burden of the Cutler-caused increased cost of the
litigation….” Appellees’ Brief (First Appeal) at 56 (citations omitted).
We recognize that “the UTPCPL allows for the recovery of ‘reasonable’
attorneys’ fees” and was not “intended to provide a claimant, or his
attorney, with a windfall or bonanza should he or she be successful.”
McCauslin, 751 A.2d at 686.33 At the same time, however, we have noted
that “the fee-shifting statutory provision of the UTPCPL is designed to
_______________________
(Footnote Continued)
[Appellees] $317,668.78 in total damages…. [Appellees] must pay Fox
Rothschild $46,495.15 of that amount pursuant to the 20% contingency.”).
Cutler, on the other hand, claims that “Appellees and their attorneys had
agreed upon a 20% contingency fee, meaning that … Appellees would pay
their attorneys 20% of the recovery. The recovery awarded to … Appellees
upon the jury trial was $85,980.94. Pursuant to the contingent fee
agreement[,] 20% of that award equals $17,196.19.” Cutler’s Brief (First
Appeal) at 30-31 (citations omitted).
33
Notably, this Court has previously “found a multiple of 11.5 of UTPCPL
damages to the attorney fee award was not disproportionate.” See Boehm,
117 A.3d at 336 (citing Neal, 882 A.2d at 1031 n.8). Appellees’ attorneys’
fees in this case are not remotely close to that disproportion.
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promote its purpose of punishing and deterring unfair and deceptive
business practices and to encourage experienced attorneys to litigate such
cases, even where recovery is uncertain.” Boehm, 117 A.3d at 336
(citation omitted). In general, “the manner by which attorneys’ fees are
determined in this Commonwealth, under fee-shifting provisions, is the
lodestar approach.” See Krebs, 893 A.2d at 792-93. The lodestar is the
product of “the number of hours reasonably expended on the litigation times
a reasonable hourly rate.” Id. at 790. Additionally, we have found it
“inappropriate to apply a contingency fee agreement to create a ceiling (or
for that matter, a closed door) on the recovery of attorneys’ fees under a
fee-shifting provision of a remedial statute.” Id. Instead, “a contingency
fee agreement is just one of many factors to consider in arriving at an award
of a reasonable attorneys’ fee.” Boehm, 117 A.3d at 337 (citation omitted).
In this case, despite finding that Appellees’ hourly rates were
reasonable and that “nothing during the life of this litigation was simple” due
to Cutler’s uncooperative tactics, the trial court forewent a straightforward
application of the lodestar approach and seemed to place unreasonable
weight on the fact that Appellees had a 20% contingency agreement with
their counsel. See TCD at 28. Consequently, we determine that the trial
court abused its discretion in calculating Appellees’ award of attorneys’ fees
by apparently limiting Appellees’ award of attorneys’ fees based on the
contingency agreement. Consequently, we vacate the trial court’s award of
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attorneys’ fees and remand this matter for a recalculation of such fees under
the lodestar approach.
Judgment affirmed in part, vacated in part, and remanded for
reconsideration of the attorneys’ fee award consistent with this opinion.
Jurisdiction relinquished.
Judgment Entered.
Joseph D. Seletyn, Esq.
Prothonotary
Date: 10/2/2017
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