Crummer v. Berkman

SPAETH, President Judge:

This is an appeal from judgment entered in an assumpsit action. The case arises from the breach of a contract by which appellant and her husband agreed to buy, and appellees to sell, a house for $225,000. N.T. 18-20. Appellees brought this action to recover their losses when they had to sell the house to someone else because appellants did not settle. Appellant and her husband counterclaimed to recover their deposit money and defended against appellees’ complaint by alleging that appellees fraudulently induced them to sign the agreement of sale. The trial court directed a verdict as to liability in appellees’ favor, entered a non-suit on the counterclaim, and submitted the case to the jury to calculate damages. The jury awarded damages of $47,634.25 and $19,750 in interest. Judgment was entered and this appeal followed. We reverse and remand for a new trial.

Because the trial court directed a verdict for appellees and entered a non-suit on the counterclaim, we must view the evidence in the light most favorable to appellant. Lamp v. Pennsylvania Railroad Co., 305 Pa. 520, 158 A. 269 (1931). So viewed, the evidence was as follows.

On June 16, 1978, before the parties entered into their contract, appellee Richard Crummer represented to appellant and her husband that he was a director of a real estate business called National Apartment Leasing, but he did not disclose that as director, his duties were the supervision of maintenance. N.T. 31, 120. He then offered to assist appellant and her husband in writing an advertisement to sell their house and, after touring their house, told appellants that they would have no trouble selling it for $235,000. N.T. 122-24. Appellant and her husband asked whether they could make their contract of sale contingent upon selling their own house, but appellee did not agree to this. N.T. 125. As it happened, appellant and her husband were not able to sell their house before the date set by the contract for settlement and as a result, they breached the contract.

Viewed in the light most favorable to appellant, the jury might have found as follows: Appellee Richard Crummer held himself out to be an expert in real estate, when he was not; he assured appellant and her husband that they could sell their own house for a price equal to the contract price, although he had no basis for those assurances; relying on his assurances as an expert, appellant and her husband did not insist upon making the sale contingent on the sale of their own house. Had the jury so found, it might have returned a verdict against appellees, and for appellant and her husband on their counterclaim. For when a party is induced to enter into a transaction with another by means of fraud or misrepresentation, the transaction may be avoided by the innocent party. See DeJoseph v. Zambelli, 392 Pa. 24, 139 A.2d 644, 647 (1958); (per curiam affirmance of conclusions of law and findings of fact of trial court set out at 392 Pa. 24, 139 A.2d 644); Clement Martin Inc. v. Gussey, 191 Pa.Super. 464, 468-69, 157 A.2d 412, 415 (1960). Accordingly, neither the directed verdict nor the non-suit should have been entered.

We also conclude that a new trial should be granted because the trial court did not allow appellant to testify about appellees’ representations and struck evidence that appellees misrepresented the condition of the driveway. The testimony was not excludible as parol evidence, for it tended to prove appellees’ fraud in inducing the agreement. See Greenwood v. Kadoich, 239 Pa.Super. 372, 357 A.2d 604 (1976)1 The evidence as to the condition of the driveway should not have been stricken, for it tended to prove a knowingly' false representation that induced appellant and her husband to agree to a given price. “Fraud arises where the misrepresentation is knowingly false [and] renders a transaction voidable even where the misrepresentation is not material.” See DeJoseph v. Zambelli, supra; 392 Pa. 24, 139 A.2d at 647; Clement Martin Inc. v. Gussey, supra; See also, Restatement 2d, Contracts § 164 (fraudulent or material misrepresentation makes contract voidable).

Appellant also argues that the trial court erred in instructing the jury as to the rate at which the jury could add interest to the damage award. The jury awarded interest at a rate equal to 41% of the damage award for the four years, between the breach and their verdict. If interest had been awarded at the legal rate of 6% per year, see 42 Pa.C.S. § |8101, the amount of interest would have been only 24% jof the award. On remand, the jury should be instructed, that the prevailing party should be awarded interest at the maximum legal rate of 6% per year. Judgment vacated and case remanded for new trial.¹

OLSZEWSKI, J., files a concurring and dissenting opinion.

1 . In the hope that judicial economy will be served, we shall discuss appellant’s other arguments.

The first of these is that the trial court erred in excluding evidence that a power of attorney given by appellee Richard Crummer to his business partner had been notarized on a date other than the one on which appellee claimed. The trial court noted that a power of attorney need not be notarized and held that the evidence was “not material to any issue in this case.” Slip opinion of trial court at 6. Appellant is correct that the falsity of the power of attorney would have been relevant to appellee's credibility; however, on retrial the issue may arise whether the trial court may nevertheless properly exclude the evidence as an attempt to use extrinsic evidence of a collateral matter to impeach appellee. See Commonwealth v. Boggio, 204 Pa.Super. 434, 438, 205 A.2d 694, 695 (1964).

Appellant also argues that the trial court erred in admitting into evidence bills for landscaping, security and snow removal services; in appellant’s view, these were hearsay. We think the error, if any, was harmless since there was simultaneous testimony that such services were provided and of their cost. See N.T. 73-80. Related to this argument is appellant’s argument that the trial court erred when it would not allow rebuttal testimony that the bills for security services were too high. The trial court took judicial notice that the $200 monthly charge was reasonable and refused to allow the witness to testify. Slip opinion of trial court at 7. The admission or rejection of rebuttal evidence is within the discretion of the trial court. Mapp v. Dube, 330 Pa.Super. 284, 479 A.2d 553 (1984). We cannot say that the trial court abused its discretion here.

Appellant's argument that the trial court erred in not admitting evidence of attempts to mitigate damages has no merit. That evidence was admitted. See N.T. 127-134.