ARI Enterprises v. McGinley, C.
1249 WDA 2015
| Pa. Super. Ct. | Nov 17, 2016Background
- ARI Enterprises (buyer) sued Cynthia McGinley, administratrix for John Caiaccia’s estate (seller), for specific performance to compel sale of 147 43rd Street under a March 10, 2015 written Agreement covering two parcels (147 and 144 43rd Streets).
- The Agreement listed a single total purchase price for both parcels with apportioned prices ($50,000 for 147; $34,900 for 144) and acknowledged a $1,000 earnest deposit.
- Appellant sought specific performance only for 147 43rd Street; the Agreement itself covered both parcels.
- Defendant filed preliminary objections arguing (1) the Agreement is an integrated contract for both parcels and Pennsylvania does not permit partial specific performance of an indivisible land contract, and (2) the Agreement was void ab initio because a purported co-owner of 144 43rd Street (William Gialanella) did not sign.
- The trial court sustained the preliminary objections, dismissed the complaint with prejudice, finding the Agreement not severable and void as to 144 43rd Street; appellant appealed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the Agreement is severable/divisible so plaintiff may seek specific performance for 147 43rd only | Agreement apportions prices to each parcel; sale of 147 is divisible and enforceable alone | Agreement covers both parcels as a single integrated sale; plaintiff seeks impermissible partial specific performance | Trial court erred sustaining demurrer; appellate court vacated and remanded because four-corners and pleadings do not show severability question free of doubt |
| Whether the Agreement is void ab initio because a co-owner of 144 43rd Street did not sign | Even if 144 is problematic, a divisible contract allows one part (147) to be enforceable; ownership of 144 irrelevant to claim for 147 | Absence of co-owner’s signature renders entire agreement void | Appellate court held that if contract is divisible, one part can be valid even if other part is void; trial court should not have dismissed at pleading stage |
| Whether the trial court may resolve severability on preliminary objections (demurrer) | Severability requires factual inquiry beyond four-corners here; demurrer inappropriate | Argues contract language supports indivisibility | Court: determination of intent/severability may require facts outside pleading; sustaining demurrer was abuse of discretion |
| Whether remand was needed to consider newly discovered deed evidence showing Defendant sole owner of 144 | Appellant asked remand to introduce deed recorded after trial court dismissal showing Defendant sole owner at time of agreement | Defendant had argued co-ownership; trial court relied on that | Appellate court denied petition for remand as moot because it vacated trial court’s order and remanded case for further proceedings on the merits |
Key Cases Cited
- Murphy v. Duquesne Univ. of the Holy Ghost, 777 A.2d 418 (Pa. 2001) (contract interpretation: give effect to parties’ intent; ambiguity permits extrinsic evidence)
- Jacobs v. CNG Transmission Corp., 772 A.2d 445 (Pa. 2001) (severability: absent express language, court may examine contract as whole, consideration, and surrounding circumstances to determine intent)
- Jones v. Gravity Fill Serv. Station, 64 A.2d 490 (Pa. 1949) (partial specific performance not permitted for indivisible land contracts)
- Barb-Lee Mobile Frame Co. v. Hoot, 206 A.2d 59 (Pa. 1965) (if contract is divisible, one part may be void while other remains enforceable)
- Brown v. Exeter Mach. Works, 60 Pa. Super. 365 (Pa. Super. 1915) (apportioned price to items indicates severability)
- Lugo v. Farmers Pride, Inc., 967 A.2d 963 (Pa. Super. 2009) (standard for preliminary objections / demurrer)
- Griffin v. Rent-A-Center, Inc., 843 A.2d 393 (Pa. Super. 2004) (preliminary objections may be sustained only when pleadings show with certainty no recovery is possible)
- Cmty. Coll. of Beaver County v. Cmty. Coll. of Beaver County, Soc. of the Faculty (PSEA/NEA), 375 A.2d 1267 (Pa. 1977) (ambiguity in written instrument presents factual question for finder of fact)