Francis, J. v. LCP North Third, LLC
293 A.3d 273
Pa. Super. Ct.2023Background
- Francis (through One North Third) owned 115-17 N. Third St.; after defaulting on loans LCP bought related loan documents and the property at sheriff’s sale and the parties entered a Settlement Agreement giving Francis an option to repurchase.
- The Second Omnibus Amendment (Feb. 14, 2018) required LCP to manage/complete construction and acknowledged LCP “desires to complete the construction of the property as promptly as possible” (Section 6); Francis had a time-limited option to purchase (or assign) once LCP received a CO or by June 30, 2018.
- A city stop-work order, contractor disputes, and weather issues affected work; LCP performed limited work and spent $86,520 between Feb–July 2018; many violations remained on July 20, 2018.
- Francis exercised the option June 29, 2018 and scheduled a July 26 closing but did not close because construction/COs were incomplete and LCP withheld requested seller documents; Francis sued for breach of contract/good faith.
- After a non-jury trial the court found LCP breached the implied duty of good faith, awarded Francis $966,126 in damages (appraised value minus option price) and $229,482.56 in attorneys’ fees/costs; LCP’s motions for JNOV/new trial were denied and it appealed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether LCP was entitled to JNOV or a new trial because Francis failed to prove a contractual duty, breach, causation, readiness to close, or damages | Francis: LCP breached implied duty of good faith by deliberately stalling construction, denying documents, refusing extensions, and preventing financing/assignment; damages equal appraised value minus option price | LCP: Section 6 is precatory (no enforceable construction timeline/CO obligation); delays caused by stop-work order/weather; Francis was not ready to close; damages unsupported | Court affirmed: viewing evidence favorably to Francis, record supports breach of implied good faith, causation, and damages; JNOV/new trial denied |
| Whether Francis was entitled to contractual attorneys’ fees | Francis: Fee-shifting clause in the Second Amendment entitles prevailing party to reasonable counsel fees; Francis prevailed | LCP: No breach/no prevailing party, so no fees | Court affirmed fee award: parties contracted for fee-shifting and Francis was the prevailing party |
| Whether the fees award was ancillary under Samuel‑Bassett (Kia Motors) and improperly included in judgment | Francis: Fees may be reduced to judgment; trial court may enter fees as part of final relief | LCP: Under Samuel‑Bassett fees are ancillary and should not have been treated as part of the judgment or double-entered | Court rejected LCP’s argument: Samuel‑Bassett does not prohibit reducing a fee award to judgment; fee award properly reduced and entered |
| Whether the Prothonotary exceeded authority by entering judgment including attorneys’ fees (void ab initio) | Francis: Final court orders awarded damages and fees; praecipe to enter judgment was proper | LCP: Prothonotary exceeded authority (relying on Mother’s Restaurant/Gleit) because entry exceeded clerical powers | Court affirmed prothonotary action: there was a final judicial determination of liability and fee award, so entry of judgment was within authority |
Key Cases Cited
- Somers v. Somers, 613 A.2d 1211 (Pa. Super. 1992) (duty of good faith implied in contract performance)
- Oelschlegel v. Mut. Real Estate Inv. Trust, 633 A.2d 181 (Pa. Super. 1993) (contract damages aim to place non-breaching party where it would have been absent breach)
- Samuel‑Bassett v. Kia Motors America, Inc., 34 A.3d 1 (Pa. 2011) (attorneys’ fees petitions characterized as ancillary; court retains jurisdiction to decide fees)
- Mullen v. Kutz, 985 A.2d 769 (Pa. Super. 2009) (parties may contract to shift attorneys’ fees to prevailing party)
- Bert Co. v. Turk, 257 A.3d 93 (Pa. Super. 2021) (fee‑shifting clauses encompass fees for contractual damages actions)
- Gleit v. Nguyen, 199 A.3d 1240 (Pa. Super. 2018) (prothonotary lacked authority to enter certain orders absent a final judicial determination)
- Carmen Enterprises, Inc. v. Murpenter, LLC, 185 A.3d 380 (Pa. Super. 2018) (discussing appealability of fee orders post-judgment)
- Miller Elec. Co. v. DeWeese, 918 A.2d 114 (Pa. 2007) (procedural guidance on appealability of fee orders)