47 Pa. D. & C.5th 423
Pennsylvania Court of Common P...2015Background
- Plaintiff Northeastern Pennsylvania Council, Boy Scouts of America, seeks summary judgment to set aside a subordination agreement related to a tax-sale property in Moosic, PA.
- A 2003 sale agreement with Petroleum Services LLC prompted financing and a board resolution authorizing execution of documents for the sale and financing.
- December 22, 2003 mortgage of $575,000 and September 30, 2004 subordination of defendant’s $2,097,000 mortgage placed defendant in senior lien position.
- January 2006: Petroleum Services refinanced; 2006 subordination restored priority to defendant; the 2006 subordination agreement was signed by plaintiff’s president Bryan Fisk.
- February 2010 to March 2010: Lackawanna County initiated tax sale proceedings; the sale concluded with defendant as the successful bidder for $700,000.
- February 2015: Plaintiff moved for summary judgment to set aside the subordination; the court denied the motion after considering arguments on consideration and authority.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Lack of consideration for the subordination | Plaintiff contends no consideration or benefit exists for subordination and UWOA does not apply. | Defendant argues consideration exists and the agreement provides ‘One Dollar and other good and valuable consideration’ with anticipated project benefits. | No; the court found evidence supporting consideration and rejected lack-of-consideration as a basis to grant summary judgment. |
| Authority of Fisk to bind plaintiff to the subordination | Fisk lacked authority beyond authorizing documents for the Petroleum Services sale and initial mortgage. | Resolution broadly authorized the Council President and Secretary to execute documents necessary to effectuate financing; Fisk and Rogers believed they had authority; apparent/estoppel theories possible. | No; genuine issues of material fact remain about Fisk’s authority, so summary judgment on authority is denied. |
Key Cases Cited
- A.S. v. Office for Dispute Resolution (Quakertown Cmty. Sch. Dist.), 88 A.3d 256 (Pa. Commw. Ct. 2014) (consideration not always required; dispute resolution context)
- Weavertown Transp. Leasing, Inc. v. Moran, 834 A.2d 1169 (Pa. Super. Ct. 2003) (consideration and contract elements precede enforceability)
- Stelmack v. Glen Alden Coal Co., 14 A.2d 127 (Pa. 1940) (detriment must be quid pro quo for enforceable consideration)
- Kay v. Kay, 334 A.2d 585 (Pa. 1975) (language stating intent to be bound can affect enforceability under UWOA)
- Rekas v. Dopkavich, 66 A.2d 230 (Pa. 1949) (signing under certain language may satisfy UWOA intent requirement)
- InterDigital Commc’ns Corp. v. Fed. Ins. Co., 392 F. Supp. 2d 707 (E.D. Pa. 2005) (additional express statement can indicate intent to be bound)
- Bolus v. United Penn Bank, 363 Pa. Super. 247 (Pa. Super. Ct. 1987) (apparent authority considerations and diligence of third party)
- Turner Hydraulics, Inc. v. Susquehanna Constr. Corp., 414 Pa. Super. 130 (Pa. Super. Ct. 1992) (agency questions are questions of fact for the trier)
- Joyner v. Harleysville Insurance Co., 393 Pa. Super. 386 (Pa. Super. Ct. 1990) (agency authority concepts and related considerations)
- Walton v. Johnson, 66 A.3d 782 (Pa. Super. Ct. 2013) (types of agency authority: express, implied, apparent, estoppel)