Krishnan v. Cutler Group, Inc.
171 A.3d 856
Pa. Super. Ct.2017Background
- Arun Krishnan and Aruna Narayanan purchased a Cutler-built home (2002) and later discovered chronic water infiltration and construction defects in the stucco, windows, flashing, and substrate leading to remediation costs (~$85,981).
- Plaintiffs sued Cutler for breach of contract, breach of express and implied warranties, and violations of the UTPCPL; jury awarded plaintiffs on common-law claims and the court (bench) found UTPCPL liability, awarding damages, costs, and attorneys’ fees.
- Significant pretrial discovery disputes: court imposed sanctions and adverse inference for Cutler’s incomplete production; Cutler unsuccessfully appealed that sanctions order on the eve of trial.
- After jury and bench phases, trial court awarded prejudgment interest and attorneys’ fees (including some expert fees); parties litigated several post-trial motions and fee calculations.
- Cutler appealed on numerous grounds (19 issues); plaintiffs cross-appealed the methodology used to calculate attorneys’ fees (trial court had discounted part of the lodestar based on a 20% contingency agreement).
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Award of attorneys’ fees under UTPCPL — separability of UTPCPL vs non-UTPCPL time | Fees relate to common core facts; separation impractical so full reasonable fees tied to UTPCPL are recoverable | Only fees attributable to UTPCPL work should be awarded; trial court should discount | Court: No abuse of discretion in refusing to heavily discount fees where claims intertwined; but remanded because trial court improperly reduced lodestar by contingency percentage — award vacated for recalculation under lodestar. |
| Recovery of expert fees under UTPCPL | Expert work (Lukowski) assisted UTPCPL proof; expert fees reasonable and recoverable as costs | No automatic right to expert fees; expert primarily testified on non-UTPCPL claims | Court: Expert fees may be awarded where reasonable and connected to UTPCPL claims; trial court did not abuse discretion in awarding them. |
| Prejudgment interest (Restatement §354) | Damages (cost to remediate defective performance) were ascertainable from market proposals — interest as of right; alternatively discretionary interest appropriate | Damages were unliquidated consequential losses; plaintiffs were never out-of-pocket due to breach | Court: Prejudgment interest properly awarded as of right under §354(1) (remediation costs ascertainable); even if discretionary, award was reasonable. |
| Effect of written warranty, parol evidence, reliance, and UTPCPL liability | Warranty language (Paragraph 3(a)) is not temporally limited; plaintiffs justifiably relied on warranty and on post-sale warranty-related conduct; parol rule inapplicable to post-sale conduct | Warranty terms limited express and implied warranties to one/two years; parol evidence/ integration clause bars reliance on extraneous representations; UTPCPL claims time-barred or require full common-law fraud proof | Court: Paragraph 3(a) not time-limited; parol rule did not bar reliance on post-sale warranty or warranty itself; claims timely (limitations triggered by failure to honor warranty, not sale date); plaintiffs proved justifiable reliance — UTPCPL liability stands without proving all elements of common-law fraud. |
| Admission of other-homes evidence and Wheatley testimony | Evidence of problems in other Cutler communities relevant to pattern, treble-damage inquiry, and credibility; Wheatley was a fact witness | Evidence prejudicial and irrelevant to transaction; Wheatley was unqualified as expert and should not testify about other homes | Court: Admission of other-homes evidence was within discretion and not shown to prejudice Cutler; Wheatley testified as fact witness (no expert opinion) and rulings were proper. |
Key Cases Cited
- Boehm v. Riversource Life Ins. Co., 117 A.3d 308 (Pa. Super. 2015) (standards for awarding UTPCPL attorneys’ fees and consideration of intertwined claims)
- Neal v. Bavarian Motors, Inc., 882 A.2d 1022 (Pa. Super. 2005) (fee awards under UTPCPL must exclude effort for non-UTPCPL claims; expert fee discussion)
- Cresci Const. Servs., Inc. v. Martin, 64 A.3d 254 (Pa. Super. 2013) (application of Restatement §354 to prejudgment interest; liquidated vs. discretionary interest)
- Yocca v. Pittsburgh Steelers Sports, Inc., 854 A.2d 425 (Pa. 2004) (parol evidence rule and UTPCPL reliance requirement)
- Toy v. Metropolitan Life Ins. Co., 928 A.2d 186 (Pa. 2007) (UTPCPL reliance element — limited to justifiable reliance, not every common-law fraud element)
- Krebs v. United Refining Co. of Pennsylvania, 893 A.2d 776 (Pa. Super. 2006) (contingency fee agreements should not cap fee-shifting awards under remedial statutes; lodestar approach discussion)
- McCauslin v. Reliance Fin. Co., 751 A.2d 683 (Pa. Super. 2000) (UTPCPL fee-shifting remedial purposes and making claimant whole)
- Schwartz v. Rockey, 932 A.2d 885 (Pa. 2007) (focus on wrongful or reckless conduct when considering treble damages under UTPCPL)
- Ecksel v. Orleans Const. Co., 519 A.2d 1021 (Pa. Super. 1987) (implied warranty of habitability and examples when breach exists)