Telwell Inc. v. Grandbridge Real Estate Capital LLC
143 A.3d 421
Pa. Super. Ct.2016Background
- Telwell obtained a $2.6 million 10-year balloon mortgage from PSERS in 2003; the Note set an 8.5% rate for 60 months then required recalculation based on U.S. Treasury yields.
- Grandbridge (successor to Laureate) serviced the loan from 2007, collecting payments and remitting net proceeds to PSERS while taking a fixed monthly servicing fee.
- After 60 months, Grandbridge continued charging 8.5% interest; Telwell discovered the alleged overcharge when seeking a payoff in 2011, refinanced, and sued PSERS and Grandbridge for breach of contract and several torts.
- Procedural history: trial court transferred contract claims to the Board of Claims (which dismissed for lack of jurisdiction as to PSERS but later returned the claim against Grandbridge to common pleas); the trial court later granted summary judgment to Grandbridge on contract and unjust enrichment theories and earlier sustained a demurrer dismissing tort claims under the gist-of-the-action doctrine.
- On appeal, the Superior Court affirmed summary judgment for lack of a contractual relationship and no unjust enrichment, but reversed the demurrer dismissing tort claims and remanded for further proceedings on fraud and negligent misrepresentation allegations.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Was summary judgment on breach of contract proper where Telwell alleged Grandbridge overcharged interest? | Telwell: genuine issue whether Grandbridge assumed contractual obligations or otherwise undertook personal responsibility for loan terms. | Grandbridge: no evidence it was party to or assignee of the Note; affidavits and loan documents refute contractual relationship. | Held: Summary judgment affirmed — Telwell failed to prove contract or assignment to Grandbridge. |
| Could Telwell recover under unjust enrichment for the overcharged interest? | Telwell: Grandbridge obtained at least a transient benefit and restitution is appropriate; pleadings fairly raised the theory. | Grandbridge: fee was fixed; it promptly remitted overpayments to PSERS and did not retain benefit; claim not pleaded and would be time-barred. | Held: Summary judgment affirmed — no evidence Grandbridge retained an unjust benefit. |
| Was dismissal of tort claims under the gist-of-the-action doctrine proper at the demurrer stage? | Telwell: demurrer was premature; alleged fraudulent and negligent misrepresentations implicate societal duties independent of contract. | Grandbridge: tort claims merely repackaged contract breach; no independent tort duty. | Held: Demurrer reversal — dismissal was premature; fraud and negligent misrepresentation claims survive to be decided on the merits. |
| Did Nanty-Glo bar use of affidavits supporting summary judgment here? | Telwell: entry of summary judgment based on Grandbridge employee affidavits violated Nanty-Glo. | Grandbridge: summary judgment relied on documentary evidence in addition to affidavits, so Nanty-Glo not implicated. | Held: Nanty-Glo inapplicable — trial court properly considered documents and affidavits; genuine no-contract dispute. |
Key Cases Cited
- Gilbert v. Synagro Cent., LLC, 131 A.3d 1 (Pa. 2015) (standard of review for summary judgment and principles on pleadings/review)
- Basile v. H & R Block, Inc., 761 A.2d 1115 (Pa. 2000) (pleading claims in alternative and related procedural principles)
- Bruno v. Erie Ins. Co., 106 A.3d 48 (Pa. 2014) (recent articulation of the gist-of-the-action doctrine and when tort duties are independent of contract)
- Lackner v. Glosser, 892 A.2d 21 (Pa. Super. 2006) (elements required to plead and prove breach of contract)
- Bilt-Rite Contrs., Inc. v. Architectural Studio, 866 A.2d 270 (Pa. 2005) (adoption of Restatement §552 and negligent misrepresentation elements)
- Wilson Area School Dist. v. Skepton, 895 A.2d 1250 (Pa. 2006) (unjust enrichment and restitution principles)
- Bennett v. A.T. Masterpiece Homes at Broadsprings, LLC, 40 A.3d 145 (Pa. Super. 2012) (agent’s voluntary assumption of personal contractual liability via promises)
- Roman Mosaic & Tile Co. v. Vollrath, 313 A.2d 305 (Pa. Super. 1973) (unjust enrichment inapplicable when parties’ relationship is governed by written contract)
- Nanty-Glo v. American Surety Co., 163 A. 523 (Pa. 1932) (courts may not resolve genuine factual disputes by excluding oral testimony; limits on summary disposition)
- Torchia v. Torchia, 499 A.2d 581 (Pa. Super. 1985) (unjust retention of funds as basis for restitution)