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Youndt v. First National Bank of Port Allegany
868 A.2d 539
Pa. Super. Ct.
2005
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*1 and Kevin West Ronda YOUNDT d/b/a Lodge, Appellants,

Pike Motor BANK OF PORT

FIRST NATIONAL Country and North Real

ALLEGANY Roy Realty, Hartman Inc.

Estate a/k/a Knight, Appellees.

and Connie M. Pennsylvania. Court of

Superior

Argued Sept. 2004.

Filed Feb.

defendants’, First National Bank of Port Country Estate, Allegany, North Real Knight (Appellees), Connie M. objections Amended Com- for fraud plaint arising in their action a commercial real estate transaction. Ap- pellants properly pled claim that on an claim for fraud based affirmative a failure to misrepresentation and disclose fact, notwithstanding an a material inte- sale, contract for gration clause *4 therefore, erred in granting the trial court objections in Appellees’ preliminary following For the nature of a demurrer. reasons, we affirm.

¶ case, Appellants 2 In this filed a preliminary Complaint Appellees and filed objections. Appellants then filed Complaint, again Appellees and Amended objections in the nature filed demurrer, grant of a which the trial court a trial court’s order reviewing ed. When objections in granting preliminary the na demurrer, court appellate ture of a “an employed by applies the same standard the trial material facts set forth court: all in as all inferences complaint as well are reasonably deducible therefrom admit of review.” purposes ted as true for Smith, Coudersport, appel- Jarett R. for Co., Encompass Vosk v. Ins. lants. (Pa.Super.2004). Glassmire, Coudersport, Daniel F. for ¶ Appel- Complaint, 3 In Amended Knight Country, appellees. and North monetary damages lants excess seek Alfieri, Eldred, for First Na- Michael $50,000 following facts.1 allege and tional, appellee. parcel First National Bank owned estate known as JOYCE, commercial real West and BEFORE: BENDER The bank hired North BOWES, Lodge. Pike Motor JJ. (jountry property, to sell the Real Estate BENDER, BY OPINION J.: agent Knight was the who Connie M. ¶ Country Youndt acted on behalf North Real (Appel- Ronda and Kevin lants) appeal granting from the order the Estate. pursuing property. Appellants We sale of the note of the contract for the claim for rescission 17, 2001, Appellants’ Amended July Appel- about On or April allege into on to goes National Bank entered

lants and First after months eight for sale of the approximately a written “they at- discovered Appellants bought property, (Agreement). property run-off and consisting to their copy stagnant tached a of the water prop- Agreement, portion of the Complaint. sewage Amended on the eastern contains only length, Appellees pages which is two averred erty.” Appellants on the space “Special fraudulently entitled Clauses” failed “intentionally heading are five page. prob- first Under this and severe significant disclose [this] C states typewritten system.” clauses. Clause sewage with the water lem Pipes to shall warrant Water they “request- the “Seller alleged that Appellants also “Buy- D Clause states Motel Units.” Connie M. from Defendant ed disclosure Buying Property as is Condition.” er is any potential problems Knight regarding page Agreement, On the second aforementioned [the] “Representa- is entitled paragraph final that there were that Defendant indicated print: in bold tions” and states affirmative This is the problems.” no Buyer in- It is understood that has by Appellants. averred misrepresentation hereby spected property, or waives Furthermore, do not build *5 right agreed do and has to the to so again averment and do mention this inspec- purchase it as a result of such the Amended throughout the remainder of in and not because of or reliance tion Complaint. by any representation the ¶ Rather, claim base their Appellants any officer, partner other or Seller alleged “intentional Appellees’ fraud on Seller, by any Agent, employee of to disclose” which and fraudulent failure Subagent, salespeople em- misrep- they claim constituted “material ployees, partners. officers and/or Thus, Amended Com- the resentation.” print in paragraph regular continues that “Defendants allege on to plaint goes Appellants purchas- states have known about knew or should “in

ing present its condition and Defen- and sewer defects latent water It specified unless otherwise herein.” con- latent duty to disclose such dants had integration cludes with an clause of the to commencement prior defects states: Appellees claimed that Appellants sale.” It is further understood that this by to disclose duty “failing] violated this agree- agreement contains the whole de- system and sewer the latent water Buyer and the ment between the Seller alleged Appellants And fects.” terms, no other obli- and there are “intentional justifiably Appellees’ on relied covenants, gations, representations, Ap- failure to disclose” and fraudulent conditions, oral or other- statements or pellants’ detriment.2 concerning kind wise whatsoever ¶7 filed Appellees Furthermore, this this sale. in the nature of demurrer altered, amended, objections changed

shall not be matter of law claimed that as a writing executed which except or modified state a cause had failed to Appellants parties. pipes to the motel. of the water allege any dition Appellants do not breach regarding warranty the con- in the ultimately action for fraud because under the facts of inure to the defendant’s bene- case, fit, precluded by this such a claim was thus irrelevant on demurrer. integration “as is” and clauses Plater-Zyberk, Werner Agreement. granted The trial court (citations (Pa.Super.2002) and quota- preliminary objections and dismissed the omitted). tion marks Complaint. Appellants Amended then presented 8 In the second issue brought appeal raising this the following review, for our claim question forour review: alleged misrepresentation oral Defen I. Trial Did the Court err' as a matter Knight dant would be admissible under a in granting pre- law the defendants’ n parol exception evidence rule. For liminary objections in the of a natüre reasons, separate two conclude that we complaint demurrer reference to a Appellants are not entitled relief on this arising from the sale of real estate via a First, claim. we conclude containing contract an inspection/inte- vague too fraudulent statement is with gration clause: stand a demurrer and that the Amended plaintiff alleged A. an in- Where a cause of Complaint fails to state action tentional and fraudulent nondisclosure arising misrep for fraud from the septic sys- seller of defect in the [a] Second, alternatively, resentation. tem that is both latent and material? evidence rule conclude that B. Where the oral affirmative mis- applicable to the facts representation by the realtor would be therefore, Appellants’, it defeats claim as a admissible under LeDonne “real es- matter of law. inspection” tate exception exclusionary rule? ¶ “Pennsylvania fact-plead is á *6 ing jurisdiction. complaint A múst there at Appellant Brief for 7. For the sake of only give fore not the defendant notice of clarity we shall address these issues in plaintiffs’ claim is and the what reverse order. We further note our stan- rests, it but it must grounds upon which reviewing dard for a trial court’s order by summarizing also formulate the issues granting objections and dis- the claim.” support those facts essential to missing complaint: a Kelshaw, 1, Pa.Super. 417 611 Sevin v. affirmance of the trial court’s Where omitted). (1992) (citations 1232, A.2d 1235 objections sustaining preliminary order protect against “In order to those whom would result in the dismissal of an ac- may generalized unsupported fraud be tion, may do the case is so when levied, Pennsylvania Rules of Civil clear and free from doubt. require Procedure that fraud be averred To clear and be free doubt Presbyterian Med. particularity.” with appropriate, appear dismissal is it must (Pa.Su Budd, 1066, Cen. v. 832 A.2d 1072 certainty that not the law would omitted). per.2003) (quotation marks See permit recovery by plaintiff upon 1019(b). also Pa.R.C.P. Any facts averred. re- doubt should be objec- impossible pre- solved a refusal to sustain the it is to establish While degree partic- trial cise as to of tions. We review the court’s deci- standards situation, ularity required given of or an in a two sion for abuse discretion The always error of law. A demurrer tests the suf- conditions must be met. ficiency challenged pleadings. pleadings adequately explain Fact- must defenses, opposing par- might based even nature of the claim to the those which

545 1029, Gibson, 811 A.2d v. him to a Blumenstock permit prepare ty so as (citations quota- (Pa.Super.2002) 1034 sufficient must be defense omitted). specific ele- The tion marks the court that averments convince follows: fraud are as ments of merely subterfuge. (1) representation; Kelshaw, Bata v. (quoting A.2d at 1235 (2) to the transaction material which is Philadel National Bank Central-Penn hand; at 174, 373, Pa. 224 A.2d phia, 423 (1966)). (3) knowledge of its falsely, with to whether falsity or recklessness as above, Appellants’ 10 As stated false; true or in Amended averred (4) misleading another intent of with the to the con Knight of Defendant as quired it; relying into on “indi and that she dition (5) misrepre- justifiable reliance on the problems.” there were no cated that sentation; and not state how Defendant averment does i.e., (6) resulting injury proximately problems, that there were no indicated statement, ges the reliance. whether it was an caused oral However, action. ture or some other 882, 193, Ernst, 647 A.2d 538 Pa. Gibbs v. must set forth very “[pjlaintiff least a (1994). plaintiff or actions the exact statements Pennsylvania Rules 12 Pursuant misrepre alleges constitute the fraudulent aforementioned Procedure and the Civil Valloti, sentations.” McGinn law, required Appellants were case (1987). 732, 734 Pa.Super. particu- of these elements with plead each Org. v. Health Maint. See also McClellan of action for to state a cause larity order Pennsylvania, Pa.Super. al- Knight’s from Defendant arising fraud 1053, 1059 failure A.2d They did not. misrepresentation. leged minimum renders their to meet this bare Instead, once and then they mention it arising from claim for fraud Defendant alleged failure to dis- solely on the focus alleged misrepresentation insuffi Knight’s law, as a matter of Consequently, close. cient as a matter of law. adequately plead faded to *7 arising from the for fraud cause of action Furthermore, following 11 by Defendant misrepresentation alleged fraudulent the averment Knight. the Amended representation, completely. it abandons Second, alternatively, prop transactions, conclude that arises we. to In real fraud estate were fraud, would none for erly pled a mis- claim knowingly makes when seller the circum that under conclude undertakes a conceal- theless representation; case, evidence deceive, parol of this the or stances calculated to commits ment the the claim because rule would defeat failure to disclose. Fraud non-privileged the introduction evidence any- rule would bar to describe generic is a term used Knight’s alleged mis deceive, Defendant by regarding whether' thing calculated to an parties the combination, “Where by suppres- representations. or or single act final and writing as the adopt a truth, agreement is suggestion or of what sion agreement, of their complete expression false, by falsehood it be direct whether rep oral silence, contemporaneous innuendo, alleged prior or by speech or or concerning agreements or mouth, gesture. resentations or look or word of n subjects specifically that are covered A.2d at 437. In this Appellants are in merged the 'written contract are or su- alleging that the contained by that perseded contract.” Blumenstock incorrect terms or that missing Gibson, 1029, (Pa.Su- 811 A.2d parties Thus, terms to which the agreed. per.2002). the foregoing exception parol the evi- in apply dence rule does not the instant parties, any

Where the fraud without mistake, case. deliberately put or engagements in the writing, law declares ¶ However, Appellants are best, writing the to be not the but inducement, in alleging parol fraud the only, the agreement. evidence of them prove evidence is admissible to such a All preliminary negotiations, conversa- claim under certain circumstances. In a agreements merged tions and verbal inducement, party case of fraud in the “the in subsequent superseded proffering prior rep evidence of additional fraud, ... written contract and unless rep resentations does not contend that the averred, accident or mistake be the writ- were omitted from the resentations writ ing agreement constitutes the between but, rather, agreement, ten claims parties, and its and agree- terms representations fraudulently

ments cannot be added to nor subtract- and that ‘but for them’ he would never by parol ed from evidence. agreement.” have entered into the Blu menstock, A.2d at 1036. In such a writing Once is determined to be the cases, contract, parties’ parol entire evi- theory that since in- holds fraud applies dence rule and evidence of agreement, agree- duced the no valid previous negotiations oral or written being parol ment came into agreements involving subject the same is admissible show that always matter as the contract is almost Nevertheless, void. explain vary inadmissible to clearly that a case law holds terms of the contract. justifiably rely upon prior cannot oral Inc., Pittsburgh Sports, Yocca v. Steelers representations yet sign a de- contract 578 Pa. nying represen- of those existence ¶ 14 Whether evidence is tations. in a claim fraud proving admissible for (citation omitted) added). (emphasis Id. initially depends on the nature of the al Thus, inducement, a case of fraud leged exception fraud. One parol evidence is inadmissible where applies evidence rule for cases of fraud contains, deny contract the exis- terms party proffer the execution which “the regarding tence of. *8 that ing the evidence contends he executed subject matter of the fraud. But agreement he defrauded because when the contract contains no such term by being led to believe that the document denying representa- the existence of such actually contained that were omitted terms tions, parol evidence is admissible show Blumenstock, therefrom.” 811 A.2d at fraud in the inducement. cases, “parol may 1036. In such evidence ¶ However, Blumenstock, vary in rec- writing be introduced to a meant to ognized exception parol contract an evidence parties’ be the entire where party applicable avers that a term was omitted from rule that is sometimes in claims Yocca, arising the contract of fraud.” 854 for fraud the inducement because prem- plaintiffs leased at 103. The the con- Id. transactions even when real estate defendant, defaulted six but from the integration an clause: ises tract contains defendant Eventually, the later. months general formula- exception An collect the assets to plaintiffs’ sold parol evidence impact tion of the of the rent. unpaid created and followed rule has been inspection ‘real estate the so-called ¶ brought then plaintiffs 19 The Kessler, i.e., cases,’ v. LeDonne damages stem- alleging fraud action for (1978), and 280, 389 A.2d 1123 Pa.Super. factors, all ultimate- but ming from several progeny. its “the fact that ly caused involves LeDonne line of The cases not, represented, as premises rented for the sale of real agreements written in the Id. As intended use.” fit for the residential, always almost property, use, prelim- filed the defendant case before Despite integration clauses. contain of a demur- objection’sin the nature inary clauses, Pennsylvania integration these rer, granted. the trial court which evi- permitted courts sometimes have ¶ its anal- began Court Supreme 20 The ad- of oral be dence specifically by noting that the lease ysis mitted. premises of the the condition addressed (citation

Blumenstock, agreement full and that the lease was omitted). parties. particularly, More between the ¶ ar- 17 In the instant could classi- contained what be the lease exception should gue that LeDonne clause that stated: fied as an “as is” apply permit the introduction of (the are the tenants who parties Second Knight’s in the form of Defendant evidence agree and as covenant present plaintiffs) alleged misrepresentation. disagree. We and they That have examined follows: ad- ago, Supreme 18 Years our Court the condition of are familiar claim viability plaintiffs dressed the of a thereon, buildings premises for fraud in the context of real estate good order the same are received contract contained transaction where the warranty as to the condition without integration an clause and another clause first by the repair thereof condition stating “warranty that there is no as to the for their intended use. premises. See repair” condition omitted). (quotation marks Id. at 103-04 Co., 375 Pa. Bardwell Willis integration contained The lease also Bardwell, A.2d In stated, lease “This clause that complaint sounding plaintiffs filed agree- entire contract contains the they alleged fraud which at 104 parties.” Id. between the ment from the defen- sought to lease omitted). marks (quotation The bottling plant. root dant for a beer the trial court held that 21 The Court informed the plaintiffs alleged objec- granted properly that the busi- representatives defendant’s complaint because dismissed tions and drainage required ample water and ness any evi- rule barred electrical and along with certain capacity prior statements regarding dence during an in- facilities and heating sage agents. Court’s the defendant’s premises, the defendant’s spection of *9 follows: reasoning was as fraudu- “falsely, intentionally and agents contempo- alleged prior or Where property that the lently’ represented agree- or representations raneous oral plaintiffs’ requirements. for the suitable subject specifi- specifically ments concern which is where the contract states that contract, cally dealt in the plaintiff agreed written that no represen- such made, and the written contract or pur- covers tations were would render the lan- ports agreement to cover the entire of guage superfluous. of the contract parties, clearly the law is now is inserting What the use of such fraud, well settled that in the absence in agreements clauses if par- one of the accident or mistake the oral rep- permitted prove by ties thereto is oral agreements resentations or merged testimony that he didn’t examine and superseded by or subsequent premises wasn’t familiar with the or contract, written parol evidence to condition, they or that would not vary, modify supersede or the written plaintiffs meet the standards which re- contract is inadmissible evidence. quire? by plain- There is no averment tiffs that these clauses in the lease were slightest

There is not the that if doubt fraud, by mistake; inserted accident or plaintiffs merely falsity had averred (we repeat) any representation or representations, parol oral fraud, by was omitted accident or mis- evidence thereof have inad- would been take; or that the lease did not contain missible. Does the fact that plaintiffs agreement entire contract and be- further averred that repre- these oral parties. Merely bringing tween the sentations were fraudulently made with- trespass action in for deceit instead of in out averring they were fraudulent- assumpsit for breach of contract will not ly by or accident or mistake omitted suffice to circumvent the from the subsequent complete written plaintiffs rule. If relied on under- contract testimony suffice to make the standing, promises, representations or admissible? The ques- answer to this ‘no’; agreements prior to the execution tion if it were otherwise made lease, they of the written contract or parol evidence rule would become a protected by in- should have themselves mockery, because all a to the writ- corporating in the written avoid, ten contract would do the promises representations upon or modify nullify or it would be to aver (and they rely, they now should which prove) representa- the false provisions they have omitted the which tions fraudulently made. nullify. repudiate now desire to The Parol Evidence Rule has had a Pennsylvania. checkered career in Id. 104-05. Now wisely that it has been well and settled ¶22 In the Appel instant we will not permit it to be evaded and signed lants contract that stated that it undermined such tactics. Fraudu- parties’ agreemént was the whole and that lent misrepresentations may proved be representations there were no made modify if avoid written contract it Appellees regarding the condition proved is averred and were property. Appellants agreed also (complete) omitted from the written con- inspected premises had either fraud, tract accident or mistake. right had waived the to do so and were not (citations omitted). Id. at 104 purchasing and footnote in reliance any representations by Appellees. The Court also reasoned that to allow a But plaintiff to introduce evidence that now are before this Court as the defendant serting re- a claim for fraud the inducement garding property, the condition of the in an effort to disavow the terms to which

549 550, §§ 551 they expressly agreed. Under the facts of MENT (SECOND) Torts Leasing, evidence rule Bldg. bars See also National Inc. Knight’s 963, 370, evidence of Defendant 252 A.2d Byler, Pa.Super. 966 misrepresentation that “there not (1978) Gibbs, 550); § (citing A.2d at problems” According- the property. 551).5 (citing § ly, relief, Appellants are entitled to no ¶ 24 is defined Fraudulent Concealment Bardwell, following we conclude that a as follows: seller of real estate commercial must be Liability § 550. For Fraudulent Con- limit permitted contractually liabilities to cealment arising the condition of the property from a One to transaction who specific sold contractual provi- means action concealment or other inten- sions, party may and that the other not tionally prevents the other from ac- a provisions by vague circumvent such al- quiring is material information sub- legation in the Ac- of fraud inducement. liability ject other, to the same cordingly, presented by Appel- the issue pecuniary though he for loss as had lants question in their second is without stated the nonexistence of the matter merit.3 prevented was thus other question In the first pre discovering. from review, sented Appellants argue for our Comment: the Amended “stated a in this a. rule stated Section is cause upon of action which relief could be commonly types in two of situa- applied granted in that it the requisite tions, to although it is not limited them. in a real elements fraud estate transac The first when the defendant ac- occurs upon Appellees’ tion” based failure to dis tively a defect or other disad- conceals close, failure claim which constituted vantage something offering that he is misrepresentation.4 material Brief for for sale to Thus a another. defendant Appellants at 14. There are separate two subject liability for a fraudulent mis- impose liability torts that for fraud representation paints if he over and so vendor of real estate in a commercial or conceals a in a chattel or build- defect even though residential transaction ing endeavoring to sell vendor he is made no affirmative misrepresenta (1) (2) plaintiff to Concealment; plaintiff, tion: and thus induces the Fraudulent buy Fraudulent Nondisclosure. See it of its defective char- ignorance Restate- Appellants’ excep- Knight Country 3. and North reliance on the limited which Defendants misplaced, tion set in LeDonne is as that parties. forth Real Estate not These defen- integration dants, case a much narrower however, involved integration "may enforce the arising clause a claim for fraud from a any exculpatory provision in clause and other residential real estate transaction. In Le- First the written between” Nation- Donne, analysis hinged on our the fact that Appellants. See Blumenstock v. al Bank and disclaimed contract Gibson, (Pa.Super.2002). "apparent” as to would be defects that inspection through "visual alone.” Id. 5.We note that as this case does involve 1129. sale of with "not less than one dwelling nor more than four residential Complaint, We 4. that in the Amended note units,” impli- § does not 68 Pa.C.S. claim for failure disclose is duty to statutorily imposed cate the disclose ensuing Appellees. Our leveled at all discus- set forth in Pa.C.S. parties' material defects rights and sion revolves around the § arising liabilities

550 also, subject liability he is to the other to exercise

acter. So reasonable care question. plaintiff if a to disclose the matter in he reads contract to and it, (2) portion omits a or if he so stacks One to a business transac- selling aluminum that he to duty sheets is as under tion is a to exercise rea- defective, conceal sheets the middle of care sonable to disclose to the other pile. before the transaction is consummat- ed, (1977). § 550 (Seoond) Restatement Torts (a) matters him known to that Thus, Byler, plaintiff alleged where the the other is entitled to know be- that buildings, defendants demolished bur- fiduciary of a cause other similar hole, ied the rubble in excavated and relation of and trust confidence be- it, planted vegetation then over we con- them; tween and that in grant- cluded the trial court erred (b) matters to him known that he ing preliminary objections the defendants’ necessary prevent knows to be to his in the form of a We reasoned demurrer. partial ambiguous statement of plaintiff prove if the could -that that defen- being misleading; the facts from dants “concealed of a condi- existence premises, knowing tion on the (c) subsequently acquired infor- condition made the unsuitable for he mation that knows will make use,” plaintiffs] plaintiff intended then [the misleading previous rep- untrue or a would be entitled to relief for the defen- resentation that when made was Byler, dants’ fraudulent concealment. so; true or believed to be A.2d at 966. (d) falsity representation of á ¶25 us, In the case before Appellee expectation not made with the argues Bank National that the Amended upon, it would be acted if he subse- Complaint does not aver that it made quently learns the other is attempt to conceal the condition of the about act reliance a system. sewer Appellee Brief for First him; transaction Indeed, Bank at National (e) transaction, facts basic to the - reviewed the Amended if he knows that the other is about averment, (cid:127) Therefore, there no such is to enter into it under a mistake as Appellants have plead failed cause them, other, and that the because action for fraudulent concealment. relationship them, between ¶ 26 next turn to the issue We the trade customs of or other fraudulent tort de objective circumstances, nondisclosure. The is rea- would sonably expect fined as follows: those disclosure of facts. Liability § 551. For Nondisclosure § (Seoond) Restatement Torts (1) One who fails to disclose to section, may Pursuant to this one be may another a fact that he knows held liable for fraudulent nondisclosure if justifiably induce the other to act or person subject to one the duties acting refrain from in a business (a) subparagraphs through enumerated in subject li- transaction is same (e). ability though he had to the other as represented initially the nonexistence of the note We disclose, duty question matter that he has failed to exists is a “[w]hether if, only if, duty but he is under a law.” Brisbine v. Outside In School of Ed., is re- Inc., assumption of this risk A.2d Experiential *12 provisions Agreement. of the (Pa.Super.2002). Although flected two Complaint Appellees First, typewritten that clause stat- Amended avers there is the duty de- a to disclose such latent the Appellants purchasing “owed that were ing the system,” provi- in the water and sewer This a part fects is of property “as is.” seller, of this Appellants specify Bank, do not the nature as the in which National sion duty that duty. conclude that the We pipes the condition the water warranted of arguably Appellees Appellants owed any if doubt motel. And there was to the (e). specified subparagraph the one making any not other bank was that the warranties, final of the paragraph the ¶ is requirement duty The first of this have that Appellants states Agreement is the undisclosed fact be one that that condi- purchase present to in its “agreed to the transaction.” “basic otherwise specified unless herein.” tion A fact is a fact that is assumed basic Thus, parties the through bargaining, transac- parties the as basis for the bank the agreed that the would warrant It goes tion itself. is fact that to the (the part of .property condition of one the essence, transaction, basis, of and or the motel), that Appel- to but pipes water important part is an of the substance accept the lants would remainder bargained is dealt with. what for or with- present in its condition and property may and important Other facts serve as warranty. out persuasive inducements to enter into the transaction, but to es- go not its [do] Second, states also material, may These facts but sence. be prop- either Appellants inspected that parties they are not basic. If the ex- right to do so. Fur- erty or waived impliedly pressly place or the risk as ther, they pur- they agreed party the existence of one to a fact on a result of chasing as places or if the law it there custom and not in inspection reliance or otherwise has no other Ap- by Appellees. duty of disclosure. allege they had the pellees do not § 551 Com- (SeCONd) RestatemeNt as is property professionally inspected, Torts ¶ (1977) added). j (emphasis ment transactions, and in real estate common ¶29 undetectable that the defective sewer was In al- Appellants have Instead, they aver latency. in due to its Appellees of a leged knew defect readily apparent “was that the defect not sewage system approxi- that will cost However, $28,000 Considering layperson.” to a mately repair. significant cost is a percentage

that this extent, sanctioned a considerable [t]o $170,000, price purchase the overall the communi- the customs mores of necessary perform that it was work and better busi- ty, superior information resolving any property, to use the legitimate advantages, acumen are ness Appellants, in favor of we conclude doubt liability. no The defen- lead to which defect was that the existence the sewer reasonably plaintiff may expect the dant a fact basic to the transaction. draw-his investigation, his own to make himself; However, protect conclusions and conclude own also indolent, inexperi- plaintiff is express and if the terms pursuant judgment is ignorant, risk enced Agreement, assumed the his bad, access to ade- fact, there- or he does of this as to the existence information, un- it. the defendant fore, duty quate had no to disclose Appellees obligation good subject property. der no his make defi- This Court has ob- comply ciencies. served order to with Pa. 1019(b), R.C.P. which states that “[a]ver- § 551 Com- (Second) Restatement ToRts ... ments of fraud shall be averred with ¶k (1977). Appellants op- ment had the particularity,” plaintiff plead must portunity inspect property, but facts sufficient to enable the defendant to their Amended did not Valloti, prepare defense. See McGinn v. right. aver that exercised this Osten- Pa.Super. 525 A.2d 732 In sibly, they thereby saved themselves the *13 view, my Appellants’ complaint satisfies they expended pro- sum on a would 1019(b) allegation because the that Rule. fessional inspection. they Nor do aver Knight Appellants Ms. advised that there a professional inspection that would not problems property were no with the have revealed the sewer defect due to its permit Appellees prepare sufficient to to Rather, latency. they proceeded on the defense. problems basis that there were no with the ¶ property readily because no defects were Turning 3 of Appellants’ merits apparent to them. And that was not wise. argument, majority substantive the cor- rectly Appellants observes that seek to

¶ 'Appellants’ bargain purchase was to inspection” invoke excep- the “real estate property present the in its condition rule, parol tion to the origi- evidence which right inspect They engaged with the to it. Kessler, in nated LeDonne v. 256 Pa.Su- endeavor, risky in this presum- commercial per. 389 A.2d 1123 In that ably bargain. for the benefit of Un- plaintiffs purchased the a house and circumstances, der such the rule of caveat subsequently instituted an action in tres- emptor applies. Unfortunately, Appellants sellers, pass against the asserting that caution, proceeded without and this Court they agreed buy had to the home in reli- remedy can not their mistake. misrepre- ance the sellers’ fraudulent ¶ 33 Order AFFIRMED. septic system sentations that the had been repaired and that the sundeck and cellar ¶ Judge a concurring BOWES files plaintiffs had no leaks. further al- The opinion. leged shortly after moved into BY CONCURRING OPINION house, septic system malfunctioned BOWES, J.: began and the cellar sundeck and the ¶ water, Although damaging I concur with the leak numerous of result items majority join personal in property. reached its analysis Appellants’ well-reasoned ¶4 objec- The filed preliminary sellers claim, fraudulent I nondisclosure write tions the nature of a demurrer and separately clarify my position regarding requested summary judgment, arguing contention that should be evidence rule barred the allowed to offer evidence of the plaintiffs prosecuting the action. misrepresentation realtor’s oral Specifically, the sellers asserted concerning property. the condition of the plaintiffs prevail could not because ¶ matter, I disagree paragraph agreement As a sixth of the sale majority’s Appel- provided, parties knowledge with the conclusion that “The have full complaint specificity physical appearance lants’ lacks because it of the of the land and buildings “indicat- and of value Knight does not describe how Ms. thereof and representations are no as problems ed” that there were no with the there verbal con- misrepresentations quality.” sellers’] character or Id. at 1126. cerning septic system problems. “as a interpreted language trial court this clause complete integration which barred omitted). (citations Id. at 1129 testimony representations con- all oral bar, sug- In the at case transaction,” cerning the ... id. Le- they, plaintiffs like the gest summary judgment granted in favor Donne, permitted should be to submit the sellers. pre-contractual represen- of the Knight allegedly tation made Ms. be- plaintiffs appealed, 5 When the inspection property a visual cause part, part Court affirmed vacated not have revealed latent defect would reasoning language that the cited However, sewage system. in the “only trial court the existence deni[ed] provided Appel- of sale verbal as to character agreed purchase lants quality building of land and conditions relying “upon representation without reasonably apparent inspection from an *14 the ... or any Agent Seller added). premises.” (emphasis Id. of ” Sale, .... Seller] [of view, that the Consistent with we held Moreover, 7/17/01, 2. agreement plaintiffs precluded offering tes- clause, integration an and it contained timony regarding “pre-agreement repre- Appellants agreed pur- provided concerning sentations con- quality and property “present in its condi- chase the dition of the sundeck cellar” because tion,” Thus, present Id. case there was that the plaintiffs evidence visu- LeDonne, distinguishable from su- clearly ally inspected signing those areas before unequivo- herein pra, since the contract agreement, signs of detected cally Appellants stated that were not However, water Id. at leakage. reliance buying system, respect septic con- concerning the con- prior plaintiffs cluded that could sustain I property. Consequently, dition following their cause of action based on the majority same as the be- reach the result rationale: specifically sale cause the septic system Because the under- Therefore, addressed the issue at hand. ground, plaintiffs] [the could not have cannot introduce evi- possessed knowledge physical full of its modify or void the terms of the dence to appearance adequacy and could not HCB Contractors v. agreement. Accord Associates, readily ascertained whether Place 539 Pa. Liberty Hotel (1995) (builder drainage They problem existed. ob- could field, modify or su- purported drainage served but not offer written, integrated con- terms persede observation would not reasonably claims tract because builder’s related put them on notice the subterrane- subjects specifically that were addressed septic system still malfunctioned. contract). Indeed, opposite would be inference logical. plaintiffs] [the more Because through inspec-

could discern visual septic

tion existence alone the

system problem of which now com- six does

plain, wording paragraph admission

not bar of evidence of [the

Case Details

Case Name: Youndt v. First National Bank of Port Allegany
Court Name: Superior Court of Pennsylvania
Date Published: Feb 2, 2005
Citation: 868 A.2d 539
Court Abbreviation: Pa. Super. Ct.
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