Original jurisdiction in case of United Brokers Mortgage Company v. Fidelity Philadelphia Trust Company, individually and as agent for The Public School Employees Retirement Board and the State Employes Retirement Board and Public School Employees Retirement Board of the Commonwealth of Pennsylvania and Public State Employees Retirement Board of the Commonwealth of Pennsylvania.
Lawrence D. Levin, with him Bank, Shor, Levin & Weiss, Steven R. Waxman and Bolger & Picker, for plaintiff.
Allen C. Warshaw, Deputy Attorney General, with him Lawrence Silver, Deputy Attorney General, and Robert P. Kane, Attorney General, for defendant, Commonwealth.
H. Robert Fiebach, with him Alan B. Rubenstein, and, of counsel, Wolf, Block, Schorr and Solis-Cohen, for defendant Fidelity Philadelphia Trust Company.
President Judge Bowman and Judges Crumlish, Jr., Wilkinson, Jr., Mencer and Blatt. Judges Kramer and Rogers did not participate. Opinion by President Judge Bowman.
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This matter is before us on preliminary objections to a complaint in assumpsit and trespass filed by
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United Brokers Mortgage Company (plaintiff). The named defendants are Fidelity Philadelphia Trust Company (Fidelity) individually and as agent of the other defendants, the Public School Employees' Retirement Board, and the State Employees' Retirement Board (collectively referred to herein as Funds).
The well pleaded factual averments of the complaint, which we accept as true for present purposes, disclose that by written contracts Fidelity is an agent for the Funds for the limited purpose of selecting and acquiring federally protected mortgages as investments for said Funds. The agency relationship is strictly controlled as the contracts between Fidelity and the Funds set forth detailed criteria for selection of mortgages and require the approval of the Funds for each specific investment. Subsequently, Fidelity as provided by the aforesaid agency contracts with the Funds, entered into several purchasing and servicing agreements (Agreements) with plaintiff, whereby Fidelity in its discretion could purchase mortgages from plaintiff and plaintiff would service said mortgages.
The dispute between the parties culminating in this litigation arose as a result of difficulties plaintiff experienced with the Federal Housing Administration (FHA), and its ultimate loss of certification as an approved FHA mortgagee. In apparent anticipation of its loss of certification, plaintiff endeavored to assign its interests in the Agreements to other certified mortgage lending companies; plaintiff allegedly entered into several contracts to assign its interest conditioned upon Fidelity's approval, however these contracts were never performed due to Fidelity's refusal to approve the assignments. The Agreements provided for such assignments with the written consent of Fidelity. Fidelity in July 1974 gave notice of its intent
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to terminate the Agreements unless plaintiff was able to cure its alleged default and obtain reinstatement of its FHA certification. Fidelity terminated the Agreements on September 3, 1974.
The gravamen of the complaint is Fidelity's refusal to approve the aforementioned contracts for assignment of plaintiff's interests in the Agreements -- in plaintiff's opinion an unreasonable refusal -- and the accompanying termination of the Agreements by Fidelity. Count I of the complaint is in assumpsit and seeks damages for unreasonable refusal to permit assignment and unreasonable termination, and in addition contains averments that said conduct was part of a scheme by Fidelity or Fidelity and the Funds to obtain unjust enrichment. Count II of the complaint sounds in tort and alleges that Fidelity alone or with the direction or acquiescence of the Funds wrongfully and intentionally interfered with plaintiff's business, and further that defendants engaged in a course of ...