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ESTATE BERT J. BODNAR (04/28/77)

decided: April 28, 1977.

IN RE ESTATE OF BERT J. BODNAR, JR., DECEASED. APPEAL OF JOHN J. BODNAR, ADMINISTRATOR OF THE ESTATE OF BERT J. BODNAR, JR., DECEASED


COUNSEL

Janet N. Valentine, Robert S. Grigsby, Thomson, Rhodes & Grigsby, Pittsburgh, for appellant.

D. Michael Fisher, Pittsburgh, for appellee.

Jones, C. J., and Eagen, O'Brien, Roberts, Pomeroy and Manderino, JJ. Jones, former C. J., did not participate in the decision of this case. Nix, J., did not participate in the consideration or decision of this case.

Author: Roberts

[ 472 Pa. Page 385]

OPINION OF THE COURT

This is an appeal*fn1 from the amended decree of the Orphans' Court of Allegheny County allowing appellee Concord-Liberty Savings and Loan Association's*fn2 claim in the amount of $15,300 against the estate of Bert J. Bodnar. Appellant John J. Bodnar, administrator of the estate,*fn3 argues that Concord's claim is barred by the terms of a release executed by Concord.*fn4 We agree and reverse the orphans' court decree.

Concord's claim arises from a construction loan agreement with decedent, for which decedent executed a bond and mortgage in the amount of $141,000. Reicher Building Company, Inc., contracted with decedent to construct the buildings in question for a price of $114,000. The loan agreement between Concord and decedent provided for periodic payments from Concord directly to Reicher, with Concord inspecting the progress of construction.

[ 472 Pa. Page 386]

After decedent's death, Concord informed counsel for the estate that the total amount outstanding on the loan was $98,700. This figure was then listed as the mortgage amount in an inventory of the estate filed January 24, 1974. The property was sold on March 15, 1974, for $111,000. Concord received $98,700. The net proceeds from the sale after payment to Concord, taxes, and commissions was $1,922.

In June, 1974, Concord discovered that the actual amount paid to Reicher on the construction loan was $126,900, not $98,700. Concord then filed a claim against the estate for $28,200, the difference between the amount of the loan and the amount Concord received after the sale.

Concord also filed suit against Reicher for the $28,200. Concord's complaint against Reicher alleged that the contract between Reicher and decedent "was incomplete," and that Reicher had been unjustly enriched by $28,200, the difference between the amount Concord paid Reicher under the construction loan and the fair market value of the work done. In the alternative, Concord alleged that Reicher had been unjustly enriched by $12,900, the excess of the amount paid to Reicher by Concord over the contract price agreed to by Reicher and decedent. Under either allegation, Concord's claim is based on the theory that Reicher had been unjustly enriched by Concord because Concord paid Reicher more money under the construction loan agreement than was actually due Reicher on Reicher's contract with decedent.

Concord settled its suit against Reicher for $12,900 and executed a general release. The release, prepared by counsel for Concord, provides:

"FOR AND IN CONSIDERATION of the sum of TWELVE THOUSAND NINE HUNDRED ($12,900.00) DOLLARS in hand paid by REICHER BUILDING COMPANY, ...


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