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CEDRONE v. UNITY SAV. ASSN.

May 21, 1985

FRANK M. CEDRONE, TRADING AS "SUGARLOAF ASSOCIATES," A LIMITED PARTNERSHIP
v.
UNITY SAVINGS ASSOCIATION, AN ILLINOIS CORPORATION v. THE TITLE INSURANCE CORPORATION OF PENNSYLVANIA; FRANK M. CEDRONE, TRADING AS "SUGARLOAF ASSOCIATES," A LIMITED PARTNERSHIP v. TALMAN HOME FEDERAL SAVINGS & LOAN ASSOCIATION v. THE TITLE INSURANCE CORPORATION OF PENNSYLVANIA; AMERICAN BANK & TRUST COMPANY v. TALMAN HOME FEDERAL SAVINGS & LOAN ASSOCIATION v. THE TITLE INSURANCE CORPORATION OF PENNSYLVANIA



The opinion of the court was delivered by: GREEN

 I

 These related cases concern an aborted real estate transaction. The transaction was to include the sale of, and financing construction on, 3,500 acres of partially developed land in the Luzerne and Schuylkill counties of Northeastern Pennsylvania. A part of the land was owned by American Bank and Trust Company of Pennsylvania ("American Bank"). A second part was owned by Unity Savings and Loan Association ("Unity"). A third portion of the land, however, was the subject of a title dispute between American Bank and Unity. Also involved in the dispute was the Title Insurance Company of Pennsylvania ("TICP") which had insured Unity's interest in the title to the land in dispute. *fn1"

 In the first two of three related actions filed in this court (Civil Actions No. 82-811 and No. 82-2838), plaintiff, attempted purchaser Frank M. Cedrone, trading as Sugarloaf Associates, a Limited Partnership ("Cedrone"), has sued defendant Unity *fn2" as seller and construction lender contending that Unity breached agreements to convey Unity's land and to fund a construction loan. Unity, while denying any liability, impleaded TICP as a third party defendant in both of the Cedrone actions. Unity contends that if this court finds it liable to Cedrone in either action, TICP is in turn liable over to Unity. TICP subsequently counterclaimed against Unity (in both actions) for counsel fees incurred prior to the aborted closing and as a result of this litigation.

 In the third related case (No. 82-4856), plaintiff American Bank has sued Talman for breach of contract and tortious interference with contract arising out of the same transaction. Talman has also impleaded the title insurance company, TICP, as a third party defendant in the American Bank action. *fn3"

 Presently pending before this court are several motions: Defendant Unity has filed motions for summary judgment against plaintiff Cedrone in actions No. 82-811 and No. 82-2838; it has also filed a summary judgment motion against plaintiff American Bank in action No. 82-4856; and, it has filed summary judgment motions against third party defendant TICP's counterclaims in all three cases. Finally, third-party defendant TICP has filed cross motions for summary judgment against defendant/ third-party plaintiff Unity in all three actions. For the reasons discussed infra, all of Unity's motions will be denied, and TICP's cross motions against Unity will be denied.

 After a listing of the relevant facts, as disclosed by the record, there follows a discussion of the resolution of the individual summary judgment motions.

 II

 In 1980 and 1981, Cedrone negotiated with both American Bank and Unity to purchase their respective interests in the land at issue. On March 25, 1981, Cedrone signed separate Agreements of Sale and Purchase with both sellers. *fn4" Both sale agreements were conditioned upon the settlement and termination of all title dispute litigation between and among American Bank, TICP, and Unity with regard to the real estate at issue. Both agreements were also conditioned on each other, i.e., the sale to Cedrone by American Bank was conditioned on Cedrone's purchase from Unity and vice versa. Additionally, Cedrone's agreement with Unity was further conditioned upon Cedrone's receipt of construction loan financing from Unity.

 In an attempt to close the transaction, the parties, either personally or through their respective counsel, met several times during the spring and summer of 1981. Finally, on July 17 of that year, American Bank, TICP, and Unity (through counsel) signed a "Settlement Agreement" with respect to the lawsuits regarding the title dispute between and among them. By handwritten addendum, the Settlement Agreement was also conditioned upon both the American Bank sale to Cedrone and the Unity sale to Cedrone. *fn5" Thus, the American Sale Agreement, the Unity Sale Agreement, and the Settlement Agreement were all conditioned on one another.

 The same day that the Settlement Agreement was signed, July 17, 1981, Cedrone and Unity, through counsel, also entered into a Construction Loan Agreement. This agreement was conditioned upon, inter alia, settlement of the title disputes and Cedrone submitting to Unity a certificate of insurance with regard to the improvements covered by the loan. The certificate was to provide, among other things, not less than thirty days notice to Unity prior to cancellation or material changes in the policies. Additionally, the company issuing the policies and the certificate(s) evidencing same had to have had an A rating from Best's *fn6" for that year.

 All parties were present (Unity by counsel) at a meeting in Philadelphia to complete the steps necessary to close the transaction. This meeting was held on July 17, 1981 (the day that both the Construction Loan Agreement and the Settlement Agreement were signed). Various documents were signed that day, and checks for the payment of money (required to be exchanged by the Settlement Agreement) were drawn and physically present in the settlement room. Unity, however, did not fund the construction loan on that day. Nor did it fund the loan, or respond to inquires from Cedrone regarding same, for several days thereafter. Indeed, it never funded the loan, nor sold the land to Cedrone. It is for damages purportedly arising out of these omissions that plaintiff Cedrone has brought suit.

 In the days following the July 17th attempted closing, TICP, in addition to Cedrone and American Bank, attempted to reach representatives of Unity. Unity, however, did not respond to phone calls from any of the parties involved in the transaction. After four days of silence from Unity, TICP through counsel, sent a letter (hand delivered to counsel for Unity in Philadelphia and simultaneously federal expressed to Unity officials in Chicago) requesting that Unity furnish a statement of its position regarding the Cedrone settlement within twenty-four hours or suffer the termination of its title insurance and the destruction of the Settlement Agreement by TICP. When no response was forthcoming from either Unity or its counsel, TICP terminated Unity's title insurance and directed the physical destruction of ...


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