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filed: November 25, 1987.


Appeal from the Order entered in the Court of Common Pleas of Montgomery County, Civil Division, No. 86-06920.


Mark R. Semisch, Willow Grove, for appellant.

Peter M. McGonigle, Philadelphia, for appellee.

Cirillo, President Judge, and McEwen and Tamilia, JJ.

Author: Tamilia

[ 368 Pa. Super. Page 264]

Appellant, Harry Howard, appeals from a February 19, 1987 Order of the Court of Common Pleas of Montgomery County which sustained the preliminary objections of the appellee, Industrial Valley Bank and Trust Co. (IVB), and dismissed appellant's counterclaim with prejudice.

The facts and procedural history of this appeal are as follows. Appellant entered a leasing arrangement with YBH Porshe Audi in August of 1984 for lease of an Audi for a five-year lease term, with total monthly payments in the amount of $37,779, and with an option to purchase the Audi at the end of the term for $13,075.

On April 30, 1986, IVB filed a complaint against appellant, alleging the lease had been assigned to it in return for $48,715.60 consideration. It alleged appellant had not adhered to the agreed obligations because he had returned the car prior to the completion of the lease term, and this placed him in default. At the same time, appellee asserted it had complied with the terms and conditions of the lease. Appellee further claimed $19,911.81 was due and owing to it, it credited appellant with $4,158.49 for payments on the account, $15,690 for sale of the car, $10,248.73 for unearned interest, and added a $237.60 late charge and $1,054.83 interest from August 12, 1985. Additionally, appellee claimed it was entitled to reasonable attorney fees of twenty per cent or $3,932, together with costs of collection, repossession, storage, sale and other charges. Appellee demanded judgment in the amount of $23,893.81 plus the cost of the suit and interest. On June 17, 1986, appellant filed an answer, new matter and counterclaim. In the answer, he denied he was in default of the lease and alleged,

On the contrary, the car was defective and under the 'lemon law' Defendant requested that Plaintiff, as the owner, obtain a new car. Plaintiff advised Defendant it would do nothing, that the fact that the car was 'unrepairable' was 'his problem' and all they wanted was

[ 368 Pa. Super. Page 265]

    money. Defendant rejudicated [sic] the lease by reason of Plaintiff's breach of duty and contract.

Answer and new matter of appellant, 6/17/86, p. 1.

Appellant further responded IVB had deliberately and consciously breached the agreement by refusing to exercise its rights under the Automobile Lemon Law (73 P.S. ยง 1951 et seq.), by refusing to provide appellant with a vehicle fit for the purpose for which leased, by refusing to sell the car at its fair market value, by refusing to answer phone calls and letters, and otherwise attempting to coerce appellant by threats to ruin his credit. Appellant also denied the damages sought by IVB, arguing the car, which was valued at $35,000, was "given away" by IVB for $15,690 despite its ability to sell the car at fair market value. Had IVB sold the car at its fair market value, it would have recovered all sums it believed were due it and, moreover, any loss suffered by IVB was self-imposed by reason of its failure to exercise rights under the Lemon Law.

Appellant's new matter and counterclaim read as follows:


8. On February 18, 1985, the Audi automobile, the subject of the lease, was returned to the dealer for repairs. Shortly thereafter it was returned a second time and on April 1st it was returned a third time. [O]n or about April 1st, 1985, Defendant was advised by an employee of the dealer that the car was not repairable. On April 12, 1985, the vehicle was not repaired. On April 12, 1985 the Defendant, by his attorney, confirmed the aforesaid in writing with Plaintiff and requested that it take action under the lemon law. Counsel had already orally requested the same.

9. On April 24, 1985, counsel for Defendant wrote to Plaintiff a second time since the prior letter was not responded to. On that date counsel advised that he assumed Plaintiff was pursuing its rights since only the owner could exercise the privileges of the lemon law.

[ 368 Pa. Super. Page 26610]

. In or about the end of May or early June of 1985, counsel was called by an employee of Plaintiff. Said employee advised counsel that since the first two letters were not certified the bank might deny receiving the same, although said employee admitted to such receipt. The employee, whose name is unknown, then threatened Defendant with a law suit and a bad credit rating.

11. On June 12, 1985, that conversation was confirmed in writing by counsel in a letter to the Plaintiff and counsel advised again of Plaintiff's responsibility to utilize the lemon law.

12. On or about June 17, 1985 Plaintiff responded in writing for the first time and did not deny the contents of counsel's prior letters.

13. The prior history was set forth in writing by letter from counsel to Plaintiff on June 20, 1986. No reply was received.

14. Sometime thereafter Plaintiff gave the car away for $15,000. when it in fact had a market value of $30,000.

15. No attempt to utilize the lemon law was made by Plaintiff. On September 24, 1985, Counsel requested of Plaintiff information regarding what steps Plaintiff took, or why letters were not answered, and again Plaintiff did not reply.

16. Plaintiff's actions in failing to utilize the lemon law, in failing to sell the vehicle for its fair market value are breaches of its duty and obligations under the lease and law.

17. Defendant rejudicated [sic] the lease by letter dated April 12, 1985, and no response ...

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