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CONSTITUTION BANK v. DIMARCO

November 8, 1993

CONSTITUTION BANK, Plaintiff,
v.
ANTHONY J. DiMARCO and ROSE DiMARCO, Defendants.



The opinion of the court was delivered by: BY THE COURT; J. CURTIS JOYNER

 Joyner, J.

 I. Introduction

 This court has in this case already adjudicated one motion to dismiss and two motions for judgment on the pleadings. As a result of these motions, we have dismissed five of the original seven defendants and five of the eight counts against the remaining defendants, Anthony J. DiMarco (DiMarco, Sr.) and Rose DiMarco (Defendants). In the remaining three counts, Constitution Bank (the Bank) seeks to recover compensatory and punitive damages arising from allegations of fraud, conspiracy to commit fraud and a common law tort of civil aider and abettor liability.

 Now before the court is Defendants' motion for summary judgment. For reasons explained below, the motion is granted.

 II. Facts

 The relevant facts of the case are not in dispute. Anthony DiMarco, Jr. (DiMarco, Jr.) was the sole shareholder, officer and director of a corporation called DiMarco Development Group at Hidden Creek, Inc. (DiMarco Development Group). DiMarco, Jr., along with periodic business partner Joseph Dilullo, developed real estate. Early in 1990, DiMarco, Jr.'s financial condition began a downward slide forcing him to borrow large sums of money from several sources.

 DiMarco, Sr. was one such source. On July 12, 1990, DiMarco, Sr. loaned $ 200,000 to his son, DiMarco, Jr., properly securing the transaction with a note and a mortgage on DiMarco, Jr.'s residence. On October 16, 1990, DiMarco Jr. executed another note and a second mortgage on his house to secure an additional $ 100,000 loan from DiMarco, Sr. *fn1" DiMarco, Sr., through his attorney, properly recorded both mortgages on October 30, 1990 in Montgomery County, Pennsylvania.

 DiMarco, Jr. also procured loans from Constitution Bank. At the Bank's request, DiMarco, Jr. submitted a personal financial statement before qualifying for the loan. Early in 1990, on the strength of the financial statement and endorsements from other creditors, the Bank loaned $ 300,000 to DiMarco, Jr. The Bank secured the loan with DiMarco, Jr.'s personal guaranty and two houses then under construction at a development project. DiMarco, Jr. fully repaid the loan by August 1990. In October, 1990, the Bank gave DiMarco, Jr. a second $ 300,000 loan based on his previous loan with the Bank and the updated financial statement. This loan, however, was unsecured and backed only by DiMarco Jr.'s personal guaranty.

 In 1991, DiMarco, Jr.'s financial condition seriously worsened resulting in the default on his loans with the Bank. In December, 1991, DiMarco, Jr. and the Bank entered into restructuring and forbearance negotiations. DiMarco, Jr. used his personal residence as part of the negotiations.

 DiMarco, Sr., like any other creditor, took steps in an effort to protect his interest and strengthen his position against his son's other creditors. *fn2" On January 30, 1992, DiMarco, Sr. publicly confessed judgment against his son on the basis of the $ 100,000 note and accompanying mortgage. That same day DiMarco, Sr. requested that DiMarco, Jr.'s homes be sold at a sheriff's sale in order to satisfy his judgment. Through his attorney, DiMarco, Sr. purchased the residence at a publicly held sheriff's auction on April 15, 1992. At the time of the confession, DiMarco, Sr. was not aware of DiMarco, Jr.'s $ 300,000 loan with the Bank.

 On May 21, 1992, in a meeting with DiMarco, Jr., the Bank first learned that Defendants had purchased DiMarco, Jr.'s home in a publicly held sheriff's sale. The Bank on May 26, 1992 unsuccessfully attempted to confess judgment against the DiMarco Development Group in order to protect the ...


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