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MIDDLETON v. REALEN HOMES

October 27, 1998

GEORGE MIDDLETON, Plaintiff,
v.
REALEN HOMES, INC., individually and t/a RHI-OAK TERRACE, L.P., Defendant.



The opinion of the court was delivered by: JOYNER

MEMORANDUM AND ORDER

 JOYNER, J.

 October 27, 1998

 Presently before the Court is Defendant, Realen Homes, Inc.'s ("Realen" or "Defendant"), Motion for Partial Summary Judgment as to Count II of Plaintiff, George Middleton's ("Middleton" or Plaintiff"), amended complaint which seeks recovery for Realen's alleged breach of an agreement to sell Plaintiff a house, and Defendant's Motion to Dismiss for Lack of Subject Matter Jurisdiction if summary judgment is granted as to Count II. Also before the Court is Plaintiff's Motion for Partial Summary Judgment as to Count I of the amended complaint which alleges breach of contract and seeks recovery of Plaintiff's allegedly guaranteed bonus amount of $ 65,000. For the following reasons, Defendant's Motion for Partial Summary Judgment as to Count II is granted; Defendant's Motion to Dismiss is denied; and Plaintiff's Motion for Partial Summary Judgment as to Count I is denied.

 BACKGROUND

 Plaintiff was hired by Realen in August of 1996 as Division Manager for Realen's Philadelphia Division. Middleton's compensation was to be $ 125,000 per year, with a bonus equal to 3% of the Division Net Income. Realen guaranteed that Middleton's bonus for the first 12 months would be no less than $ 65,000. However, Realen's standard bonus compensation agreement, referenced in Middleton's offer letter, stated that if Middleton was terminated for cause, as defined in the agreement, he would forfeit all accrued but unpaid bonus compensation. *fn1" In the offer letter, Realen also offered Middleton the opportunity to purchase a Realen home in one of their neighborhoods at a discounted rate.

 Plaintiff decided to build a Realen home in the Aberdeen at Talamore community. Realen authorized Plaintiff to begin construction on the home in approximately November of 1996. Architectural drawings were prepared for Middleton's home, and Middleton prepared an Addendum and Agreement of Sale, which included some figures regarding the cost of the property, its location and specific description, and referenced the architectural drawings. However, Realen did not sign the Agreement of Sale. The facts demonstrate that Middleton and Realen engaged in ongoing negotiations concerning the construction and cost of the home.

 In August of 1997, Realen terminated Plaintiff. Realen asserted that Plaintiff was terminated for cause as defined in the bonus compensation agreement and therefore did not pay Plaintiff the $ 65,000 bonus that had been guaranteed. Regarding the home being built, following his termination Plaintiff wrote a letter to Realen indicating, among other things, that he did not accept their "proposal" for the sale of the house and thus indicated that his purchase of the home was impossible. Realen offered the home for sale to Middleton once more at its appraised value, but Middleton did not accept the offer. Realen subsequently sold the house to a third party at a profit.

 Plaintiff brought this action pursuant to 28 U.S.C. § 1332 seeking the $ 65,000 in bonus compensation and claiming that Realen reneged on the sale of the house to Plaintiff causing Plaintiff a loss of an amount in excess of $ 100,000. Both parties agree that this action is governed by Pennsylvania law.

 DISCUSSION

 I. Summary Judgment Standard

 Summary judgment is appropriate where the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, reveal no genuine issue of material fact, and the moving party is entitled to judgment as a matter of law. Fed. R. Civ. P. 56(c). Our responsibility is not to resolve disputed issues of fact, but to determine whether there exist any factual issues to be tried. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247-49, 91 L. Ed. 2d 202, 106 S. Ct. 2505 (1986). The presence of "a mere scintilla of evidence" in the nonmovant's favor will not avoid summary judgment. Williams v. Borough of West Chester, 891 F.2d 458, 460 (3d Cir. 1989)(citing Anderson, 477 U.S. at 249). Rather, we will grant summary judgment unless "the evidence is such that a reasonable jury could return a verdict for the nonmoving party." Anderson, 477 U.S. at 248.

 In making this determination, all of the facts must be viewed in the light most favorable to the non-moving party and all reasonable inferences must be drawn in favor of the non-moving party. Id. at 256. Once the moving party has met the initial burden of demonstrating the absence of a genuine issue of material fact, the non-moving party must establish the existence of each element of its case. J.F. Feeser, Inc. v. Serv-A-Portion, Inc., 909 F.2d 1524, 1531 (3d Cir. 1990)(citing Celotex Corp. v. Catrett, 477 U.S. 317, 323, 91 L. Ed. 2d 265, 106 S. Ct. 2548 (1986)).

 II. Statute of Frauds

 Defendant seeks summary judgment on count II of Plaintiff's amended complaint arguing that Plaintiff cannot recover on a breach of contract theory for the sale of the house because Plaintiff has not shown sufficient evidence to demonstrate a signed writing that satisfies Pennsylvania's Statute of Frauds. See 33 P.S. § 1. Count II of Plaintiff's amended complaint alleges that Realen entered into an agreement of sale whereby Realen would construct and sell a home to Plaintiff for which Plaintiff would pay the Defendant's construction costs plus a profit of $ 3,000. See (Pl.'s ...


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