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Spruce Street Properties, Ltd., An Ohio Limited Partnership, D/B/A v. Dr. Francis Noblesse

September 19, 2011

SPRUCE STREET PROPERTIES, LTD., AN OHIO LIMITED PARTNERSHIP, D/B/A
PITTSBURGH SPRUCE STREET PROPERTIES, PLAINTIFF,
v.
DR. FRANCIS NOBLESSE, AN INDIVIDUAL, DEFENDANT.



The opinion of the court was delivered by: David Stewart Cercone United States District Judge

Electronic Filing

MEMORANDUM OPINION

I. INTRODUCTION

Plaintiff, Spruce Street Properties, Ltd. ("Spruce Street"), initiated this action by complaint filed in the Court of Common Pleas of Allegheny County, Pennsylvania, alleging breach of contract by Defendant, Dr. Francis Noblesse ("Noblesse"). Noblesse removed the action to this Court, and filed an Answer and Counterclaim alleging: (1) breach of contract; (2) conversion; (3) violation of the Pennsylvania Unfair Trade Practices Act and Consumer Protection Law ("UTPCPL"), 73 PA. CONS. STAT. ANN. § 201-1 et seq.; (4) fraudulent misrepresentation; and (5) negligent misrepresentation. Spruce Street and Noblesse have filed cross-motions for summary judgment, responses have been filed, and the matters are now before the Court.

II. STATEMENT OF THE CASE

On or about August 22, 2007, Spruce Street and Noblesse entered into an Agreement of Sale (the "Agreement") for a condominium unit (the "Unit") to be erected in the Carlyle, a condominium development in Pittsburgh, Pennsylvania. Spring Street Statement of Material Facts ("SS. SMF") ¶ 1; Noblesse Concise Statement of Material Facts*fn1 ("Nob. CSMF") ¶ 13; Noblesse Appendix ("Nob. App.") Exhibit 8. Pursuant to the Agreement, the purchase price of the Unit was Four Hundred Fifty-Three Thousand Three Hundred Fifteen ($453,315.00) Dollars. SS. SMF ¶ 2. In accordance with the Agreement, Noblesse paid Spruce Street Forty-Five Thousand ($45,000.00) Dollars in "hand money" as a deposit upon execution of the Agreement. Nob. CSMF ¶ 14. Noblesse is entitled to a return of his deposit if the Agreement is terminated pursuant to Paragraph 6(b) of the Agreement. Nob. App. Ex. 8 ¶ 6.

Paragraph 6(b) of the Agreement, title "DEFAULT," provides:

If for any reason Seller is unable to convey title at the Closing in accordance with the requirements of this Agreement, or if for any reason Seller is unable to construct or complete the Unit by February 1, 2009, Buyer shall have the right to reconsider his purchase of the Unit. If Seller can demonstrate to Buyer that the completion of the Unit is imminent, the Buyer shall proceed with the closing as outlined herein. If Seller cannot demonstrate that the completion of the Unit is imminent, then upon written request of the Buyer, Seller shall return to Buyer all monies paid hereunder, whereupon this Agreement shall become null and void and of no further force and effect and neither party shall have any further rights or obligations. The foregoing shall be Buyer‟s sole remedy in the event of Seller‟s default or failure as aforesaid.

Id. Paragraph 14 of the Agreement, titled "CLOSING*fn2 ," provides in relevant part "It is contemplated that Seller will deliver said Unit to Buyer on or before February 1, 2009 (the "Closing") . . . Such time of delivery shall not be extended . . . [Buyer] shall have the right to terminate this Agreement as outlined in paragraph 6(b)." Nob. App. Ex. 8 ¶ 14. The Agreement also contains a "TIME IS OF THE ESSENCE" clause which states in relevant part: "Time is of the essence of this Agreement. . ." Id. at ¶ 10. In the "NOTICE REGARDING TIME OF THE ESSENCE", the Agreement provides: " "Time is of the essence‟ means that all times and dates in this Agreement are material terms of this Agreement, and must be met to avoid the breach of the Agreement." Id. at p. 9.

By letter dated January 6, 2009, Leslie K. Eisel ("Eisel"), acting on behalf of Spruce Street, issued Noblesse a "60 day notice of closing" and requested that Noblesse indicate a preferred closing date on an attachment and return the attachment to her by January 16, 2009. SS. SMF ¶ 5; Nob. CSMF ¶¶ 22, 23 & 25. The closing dates proposed by Eisel on the attached form were from March 2, 2009, through April 11, 2009. Nob. CSMF ¶ 24. Noblesse responded by e-mail and requested confirmation that "the work on the building and on the units is entirely complete at this time," and informed Eisel that before he could make a decision on a closing date, he needed to travel to Pittsburgh and inspect the Unit. Nob. CSMF ¶¶ 28 & 29.

Before responding to Noblesse‟s e-mail, Eisel forwarded her draft response to David Bishoff ("Bishoff"), Spruce Street‟s chief executive, who instructed Eisel to change the draft response*fn3 to state: "[T]he notice is being sent out in accord with the contract as we are preparing and will have the unit "completed‟ in accord with and as defined by the terms of the contract." Nob. CSMF ¶ 32. This statement was included in Eisel‟s response dated January 13, 2009. SS. SMF ¶ 8; Nob. CSMF ¶ 35. Noblesse responded to Spruce Street by e-mail dated January 16, 2009, and informed Eisel that he and his wife would be traveling to Pittsburgh to visit the Carlyle on January 23rd and 24th. Nob. CSMF ¶ 38. In addition, Noblesse responded to Spruce Street‟s request that he select a closing date as follows: "With respect to a date for closing, PLEASE schedule us as far back as possible, and please not before the week of 6-11 April." Id.

With regard to Noblesse‟s intent to visit the Unit, Spruce Street‟s Katie Richards sent him an e-mail dated January 22, 2009 stating: "The building is still under construction so someone must escort all guests including owners at all times within the building . . . if it is possible to push your visit back about a week or so you would probably see more progress." Nob. CSMF ¶ 44. Noblesse traveled to Pittsburgh and visited the Unit on January 23rd, and made the trip again the next week to check the Unit on January 30, 2009. SS. SMF ¶¶ 10 & 12; Nob. CSMF ¶¶ 45 & 46.

During his visit on January 30th, Noblesse found a sign posted in the Carlyle‟s lobby that stated: ""HARDHATS ARE REQUIRED ON THIS PROJECT AT ALL TIMES. NO EXCEPTIONS." Nob. CSMF ¶ 56. With regard to the Unit, two (2) days prior to the contract completion date, Noblesse noted the following:

 One window in the Unit was covered in plywood and had a sign stating: "DO NOT

OPEN." Nob. CSMF ¶ 58.  The exterior wall of the Unit was pierced with metal rods to support a construction elevator attached to the outside of the building. Nob. CSMF ¶ 59.  The Unit had no furnace, air conditioner, water heater, stove, sinks, or countertops. Nob.

CSMF ¶ 60.  A bathroom specified to be approximately six (6) feet wide in the Agreement, but as built measured approximately two (2) feet shorter. Nob. CSMF ¶ 63.

Noblesse further alleges, and Spruce Street fails to deny, that a construction schedule dated January 29, 2009, which listed the planned finishing dates for interior work on the Unit indicated that tasks with a completion goal of September 2008, had not yet been completed. Nob. CSMF ¶ 61. Moreover, the January 2009 construction schedule listed thirteen (13) tasks for the Unit of which eight (8) were marked zero (0%) percent completed, and only one task pertaining to cabinets was marked as one hundred (100%) percent complete. Nob. CSMF ¶ 62.

On February 1, 2009, the Unit was not completed under the terms of the Agreement. Nob. CSMF ¶ 54; Joint Stipulation ¶ 32. By letter dated January 31, 2009, mailed certified to Spruce Street on February 2, 2009, and received by Spruce Street on February 4, 2009, Noblesse terminated the contract under Paragraph 6(b) of the Agreement and requested the return of his $45,000.00 deposit. Nob. CSMF ¶¶ 77, 78 & 81. In his letter, Noblesse set forth his many disappointments with the project, including the conditions he noted on his visits on the 23rd and 30th of January, and stated:

The delivery date of February 1, 2009, has now arrived. It is perfectly clear from my observations during my visits on January 23 and 30, 2009, and my conversation with Eric Trainer on January 23, 2009, that you are VERY FAR from able to deliver the unit in accordance with our contract. Therefore, I consider our contract terminated; and hereby request that you promptly (time is of the essence here) return the "hand money" of $45,000 that is currently held in escrow. . .

See Noblesse Motion for Summary Judgment, Appendix Ex.16. With regard to Spruce Street‟s right under Paragraph 6(b) to demonstrate that completion of the Unit was "imminent," Noblesse wrote:

. . . "demonstrate" means that you need to provide (i) a LIST OF SPECIFIC TASKS (e.g. install bathroom fixtures and vanities, granite counter tops in the kitchen, granite tiles on the shower walls . . ., carpets, paint) that need to be done -- in both my unit and the common areas (in particular to be able to access the unit) -- with (ii) PRECISE EXPLANATIONS as to the manner in which these tasks will be performed (e.g. granite counter tops and bathroom fixtures cannot be installed until they are on hand; units cannot be accessed as long as the common areas are "hard hat zones"; or elevators do not work or do not work properly), and (iii) PECISE DATES when the tasks will be completed (in this regard, please note that "very soon around the corner" are not dates; February 5, 2009 is a date.) In other words, David, you need to clearly explain (i) WHAT tasks need to be done, (ii) HOW they will be done, and (iii) WHEN they will be completed; and it all needs to be done IMMINENTLY.

Id.

After receiving Noblesse letter indicating his termination of the Agreement and inviting Spruce Street to demonstrate that the project would be completed "imminently," Spruce Street neither demonstrated nor attempted to demonstrate that the Unit would be completed in accordance with the terms of the Agreement. Nob. CSMF ¶¶ 82-85. The only response to Noblesse, was a letter dated February 9, 2009, from Spruce Street‟s counsel, Brenda S. Sebring ...


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