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Joseph O'donnell and v. Hovnanian Enterprises

October 4, 2011

JOSEPH O'DONNELL AND SAMUEL CARELLA, ON BEHALF OF THEMSELVES AND ALL OTHERS SIMILARLY SITUATED AT THE NATIONAL AT OLD CITY CONDOMINIUM, APPELLANTS
v.
HOVNANIAN ENTERPRISES, INC. D/B/A K. HOVNANIAN HOMES, K. HOVNANIAN AT PHILADELPHIA I, LLC, AND INTECH CONSTRUCTION, INC., APPELLEES



Appeal from the Order Entered August 13, 2010, Court of Common Pleas, Philadelphia County, Civil Division, at No. 3049 February Term, 2010.

The opinion of the court was delivered by: Shogan, J.:

J-A18027-11

BEFORE: STEVENS, P.J., SHOGAN and ALLEN, JJ.

OPINION BY SHOGAN, J.:

Appellants, purchasers of condominiums at the National at Old City Condominium in Philadelphia ("Unit Purchasers"), appeal the order granting the preliminary objections of Appellee, Hovnanian Enterprises, Inc. ("Hovnanian"), and transferring this matter to binding arbitration. *fn1 After careful consideration, we reverse.

The trial court set forth the facts and procedural history of this matter as follows:

On February 23, 2010, plaintiffs Joseph O'Donnell, individually and on behalf of all others similarly situated ("The Plaintiffs"), filed a class action complaint against the Hovnanian Defendants and against Intech Construction, Inc. (together, "The Defendants"). The class action pertains to the Plaintiffs' purchases and occupancy of condominium units at The National at Old City ("The National") condominium complex in

Philadelphia, PA. The Plaintiffs had set forth various complaints concerning the common elements at the National, and concerning the design, construction, maintenance and operation of the complex.

On August 18, 2005, the Hovnavian Defendants prepared and issue[d] a public offering statement. In that statement, they made certain representations about the condominium fees that homeowners would have to pay to operate and maintain the common elements at the National West. Section B of the amended public offering states provided [sic] that the executive board of the condominium association would assess charges against each unit for maintenance of the common elements and for the operating costs of the condominium, and that utility charges for the common elements and recreation facilities would be billed to the condominium association and paid as part of the common charges. The Plaintiffs allege that the Hovnanian Defendants intentionally misrepresented these costs in order to induce them to purchase units in the National. The Plaintiffs further allege that the Hovnanian Defendants have made subsequent misrepresentations regarding the amount of certain fees and the purposes for collecting such fees. The Plaintiffs also named Intech Construction, Inc. as a defendant, because they allege that Intech Construction, Inc. was engaged by the Hovnanian Defendants and that it constructed a defective parking garage.

The class action complaint is in the following counts:

I. Fraud (against the Hovnanian Defendants)

II. Unfair Trade Practices and Consumer Protection Law violations (against the Hovnanian Defendants)

III. Negligent misrepresentation (against the ...


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