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Commonwealth of Pennsylvania, Acting By Attorney General Thomas W. Corbett, Jr. v. John Reichenbach

February 3, 2012

COMMONWEALTH OF PENNSYLVANIA, ACTING BY ATTORNEY GENERAL THOMAS W. CORBETT, JR.
v.
JOHN REICHENBACH, INDIVIDUALLY, AND D/B/A JOHN REICHENBACH GENERAL CONTRACTING, APPELLANTS
COMMONWEALTH OF PENNSYLVANIA, ACTING BY ATTORNEY GENERAL THOMAS W. CORBETT, JR., APPELLANT
v.
JOHN REICHENBACH, INDIVIDUALLY, AND D/B/A JOHN REICHENBACH GENERAL CONTRACTING



The opinion of the court was delivered by: Patricia A. McCULLOUGH, Judge

Submitted: January 6, 2012

BEFORE: HONORABLE BONNIE BRIGANCE LEADBETTER, President Judge*fn1 HONORABLE PATRICIA A. McCULLOUGH, Judge HONORABLE JAMES GARDNER COLINS, Senior Judge

OPINION BY JUDGE McCULLOUGH

Before the court are the cross-appeals filed by John Reichenbach, individually, and doing business as John Reichenbach General Contracting (Reichenbach), and the Commonwealth of Pennsylvania from the April 1, 2010, order of the Northampton County Court of Common Pleas (trial court) which sustained in part and denied in part a contempt petition filed by the Commonwealth. For the reasons that follow, we affirm.

The trial court‟s findings may be summarized as follows. On November 5, 1996, the Commonwealth and Reichenbach entered into a Consent Petition which was adopted by the trial court. Relevant here, in paragraph one of the Consent Petition, the parties agreed that Reichenbach shall include on all contracts for $25 or more signed in the consumer‟s home a true and correct statement of the buyer‟s right to rescission as required by section 7 of the Unfair Trade Practices and Consumer Protection Law (UTPCPL).*fn2 Pursuant to paragraph three, Reichenbach is required to append to all contracts signed in the home "Notice of Cancellation" forms, properly completed in duplicate, as required by section 7 of the UTPCPL. Paragraph four states that Reichenbach shall promptly refund all monies due and owing when a consumer exercises his or her rescission rights pursuant to section 7 of the UTPCPL. In accordance with paragraph nine of the Consent Petition, Reichenbach forfeited his right or franchise to be a home improvement contractor until he paid $1,250 in costs and a penalty to the Commonwealth. (Finding of Fact No. 1.)

Reichenbach failed to pay the $1,250 but nevertheless continued to engage in home improvement contracting after signing the Consent Petition. On March 12, 2008, Reichenbach entered into a home improvement contract with Elizabeth Schoenauer (Schoenauer) at her residence. The contract pertained to remodeling her kitchen, including the installation of new cabinets, for a price of $14,400, and did not include a Notice of Cancellation form. Reichenbach began working on that contract approximately one month after it was signed. Reichenbach stopped working on the kitchen without purchasing or installing the new cabinets. Schoenauer contacted Reichenbach on numerous occasions to no avail. On September 22, 2008, Schoenauer, through her attorney, terminated her contract. Reichenbach did not return the $14,400 paid by Schoenauer. (Findings of Fact, Nos. 2-13.)

On July 20, 2008, Reichenbach entered into a home improvement contract with Terri Macauley (Macauley) at her residence, which did not include a Notice of Cancellation form. Reichenbach began working on the contract approximately one week after it was signed. Macauley made several adjustments to the contract, and Reichenbach continued to do periodic work on the contract until late November of 2008. Macauley terminated the remodeling contract for dissatisfaction with the work via letter dated March 26, 2009. (Findings of Fact, Nos. 14-20.)

In April of 2009, after receiving complaints from Schoenauer and Macauley, the Commonwealth filed a petition to hold Reichenbach in contempt of the existing Consent Petition, alleging violations of paragraphs one, three through six, nine, and eleven of the Consent Petition and seeking fines and restitution in the amount of $242,650. The trial court held hearings in August and November. On April 1, 2010, the trial court issued a decision and order sustaining the contempt petition for violations of paragraphs one, three, four, and nine of the Consent Petition. The trial court ordered Reichenbach to pay fines to the Commonwealth as follows: $1,250 as required by paragraph nine of the Consent Petition; an additional fine of $1,250 for failing to comply with paragraph nine; $2,500 for his failures with respect to Schoenauer; and $1,500 for his failure with respect to Macauley. The trial court stated that its assessment of fines was intended to encourage Reichenbach‟s future compliance with the UTPCPL and the Consent Petition.

Next, relying on Burke v. Yingling, 666 A.2d 288 (Pa. Super. 1995), the trial court directed Reichenbach to pay Schoenauer $14,400 in restitution. However, the trial court rejected the Commonwealth‟s contention that Macauley was entitled to $67,000 in restitution, concluding that the purpose of the UTPCPL did not extend to circumstances where a customer seeks recovery for an alleged breach of contract. The trial court denied the Commonwealth‟s contempt petition with respect to all other provisions of the Consent Petition. Finally, the trial court concluded that the Commonwealth was entitled to collect costs and attorney‟s fees associated with the proceedings and ordered Reichenbach to pay the Commonwealth $5,000 in costs and counsel fees. Thereafter, the trial court denied the parties‟ motions for reconsideration, and Reichenbach and the Commonwealth now appeal to this Court.*fn3

Reichenbach first argues that the trial court erred in sustaining the contempt petition because the Commonwealth failed to set forth sufficient facts to establish that Reichenbach violated the Consent Petition. According to Reichenbach: he included the required language concerning a customer‟s right to rescission in the contracts; he appended the required Notice of Cancellation forms to the contracts; he orally advised the customers of their rescission rights; and he performed the vast majority of the contract work but was prevented from completing the work by the actions of the customers. In addition, Reichenbach contends that the customers did not exercise their right to rescission. Thus, Reichenbach asserts that, but for his failure to pay the $1,250 fine, which he describes as merely an oversight, he complied with all of the terms and conditions of the Consent Petition. We disagree.

Paragraph one of the Consent Petition specifically states that Reichenbach shall include on all contracts for $25 or more that are signed in the home, a true and correct statement of the buyer‟s right of rescission "as required by Section 7 of the [UTPCPL]."*fn4 Section 7(b)(1) of the UTPCPL states that the buyer shall be provided with:

A fully completed receipt or copy of any contract pertaining to such sale . . . and which shows the date of the transaction and contains the name and address of the seller, and in immediate proximity to the space reserved in the contract for the signature of the buyer or on the front page of the receipt if a contract is not used and in bold face type of a minimum size of ten points, a statement in substantially the following form:

"You, the buyer, may cancel this transaction at any time prior to midnight of the third business day after the date of this transaction. See the attached notice of cancellation form for an explanation of this right.‟ 73 P.S. § 201-7(b)(1) (emphasis added).

Reichenbach included a similar provision in both contracts, in regular font, directly above the space reserved in the contract for the ...


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