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Michael J. Metts and Wendy D. Metts, H/W v. Flm Development Co.

March 30, 2012


The opinion of the court was delivered by: Henry S. Perkin, M.J.


Presently before the Court are two Motions to Dismiss Plaintiffs' Second Amended Complaint, which contains the following claims against all Defendants: Negligence (Count I), Negligent Misrepresentation (Count II), Intentional Misrepresentation (Count III), Breach of Contract (Count IV) and Breach of Implied Warranty of Habitability (Count V). In the first filed Motion, Defendants FLM Development Co., Inc. ("FLM") and Jay-Scot Builders, Inc. ("Jay-Scot Builders") move for dismissal of all claims against them on various theories. In the second Motion to Dismiss, Defendant Frank Provanzo ("Mr. Provanzo") moves for dismissal of all claims against him on the basis that Plaintiffs have not pled facts sufficient to establish his personal liability or sufficient to support piercing the corporate veil of Jay-Scot Builders and FLM. For the following reasons, the Motions to Dismiss will be granted in part and denied in part.


This action arises out of a Standard Agreement for the Sale of Real Estate ("Agreement of Sale") entered into on June 12, 2008, by Plaintiffs Michael and Wendy Metts ("the Metts" or "the Plaintiffs") as Buyers and Jay-Scot Builders as Seller for the purchase of real property located at 635 Melissa Lane, Lot 34, Mt. Joy, East Donegal Township, Pennsylvania ("Lot 34") within a planned community development known as "The Reserve at Union School." Defendant Frank J. Provanzo ("Mr. Provanzo") signed the Agreement of Sale on behalf of the Seller, Jay-Scot Builders. On June 30, 2008, settlement was reached on the sale of Lot 34 and the dwelling built on Lot 34. The June 30, 2008 "Settlement Statement" lists FLM and Jay-Scot Builders as the Sellers despite the June 12, 2008 Agreement of Sale listing only Jay-Scot Builders as the Seller.

The Agreement of Sale contains a mediation provision at Paragraph 32 which provides the following:

(A) Unless otherwise checked in paragraph 32(D), Buyer and Seller will submit all disputes or claims that arise from this Agreement to medication in accordance with the Rules and Procedures of the Home Sellers/Home Buyers Dispute Resolution System. Any agreement reached through mediation and signed by the parties will be binding (see Information Regarding Mediation).

(B) Buyer and Seller have received, read and understand the Rules and Procedures of the Home Sellers/Home Buyers Dispute Resolution System.

(C) Any agreement to mediate disputes or claims arising from this Agreement will survive settlement.

(D) G MEDIATION IS WAIVED. Buyer and Seller understand that they may choose to mediate at a later date should a dispute or claim arise, but that there will be no obligation for any party to do so.

Compl., Ex. A., ¶ 32 (emphasis added). Attached to the Agreement of Sale is a separate page entitled "Information Regarding Mediation (Paragraph 32: Mediation) Dispute Resolution System Rules and Procedures." Some pertinent provisions of the Dispute Resolution System Rules and Procedures follow:

1. Agreement of the Parties. The Rules and Procedures of the Dispute Resolution System (DRS) apply when the parties have agreed in writing to mediate under DRS. The written agreement can be achieved by a standard clause in an agreement of sale, an addendum to an agreement of sale, or through a separate written agreement.

4. Mediation Fees. Mediation fees will be divided equally among the parties and will be paid before the mediation conference. The parties will follow the payment terms contained in the mediator's fee schedule.

6. Conduct of Mediation Conference. The parties attending the mediation conference will be expected to:

a. Have the authority to enter into and sign a binding settlement to the dispute.

b. Produce all information required for the mediator to understand the issues of the dispute. The information may include relevant written materials, descriptions of witnesses and the content of their testimony. The mediator can require the parties to deliver written materials and information before the date of the mediation conference.

Compl., Ex. A, p. 17 (emphasis added). Plaintiff did not attach the Warranty Agreement to the Second Amended Complaint but Defendants FLM and Jay-Scot Builders attached to an Affidavit of Mr. Provanzo submitted in support of the Motion to Dismiss a "One-Year Limited Warranty Agreement" which was executed by the Plaintiffs and Mr. Provanzo on behalf of Jay-Scot Builders on June 30, 2008, the date of settlement. See Provanzo Affid., Ex. B. This Limited Warranty Agreement provides the following:

5. In addition to any provisions set forth herein, the following items are not covered by this Warranty:

D. Loss or damage caused by acts of God, including but not limited to fire, explosion, smoke, water escape, changes in the level of underground water table,. Glass breakage, windstorm, hail, lightening [sic], falling trees, aircraft, vehicles, flood and earthquakes, etc.

O. Settling of the Home (unless such settling shall cause structural damage), earth in and around foundation, utility trenches, basement door and window entry systems, or any other excavated and filled area on the Premises.

7. Owner agrees that Builder shall not be responsible or liable for any damage to mechanical equipment, personal property of [sic] any other materials stored in the basement or elsewhere in the Home resulting from any other foregoing conditions, it being understood that the maximum liability of Builder under this warranty shall be the replacement or repair of the defective portion of the Home.

8. The Owner shall promptly contact Builder regarding any disputes involving this Agreement. If discussions between the parties do not resolve such dispute, then the parties agree to submit such dispute to binding arbitration under the Pennsylvania Uniform Arbitration Act, 42 Pa. C.S.A. § 7301, et seq. The arbitration shall be heard and decided by a panel of three arbitrators, one to be appointed by each party, and the third to be appointed by agreement of the arbitrators appointed by the parties. If the arbitrators appointed by the parties cannot agree on the third arbitrator, then the third arbitrator shall be appointed as provided for by the Pennsylvania Uniform Arbitration Act. The arbitrators, once appointed shall establish a schedule for the arbitration that will result in the issuance of a final decision by the arbitrators not later than six months after the date of the appointment of the third arbitrator. The arbitrators' award shall be final and binding. The arbitration shall take place in Lancaster, Pennsylvania, unless the parties otherwise agree.


11. Builder and Owner agree that this warranty on the Home is in lieu of all WARRANTIES OF HABITABILITY OR WORKMANLIKE CONSTRUCTION or any ...

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