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[U] Toll Brothers, Inc. v. Upper Uwchlan Township

Superior Court of Pennsylvania

December 26, 2013

TOLL BROTHERS, INC., AND ORLEANS HOMEBUILDERS, INC.
v.
UPPER UWCHLAN TOWNSHIP AND UPPER UWCHLAN AUTHORITY AND PULTE HOME CORPORATION OF THE DELAWARE VALLEY APPEAL OF: TOLL BROTHERS, INC. TOLL BROTHERS, INC., AND ORLEANS HOMEBUILDERS, INC.
v.
UPPER UWCHLAN TOWNSHIP AND UPPER UWCHLAN TOWNSHIP MUNICIPAL AUTHORITY AND PULTE HOME CORPORATION APPEAL OF: ORLEANS HOMEBUILDERS, INC.

NON-PRECEDENTIAL DECISION

Appeal from the Order December 20, 2012 in the Court of Common Pleas of Chester County Civil Division at No.: 2010-05427-CA

BEFORE: GANTMAN, J., SHOGAN, J., and PLATT, J. [*]

MEMORANDUM

PLATT, J.

In this consolidated appeal, Appellants, Toll Brothers, Inc. and Orleans Homebuilders, Inc., appeal from the order of December 20, 2012, [1] granting partial summary judgment in favor of Upper Uwchlan Township and Upper Uwchlan Township Municipal Authority and Pulte Home Corporation of the Delaware Valley (collectively, Appellees). After careful review, we affirm.

In 2002, all parties to this suit entered into a Sewage Plant Development Agreement ("Sewage Plant Agreement") which contemplated a two-phased construction of a sewage facility that the parties would treat and dispose of sewage generated by planned communities that the parties were developing. Each party had reserve capacity in one, or both, phases of construction depending on when their planned community was to be completed and would require sewage treatment. The plant design and construction costs were divided based on how much capacity a party reserved in the phase. By 2004, Phase 1 had been completed and was operated by the Township. In 2005, it became evident to Pulte that it would need to connect its Windsor Ridge Development to the Phase 1 sewage facility. However, Windsor Ridge was slated for Phase 2 connection. In accordance with the Sewage Plant Agreement, Phase 2 developers were permitted to utilize reserved Phase 1 capacity, provided that certain conditions were satisfied which would set into motion the construction of Phase 2. Pulte connected the Windsor Ridge Development to Phase 1, in September 2009[;] however, Phase 2 construction had not commenced.
At some time in late 2009, a Second Amendment to the Sewage Plant Agreement ("Second Amendment") was contemplated and circulated by the parties. The Second Amendment set forth the plan for construction of Phase 2 and provided releases of all claims regarding the use of Phase 1 sewage treatment capacity. The Township signed the Second Amendment, and both Toll and Pulte partially performed by posting into escrow the financial security required by the Second Amendment.
However, in 2009, before signing the Second Amendment, Orleans filed for bankruptcy, thereby placing on hold the Second Amendment. During the course of the bankruptcy proceedings, Toll argued to the Bankruptcy Court that Orleans was required to assume and execute the Second Amendment as both the Sewage Plant Agreement and the Second Amendment were a "single, integrated agreement." On December 1, 201[0], the Bankruptcy Court agreed and directed Orleans to execute the Second Amendment. On March 16, 2011, Orleans did so.
In April of 2010, Toll commenced the current action alleging that [Appellees] improperly misappropriated [Appellants'] sewage treatment and disposal capacities.
On June 29, 2012, [Appellees ] filed a joint Motion for Summary Judgment and requested that Oral Argument be conducted. On that same date, Toll filed a Motion for Partial Summary Judgment and requested Oral Argument. . . . After responses were filed by the parties, oral argument was held on all motions on October 4, 2012. . . .

(Order, 12/20/12, at 2 n.1). On December 20, 2012, the court entered summary judgment in favor of the Township and Pulte "in regard to all issues with the exception of the issue of sewage disposal capacity." (Id. at 1). On January 16, 2013, the trial court certified the case for interlocutory appeal pursuant to Rule 341(c). See Pa.R.A.P. 341(c) ("When more than one claim for relief is presented in an action . . . the trial court or other governmental unit may enter a final order as to one or more but fewer than all of the claims and parties only upon an express determination that an immediate appeal would facilitate resolution of the entire case. Such an order becomes appealable when entered."). Appellants timely appealed.[2]Toll Brothers raises four questions for our review:

1. Whether as a matter of law the judicial-estoppel doctrine precludes all litigation concerning the validity of the proposed Second Amendment despite Toll Brothers' failure to take an inconsistent position before the bankruptcy court, the bankruptcy court's failure to rule that the proposed Second Amendment was a "valid, enforceable contract, " and Toll Brothers' assertion of good-faith, consistent arguments before the bankruptcy and trial courts[?]
2. Whether as a matter of law the proposed Second Amendment, which is unsigned by three parties, is a binding, enforceable contract despite a provision in the Sewer Plant Agreement, which the proposed Second Amendment purports to modify, requiring all amendments to be signed by all parties[?]
3. Whether genuine issues of material facts preclude the entry of partial-summary judgment based on the supposed enforceability of the proposed Second Amendment where Pulte expressly rejected three of its material terms, Pulte and K. Hovnanian[3] never signed that document to manifest their acceptance, and the only evidence of Pulte's and K. Hovnanian's supposed willingness to be bound by the alleged agreement is the oral testimony of their own witnesses after the commencement of litigation, which is contrary to other evidence in the record[?]
4. Whether the trial court properly shifted to [Appellants] the burden to prove that the proposed Second Amendment was not enforceable, where [Appellees] asserted the existence and validity of the Second Amendment as an affirmative defense to [Appellants'] claims[?]

(Toll Brothers' Brief, at 3-4 (footnote omitted)). Orleans raises four similar questions:

1. Whether judicial estoppel applies to prevent Orleans from proving or asserting that the Second Amendment to the Sewage Plant Development Agreement ("Second Amendment") was not a valid, enforceable contract and that the release in the Second Amendment was ineffectual, even though Orleans took no position in a prior action and even though Toll Brothers' [sic] did not take an inconsistent position that was successfully maintained in the bankruptcy court[?]
2. Whether as a matter of law the Second Amendment, which contained a release, was a valid, enforceable contract, despite [Appellees'] failure to present any evidence that a contract was formed, despite the fact that three out of five parties did not execute the draft of the Second Amendment, and ...

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