Argued June 2, 2015
[Copyrighted Material Omitted]
Appeal from the Judgment Entered August 26, 2014 of the Court of Common Pleas, Delaware County, Civil Division, No.: 12-051685. Before BURR, J.
Nancy L. Wright, Media, for appellant.
Thomas J. Gregory, Philadelphia, for appellees.
BEFORE: LAZARUS, OLSON, and PLATT,[*] JJ.
Appellant, Govindaraju Ramalingam, appeals from the judgment entered, after a bench trial, in favor of Appellees, Keller Williams Realty Group, Inc. and Keller Williams real estate agent, Janet Palladino, defendants at the trial. Appellant personally handed over to the builder his check as a deposit for the construction of a house, as required in the agreement of sale he signed. Nevertheless, he maintains that Appellee Palladino was liable for not placing his deposit payment into escrow, or advising him to do so. We conclude that the trial court correctly decided that Appellant waived any rights to escrow by accepting and complying with the builder's direct deposit requirement. Accordingly, we affirm.
The trial court did not provide findings of fact. We derive the facts pertinent to disposition from our independent review of the record.
On September 30, 2009, Appellant (" Buyer" ) signed an " Agreement of Sale For New Construction" for a house to be built on a lot at 23 Calabrese Drive in Media, Pennsylvania by CLM Builders, Inc. (Seller). (See Plaintiff's Exhibit 3).
" Miscellaneous Provision No. 1" of the agreement provided as follows: " Buyer agrees the deposit shall be paid directly to the Seller and will be used toward the construction of buyer's specific property." (See id. at 7 (emphasis added); see also Plaintiff's First Amended Complaint, 8/22/12, Exhibit A, at unnumbered page 8; Trial Ct. Op., at 18). The agreement was approved on behalf of Seller, CLM Builders, Inc., by Stephen Lynch. Appellee Palladino witnessed both signatures.
Appellant also initialed and signed a broker agreement, captioned " Business Relationship Between Broker and Buyer," dated September 30, 2009. (See Plaintiff's Exhibit 1). Ms. Palladino signed in acceptance on behalf of Keller Williams. The agreement provided in pertinent part that the broker (Keller Williams) may also represent the Seller. (See id. at 1,
¶¶ 3, 4). Appellee Palladino was designated the " licensee" of the broker. Section 10 of the broker agreement, DEPOSIT MONEY, in pertinent part provided:
(A) Broker will keep (or will give to the listing broker, who will keep) all deposit monies that Broker/Licensee receives in an escrow account as required by the real estate licensing laws and regulations until the sale is completed or the agreement of sale is ended. Buyer agrees that Broker may wait to deposit any uncashed check that is received as deposit money until Buyer's offer has been accepted.
(Id. at 2 ¶ 10) (emphasis added). The broker agreement also included the following notice to the buyer:
EXPERTISE OF REAL ESTATE AGENTS Pennsylvania real estate agents are required to be licensed by the Commonwealth of Pennsylvania and are obligated to disclose adverse factors about a property that are reasonably apparent to someone with expertise in the marketing of real property.
(A) If Buyer wants information regarding the specific conditions or components of the property which are outside the Agent's expertise, Buyer is encouraged to seek the advice of an appropriate professional.
(B) If Buyer wants financial, legal or any other advice, Buyer is encouraged to seek the services of an accountant, lawyer, or other appropriate professional.
(Id. at 3, Notices to Buyers) (emphasis added).
Furthermore, and also on September 30, 2009, Appellant signed a disclosure form regarding dual agency, referencing the agreement of sale of September 30, 2009, and acknowledging that the dual agency had been disclosed to him prior to the referenced offer to purchase. (See Plaintiff's Exhibit 2). The dual agent disclosure notice expressly designated Keller Williams as " Broker and as Dual Agent" which " owes fiduciary duties to both Buyer and Seller[ ]" and named Ms. Palladino as " Designated Licensee" of both Seller and Buyer, respectively. (Id.).
Several days later, on October 5, 2009, again in the presence of Appellee Palladino, Appellant paid $44,990 (ten per cent of
the sale price of the house), by personal check made payable to CLM Builders, Inc., directly to Stephen Lynch, apparently a principal of CLM Builders, along with Thomas Fischer. (See Plaintiff's Exhibit 4).
Appellee Palladino testified that Appellant would not give the check to her, and instead insisted on handing it over personally to Mr. Lynch, necessitating the separate second meeting. (See N.T. Trial, 1/22/14, at 167). Appellant does not dispute handing the check over personally, but claims that he was following the instructions of Ms. Palladino. (See id. at 227) (" I totally relied on my agent. So whatever she said, that's what I did it [sic]." ).
In any event, Appellant soon got embroiled in disputes over construction, including the square footage of the house. He complained that his house was smaller than the adjacent one that he first wanted. (See id. at 181-82). There were also disputes about certain " extras," and changes.
Notably, Appellant apparently wanted a standard second floor laundry room removed and relocated to the basement, the space redesigned, and replaced with the installation of a religious altar. (See Defendants' [Appellees'] Proposed Findings of Fact and Conclusions of Law, 2/25/14, at unnumbered page 3 [3b], ¶ 21; see also Plaintiff's [Appellant's] Proposed Findings of Fact and Conclusions of Law, 3/20/14, at unnumbered page 9 ¶ ¶ 45-48).
CLM Builders apparently objected because of the adjustments of space allocation required to convert the laundry room to an altar room, the extra cost of installation of plumbing fixtures to the basement, and possible difficulties in re-selling the house without second floor laundry facilities if the deal fell through (which, in the event, it did).
In his proposed findings of fact, Appellant stated that he retained a lawyer, Raymond Falzone, Esq. in June of 2010. (See Plaintiff's Proposed Findings of Fact and Conclusions of Law, 3/20/14, at unnumbered page 7, ¶ 28). Mr. Falzone sent a demand letter to CLM and Keller Williams. (See Plaintiff's Exhibit 5, Letter of Raymond J. Falzone, Jr. to Steve Lynch, CLM Builder [sic]; and Janet Palladino, Keller Williams, 6/08/10). The letter itemized numerous issues of disagreement and threatened litigation if there was no response in seven days. (See id. at unnumbered pages 1-4).
The letter did not contain a specific " grand total" but included a demand for a credit of at least $49,014.80 (for the reduced square footage), and other claims which Mr. Falzone agreed at trial could have cost up to $70,000. (See N.T. Trial, at 115).
Attorney Falzone also testified at trial that if he had been retained in advance of the agreement of sale (rather than after the fact), he would have advised against the deposit of money directly with the builder. (See id. at 108).
However, when asked, over objection of
Appellant's counsel, what his advice would be if the builder refused to sell under those conditions, Mr. Falzone replied, " Then [Appellant would] have to make a decision whether he wanted to go forward with the Agreement of Sale on those terms or want to do something else . . . ." (Id. at 109).
When asked why he did not demand return of the deposit in this matter, Mr. Falzone replied,
" We -- it was past the point . . . . It was already -- the horses were already out of the barn. The money had already been put somewhere with the builder and it was made payable to CLM, so it was -- the money was gone into CLM's coffer, I'm thinking."
(Id. at 112-13; see also Trial Ct. Op., at 12).
While the parties do not agree on how the transaction actually unraveled, based on the record and the trial court's review, neither Appellant nor his counsel demanded return of the deposit from CLM, or requested release from the agreement of sale. (See Trial Ct. Op., at 12-13). There was in fact no formal release or termination agreement. ...