from the Judgment Entered February 13, 2019 In the Court of
Common Pleas of Philadelphia County Civil Division at No(s):
BEFORE: MURRAY, J., STRASSBURGER, J. * , and
PELLEGRINI, J. [*]
City Acquisitions, LLC (the LLC) and Noah Ostroff
(collectively, Appellants) appeal from the judgment entered,
following a bench trial, against them jointly and severally
and in favor of John and Devon Sereda. In this breach of
warranty matter, Appellants aver that the trial court erred
in: (1) piercing the corporate veil to find Ostroff
personally liable; (2) finding that the Seredas properly
informed Appellants under the warranty about water damage;
and (3) awarding damages under the Pennsylvania Unfair Trade
Practices and Consumer Protection Law (UTPCPL). Upon review, we
is the president, acting officer, and sole shareholder of the
LLC." Trial Court Opinion, 3/12/19, at 6. In June of
2012, the Seredas prepared to buy a newly-constructed home,
at 1219 N. 3rd Street in Philadelphia, from Appellants, for
the purchase price of $386, 600. On June 27, 2012, the
Seredas completed a pre-settlement walk-through inspection of
the property with their realtor, Ryan Kanofsky. N.T. Trial,
10/3/18, at 61-62, 138, 146. They identified 40 to 50 gaps
between hardwood floor planks on all three floors and marked
them with blue tape. Id. at 61-62, 111, 139, 147.
Some of the gaps were large enough that quarters and nickels
could be placed in them. Id. at 72. The Seredas
prepared a "punch list," or a list of
"cosmetic issues" for Appellants to resolve, which
included the gaps in the hardwood-floors. Id. at 30.
parties closed on the property on July 2, 2012, and the
"punch list" was incorporated into the sale
agreement. N.T. Trial, 10/3/18, at 30. The sale agreement
also included a "Builder's Warranty," to be in
effect for one year from the date of settlement. It provided:
If a defect appears which is covered by this Warranty, [the
Seredas] must submit a written notice to [Appellant]
describing the nature of the problem. . . .
Upon receipt of [the Seredas'] notice of a defect, if the
defect is covered by this Warranty as determined by the
Warranty, [Appellants] will repair or replace said defect at
no charge to [the Seredas.] Said repair work will only be
done by [Appellants] or its subcontractors[. Appellants have]
the sole option and absolute right to choose between repair
or replacement of any defective or damaged item [p]rovided
that doing so the repair is to a reasonably acceptable
workmanlike condition [sic].
Warranty, 7/2/12, at 2; Ex. B to Seredas' Complaint.
August 1, 2012, John Sereda sent an email to Ostroff, again
notifying Ostroff of the gaps in the hardwood floors and
other issues. N.T. Trial, 10/3/18, at 62. According to John
Sereda, Ostroff responded that the gaps were due to
"acclimation of the floors" and that the Seredas
should observe the floors ``[o]ver time . . . and see if
it's expansion and contraction." Id. at 66.
However, the floors did not improve and John Sereda
"continued to notify [Ostroff] of the gapping."
Id. One year later, on August 7, 2013 - "after
two months of [John Sereda] trying to get [Ostroff] out to
[see] the property" - Ostroff visited the home and
observed the gaps. Id. Ostroff then directed
"Ray," the contractor who installed the floors, to
replace three or four hardwood planks in the second-floor
bedroom. Id. at 70-71, 78-79. Thereafter,
however, Ray acknowledged that gaps still existed.
Id. at 71, 78. Meanwhile, the Seredas were advised
by other flooring contractors - and the Seredas told Ostroff
- that sanding and replacement of some planks would not
resolve the gaps, and instead, the entire floor had to be
replaced with new hardwood. Id. at 71, 78, 82-83.
October of 2013, Ostroff sent the Seredas an email, offering
to either have the gaps filled and the floors restained, or
give them a $2, 500 credit. N.T. Trial, 10/3/18, at 70,
73-74. The parties continued to communicate by email for
several months about the floors as well as other construction
issues. On March 28, 2014, John Sereda emailed Ostroff,
requesting information about repairs from the pre-settlement
punch list, and stating he would file a lawsuit if Ostroff
did not provide the information. Id. at 81-81.
Ostroff replied that same day:
"We have your best interests in mind. John, do not
threaten me ever again. I will respond when I have a plan for
you. I am waiting for Ron [a contractor] to get back to me.
If I get any more threats from you, I will turn this over to
my attorney and have him deal with this, and nothing will get
accomplished, and it will cost you a lot of money, time, and
I have also sent you four emails on a credit for the floors
which you have failed to respond to. My offer will not remain
forever. I will be looking for a response on this issue ASAP.
I would like to be done with you and this house ASAP. Thank
Id. at 82.
trial, John Sereda acknowledged that he and his wife had not
responded to Ostroff's previous four emails offering a
credit. N.T. Trial, 10/3/18, at 82. However, after
Ostroff's March 28, 2018 missive, John Sereda rejected
Ostroff's offer. Id. John Sereda reiterated that
the Seredas "have been told by several flooring
installer/contractors, including two of [Ostroff's] own
hired flooring installers, that the floors need to be
replaced throughout the home," and that "[a] $2,
500 credit is not even close to what that will cost."
Id. at 84. He also testified: "We bought things
new, and we wanted the floors to be the way they were
supposed to be, so . . . that's why we rejected"
Ostroff's offer to fill the gaps or give them $2, 500.
Id. at 121.
cross-examination, John Sereda disagreed that Ostroff had
offered "a complete repair of the floor at the
builder's expense." N.T. Trial, 10/3/18, at 121. In
response to Appellants' counsel's continued
questioning, John Sereda explained: "Repairs, no. I
guess you have to define 'repair.' For me, at that
point, . . . a repair would be a full-scale repair, meaning
replacing all the hardwood floors based on the prior context
[sic]." Id. at 121-122. Immediately
following this statement, the trial court observed:
The two of you are disagreeing over an undefined word. One of
you may think "repair" means one thing. The other
has a different definition of "repair."
I think it's pretty clear that the offer to fill in the
gaps, refinish the floor, if you call that a repair, was an
unacceptable repair. The repair that was being sought was
pulling up the floors and putting down new floors.
Id. at 122. Finally, the Seredas presented an expert
report, which opined that the cost to replace the hardwood
floors would be $37, 789. Id. at 167.
unrelated to flooring, in the spring of 2013, the Seredas
observed "cracking" and "separation" in
the bay window frames in their two second-floor bedrooms.
N.T. Trial, 10/3/18, at 50 (testimony of John Sereda), 149
(testimony of Devon Sereda). On April 20, 2013, the Seredas
emailed Ostroff a second "punch list" of 31 items
to be repaired, including the hardwood floors and the
bedroom-windows. Id. at 32-33. With respect to the
windows, Devon Sereda testified that initially there was no
water infiltration, but the "cracking and
separation" grew and, by the fall of 2013, rain water
began coming through the cracks. Id. at 149. In
March of 2014, a contractor, Ron Rooney, at Ostroff's
direction, "tried to fix various parts of the
house," including applying caulk around the bedroom
windows. Id. at 90. After "a couple days,"
however, the caulk "expanded or deteriorated."
Id. at 100. On April 30, 2014, John Sereda emailed
Ostroff that the cracks reappeared in both bedroom windows.
Id. at 95. In another email dated May 3, 2014, John
Sereda notified Ostroff that Rooney told John Sereda that
Rooney should have used - but did not use - silicone caulk;
Rooney further told John Sereda that if "the root of the
issue [was something] other than cracking [at] the entry
point of the water[, ] it was likely out of [Rooney's]
expertise." Id. at 96. Both John and Devon
Sereda testified that Ostroff made no other offer or attempt
to repair the windows. Id. at 102, 152.
time of trial in October 2018, water continued to leak
through the windows, necessitating bowls and towels "to
collect the pools of water when it drips." Id.
at 98-99, 149-150. The Seredas had contractors examine the
windows, and one advised that the cause of the cracking could
not fully be determined unless "the facade is removed
around the window," which would cost more than $20, 000
- an amount that the Seredas could not afford. Id.
at 151. Devon Sereda testified that whenever they anticipate
a rainstorm or go on vacation, they must move all of their
electronic equipment away from the window, and the windows
have caused "a lot of stress and aggravation."
Id. at 152. The Seredas offered an expert report
that estimated the cost to replace the windows as $22, 000.
Id. at 38, 166. The Seredas did not seek damages for
any wood rot or mold in the wall, and requested only that the
windows be repaired. Id. at 151-152, 166.
respect to the trial court's decision to pierce the
corporate veil to find Ostroff severally and jointly liable,
both John and Devon Sereda testified that the only person
they interacted with at the LLC was Ostroff. N.T. Trial,
10/3/18, at 90, 157-158. Devon Sereda stated that their
"dealings were always with [Ostroff]" and that they
"never dealt with anybody else but" Ostroff. N.T.
Trial, 10/3/18, at 156. Devon Sereda stated:
My understanding was that [Ostroff] was our seller. He's
the guy that purchased the lot, and he's the one that we
communicated with throughout the process. I never saw anyone
else. All our meetings regarding the building specs, all of