Judges Opinions, — December 21, 2016 10:00 — 0 Comments

N.S. Johnson, Inc., v. David Souder No. 2014-00513

Civil Action-Law-Heating and Air Conditioning-Residential Installation-Breach of Contract-Motion for Summary Judgment-Gist of the Action Doctrine-Express Warranty-Peaceful Enjoyment of Property

The parties entered into an agreement regarding Plaintiff’s installation of geothermal heating, ventilation and air conditioning equipment in Defendant’s home. Following completion of the project, Plaintiff filed a Complaint alleging that Defendant failed to make all required payments due under the agreement. Defendant filed a Counterclaim containing counts in Negligence, Breach of Warranty and Peaceful Enjoyment of Property. Plaintiff filed a Motion for Partial Summary Judgment seeking dismissal of Defendant’s Counterclaim.

1. The purpose of summary judgment is to eliminate cases prior to trial where a party cannot make out a claim or defense as a matter of law after the completion of relevant discovery.

2. Summary judgment should be entered whenever the pleadings, depositions, answers to interrogatories, admissions and affidavits demonstrate that there is no issue of material fact and the moving party is entitled to judgment as a matter of law.

3. Summary judgment should be granted only where the right is clear and free from doubt, and any doubt must be resolved against the moving party.

4. Since Defendant’s Counterclaims for Negligence and Breach of Contract overlap with no material distinction, Defendant’s Counterclaim for Negligence is barred by the “gist of the action” doctrine, as the failure to install a property operating system was the very essence of the agreement between the parties.

5. In light of the fact that there is an express warranty present in the agreement and Defendant has raised a question or material fact regarding the condition of the equipment installed pursuant to the agreement, an issue of material fact exists whether Plaintiff breached the warranty in the agreement so as to sustain Defendant’s Counterclaim for Breach of Warranty.

6. Defendant’s Counterclaim seeking damages for loss of enjoyment of his property cannot be sustained based upon allegations regarding the temperature of his home, as there was no actual damage to his home and he has been able to reside in his home after the alleged negligence occurred.

L.C.C.C.P. No. 2014-00513, Opinion by Charles T. Jones, Jr., Judge, June 23, 2016.

IN THE COURT OF COMMON PLEAS

OF LEBANON COUNTY, PENNSYLVANIA

CIVIL DIVISION No. 2014-00513

N.S. JOHNSON, INC., Plaintiff

v.

DAVID SOUDER, Defendant

ORDER

AND NOW, this 23rd day of June, 2016, after careful consideration of the record and the oral arguments set forth by the parties on April 1, 2016, Defendant’s Motion for Partial Summary Judgment is hereby GRANTED in part and DENIED in part.

BY THE COURT:

CHARLES T. JONES, JR., J.

APPEARANCES:

Rich Raiders, Esquire For Plaintiff

Michael S. Bechtold, Esquire For Defendant

OPINION BY JONES, J.:

Before this Court is Defendant’s Motion for Partial Summary Judgment.

FACTUAL HISTORY

N.S. Johnson, Inc. (herein “Plaintiff”) is a Pennsylvania corporation based in Palmyra, Pennsylvania. David Souder (herein “Defendant”) is an individual residing in Lebanon, Pennsylvania. Defendant contracted with Plaintiff to have Plaintiff install heating, ventilation and air conditioning (herein “HVAC”) equipment in Defendant’s home.

The parties entered into an agreement that the project would be completed in two phases. During the first phase of the project, a dispute arose concerning the length of the project and the hours that were to be billed. Plaintiff alleges that after the dispute, Defendant refused to pay for the first phase of the installation. Due to Defendant’s refusal to pay, Plaintiff refused to work on phase two of the project. As a result of the dispute, the parties orally agreed on the hours that were to be billed for the first phase of the project.

Due to the dispute concerning phase one, the parties entered into a written agreement for phase two of the project. The written agreement is dated September 19, 2012, was signed by Defendant on October 2, 2012. Plaintiff completed the second phase of the project pursuant to the contract. On November 11, 2012, Plaintiff presented an invoice to Defendant for the amount of ten thousand, nine hundred eighty-seven dollars and eighty-seven cents ($10,987.87). Plaintiff alleges that Defendant has failed to make payments on the first and second phases of work.

PROCEDURAL HISTORY

Plaintiff filed a Complaint on March 13, 2014, seeking compensatory damages from Defendant. Defendant filed Preliminary Objections on April 28, 2014. Plaintiff filed an Amended Complaint on May 19, 2014. Defendant filed Preliminary Objections to the Amended Complaint on June 9, 2014. In an Order and Opinion dated October 17, 2014, the Court partially granted and partially denied Defendant’s Preliminary Objections. Plaintiff was granted the opportunity to amend the Amended Complaint.

Plaintiff filed a Second Amended Complaint on November 17, 2014. Defendant filed new Preliminary Objections on December 18, 2014. On January 21, 2015, Plaintiff answered the Preliminary Objections to Plaintiff’s Second Amended Complaint. On April 21, 2015, this Court granted Defendant’s Preliminary Objections to Plaintiff’s Second Amended Complaint.

On May 8, 2015, Defendant filed an Answer, New Matter and a Counterclaim. On May 27, 2015, Plaintiff filed an answer to the Counterclaim and raised New Matter concerning affirmative defenses. On February 2, 2016, Plaintiff filed a Motion for Partial Summary Judgment regarding Defendant’s counterclaims. Oral Argument was held on April 1, 2016. The matter is now ripe for disposition.

STANDARD OF REVIEW

The purpose of summary judgment is to eliminate cases prior to trial where, as a matter of law, a party cannot make out a claim or a defense after the completion of relevant discovery. Eaddy v. Hamaty, 694 A.2d 639, 643 (Pa. Super. 1997). Summary judgment should be entered whenever the pleadings, depositions, answers to interrogatories, admissions and affidavits demonstrate there is no issue of material fact and that the moving party is entitled to a judgment as a matter of law. Pa. R. Civ. P. 1035.1-5.

The moving party has the burden of proving that there is no genuine issue of material fact, and the record must be viewed in light most favorable to the nonmoving party. Thompson Coal Co. v. Pike Coal Co., 412 A.2d 466 (Pa. 1979); Davis v. Pennzoil, 264 A.2d 597 (Pa. 1970). Once the moving party establishes that there is no issue of material fact, the adverse party may not rest upon the mere allegations or denials of the pleadings but must file a response. Pa. R. Civ. P. 1035.3. Summary judgment should only be granted where the right is clear and free from doubt, and any doubt must be resolved against the moving party. Musser v. Vilsmeier Auction Co., 562 A.2d 279, 280 (Pa. 1989); Davis v. Pennzoil, 264 A.2d 597 (Pa. 1970).

DISCUSSION

Plaintiff’s Motion for Partial Summary Judgment alleges that Defendant is not entitled to relief concerning Counts I, II, and III. This Court shall address each Count referenced in Plaintiff’s Motion for Summary Judgment separately.

Count I: Negligence

Plaintiff argues that Defendant may not plead negligence in a contract dispute. Plaintiff argues that Pennsylvania courts use the “gist of action” doctrine to determine if a tort action arising in contract can be pursued in tort. In support of its argument, Plaintiff cites eToll, Inc. v. Elias/Savion Advertising, Inc., 811 A.2d 10 (Pa. Super. 2002). Plaintiff argues that in eToll, the court sought only to permit tort claims to proceed in breach of contract actions when the tort claim contained different issues than the contract claim. Id. Plaintiff further argues that Defendant did not add any material facts to the Breach of Contract Counterclaim that were not already established by Defendant in the Negligence Counterclaim. Plaintiff asserts that because there is no meaningful distinction between the two claims, Defendant may only pursue the Breach of Contract claim.

Additionally, Plaintiff argues that Pennsylvania courts prohibit economic loss recovery in tort without proof of physical injury or property damages. Spivack v. Berks Ridge Corp. Inc., 586 A.2d 402402 Pa. Super. 73, 78 (Pa. Super. 1990), citing Aikens v. Baltimore & Ohio R. Co., 348 Pa. Super. 17, 501 A.2d 277 (Pa. Super. 1985). Plaintiff argues that in this case, Defendant has not averred personal injury or property damage proximately caused by Plaintiff, therefore, Count I of Defendant’s Counterclaims should be dismissed in its entirety.

Defendant argues the Pennsylvania Supreme Court has more recently refined its analysis of the “gist of the action” doctrine in Bruno v. Erie Ins. Co., 106 A.3d 48 (Pa. 2015). In Bruno, the Court held that the existence of a contract between the two parties does not prohibit a party from filing a claim for negligence. The court in Bruno further stated that to determine whether a claim is based in tort or contract, the court must determine the primary nature of the duty alleged to have been breached. Id.

Defendant argues that Plaintiff had a duty to properly install the geothermal system at Defendant’s home, and Plaintiff had a duty to do so in a workmanlike manner. Defendant further argues that “Regardless of the terms of the parties’ contract, the duty to perform in a workmanlike manner is a duty which arise incidental to a contract from construction.” (Defendant’s Brief in Opposition to Plaintiff’s Motion for Partial Summary Judgment, pg. 7). Defendant asserts that it is possible a jury would determine that Plaintiff breached a duty that was owed to Defendant that was not created by the contract between the parties, therefore, Defendant’s claim for negligence should not be dismissed.

Further, Defendant argues that Defendant is alleging that Plaintiff’s breach of the duty caused incidental damages to his property. These incidental damages include, increased costs to maintain a reasonable temperature in the home, cost of having a third party investigate the heating and cooling problems, and costs or removing, repairing and replacing drywall. Because Defendant is asserting that Plaintiff caused incidental damages to his property, Defendant argues that this tort action is not prohibited. Defendant also claims that the Counterclaim should not be dismissed because there are issues of material fact.

This Court finds that Defendant’s Counterclaim for Negligence and Defendant’s Counterclaim for Breach of Contract overlap with no material distinction, and therefore, Defendant’s tort claim is barred by the “gist of the action” doctrine. Although Defendant argues that Plaintiff breached his duty to perform in a “workmanlike manner,” which a jury could find exists regardless of the contract, the Court finds that Plaintiff’s failure to install a properly operating HVAC system is the very essence of the contract between the parties. Because Defendant’s Negligence Claim and Breach of Contract claim both arise out of the same contract between the parties and have no significant distinction, Defendant’s Counterclaim for Negligence shall be dismissed.

Count II: Breach of Warranty

Plaintiff argues that Defendant cannot bring Breach of Warranty sounding in the trade of goods under Article II of the Uniform Commercial Code, 13 Pa. C.S. §§ 2314 and 2315. In support of its argument, cites to Turney Media Fuel, Inc. v. Toll Brothers, Inc., 725 A.2d 836 (Pa. Super. 1999). Plaintiff argues that in Turney, the court held that Contractors providing HVAC services are not subject to breach of warranty claims because they provide a service, and not a good. Id. Plaintiff further states that Defendant may have a Breach of Warranty claim against the general contractor, but not Plaintiff because Plaintiff is a HVAC service provider. Plaintiff argues that Defendant’s Counterclaim for Breach of Warranty should be dismissed.

Defendant argues that in Turney, the court held that implied warranties of merchantability and fitness for a particular purpose were inapplicable, but the court concluded that breach of express warranty could be entertained. Defendant argues that in the present case, the contract between the parties states, “N.S. Johnson provides a one year warranty on installation excluding material and manufacturers parts warranties.” (Defendant’s Brief in Opposition to Plaintiff’s Motion for Partial Summary Judgment, pg. 9). Defendant contends that an express warranty that is provided in the contract between the parties is a basis for which Defendant may assert a claim against Plaintiff.

Further, Defendant states that Defendant has presented evidence that the equipment installed by Plaintiff was below commercial standards, and there is a disagreement between the parties regarding the condition of the equipment that was installed and the standard that was required by the contract pertaining to that equipment. Therefore, Plaintiff’s Motion for Partial Summary Judgment should be denied.

This Court finds that there is an issue of material fact regarding Defendant’s Breach of Warranty Claim. The parties disagree on whether the equipment installed by Plaintiff meets the standard required by the contract. Because there is an express warranty present in the contract and question of material fact regarding the equipment that has been installed, Plaintiff’s Motion of Partial Summary Judgment is denied regarding the Defendant’s Breach of Warranty Counterclaim.

Peaceful Enjoyment of the Property

Plaintiff argues that “peaceful enjoyment of the property” is not a measure of damages recognized in Pennsylvania contract law. Plaintiff further states that Plaintiff believes Defendant attempted to assert a claim of loss of quiet enjoyment, which is recognized under landlord-tenant law, not contract law. Plaintiff argues that Defendant cannot recover under “peaceful enjoyment of the property” under Pennsylvania Law.

Defendant argues that the claim from loss of peaceful enjoyment of his property is analogous with damages for loss of use and enjoyment of his property. Defendant argues that damages for the loss of enjoyment of property is recoverable if the loss of enjoyment is caused by a negligent party. Defendant cites Drussel v. Kaufman Construction Co., 157 A.2d 740 (Pa. 1960) in averring his Counterclaim because in Drussel, the plaintiff was allowed to recover for loss of enjoyment of their property by a negligent defendant. Id. In Drussel, the Defendant, a construction company, engaged in “pile-driving” behind the Plaintiff’s home. The pile-driving caused physical damage to the Plaintiffs’’ home. Due to Defendant’s actions, “walls cracked, joists loosened, concrete surfaces split, plaster broke, wallpaper parted, floors sagged and in many other ways the three dwellings suffered structural strain and breakage.” Id.

This Court finds that, unlike in Drussel, there was no actual damage to Defendant’s home, and Defendant has been able to reside in his home, even after the alleged negligence occurred. The inconveniences that Defendant claims should allow him to recover for enjoyment of property do not rise to the level of the damages caused by negligence in Drussel. Defendant’s inconveniences regarding the temperature of his home do not rise to the level that would allow for recovery for loss of enjoyment of his property, therefore, Defendant’s Counterclaim for damages under “peaceful enjoyment of property” shall be dismissed.

Count III: Attorneys Fees

Plaintiff argues that Defendant is not entitled to attorneys fees. Defendant is not

seeking to recover attorneys fees in this matter, therefore, the issue of attorneys fees does not need to be addressed by this Court.

CONCLUSION

For the reasons set forth above, Defendant’s Motion for Partial Summary Judgment is granted in part and denied in part. Defendant’s Counterclaims for Negligence and Peaceful Enjoyment of the Property are hereby dismissed. An Order will be entered consistent with the foregoing.

 

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