Troubleshooting Real Estate Transaction Problems Seminar in Philadelphia, PA

Troubleshooting Real Estate Transaction Problems Seminar in Philadelphia, PA on March 2, 2015

Harper J. Dimmerman, Attorney at Law, focuses his law practice of real estate law. He handles both litigation and transactional matters: (215) 545-0600. If you need an attorney for settlement, negotiation, For Sale by Owner (FSBO) transactions or litigation (mechanics’ liens, confession of judgment, partition, trespass, landlord tenant, foreclosure defense, ejectment, quiet title, breach of contract, contract litigation, seller disclosure fraud, home inspection cases, realtor negligence cases, amongst others).

Mr. Dimmerman will be lecturing to other attorneys on the topic of real estate law and ethics. The full outline (copyright NBI 2015) may be accessed here: http://www.nbi-sems.com/Enbi/Faculty/68011.pdf

The outline for the ethics portion is as follows:

  1. Applying Rules of Professional Conduct in Real Estate Practice
  2. Multiple Representation and Conflicts of Interest
  3. Disclosure Requirements
  4. Dealing with Unrepresented Parties
  5. Attorney Fees

 

Philadelphia Quiet Title Lawyer

Philadelphia Quiet Title Lawyer

Harper J. Dimmerman, Attorney at Law, focuses his law practice of real estate law. He handles both litigation and transactional matters: (215) 545-0600. If you need an attorney for settlement, negotiation, For Sale by Owner (FSBO) transactions or litigation (mechanics’ liens, confession of judgment, partition, trespass, landlord tenant, foreclosure defense, ejectment, quiet title, breach of contract, contract litigation, seller disclosure fraud, home inspection cases, realtor negligence cases, amongst others).

According to the Philadelphia Common Pleas Court, an suit to quiet title may be used for the following purpose:

“Quiet Title

An action to quiet title is a lawsuit brought in a court having jurisdiction over land disputes, in order to establish a party’s title to real property against anyone and everyone, and thus “quiet” any challenges or claims to the title. It comprises a complaint that the ownership (title) of a parcel of land or other real property is defective in some fashion, typically where title to the property is ambiguous. A typical ground for complaint includes the fraudulent conveyance of a property, perhaps by a forged deed or under coercion. Unlike acquisition through a deed of sale, a quiet title action will give the party seeking such relief no cause of action against previous owners of the property.”

Keep in mind that if you believe you have been the victim of deed fraud, you have recourse and should act at once.

Philadelphia Confession of Judgment Defense

Philadelphia Confession of Judgment Defense

Harper J. Dimmerman, Attorney at Law, focuses his law practice of real estate law. He handles both litigation and transactional matters: (215) 545-0600. If you need an attorney for settlement, negotiation, For Sale by Owner (FSBO) transactions or litigation (mechanics’ liens, confession of judgment, partition, landlord tenant, foreclosure defense, ejectment, quiet title, breach of contract, contract litigation, seller disclosure fraud, home inspection cases, realtor negligence cases, amongst others).

Pennsylvania’s Rules of Civil Procedure does permit a defendant to challenge a confession judgment, which is mechanism employed by commercial lenders and landlords in the Commonwealth of Pennsylvania. Upon default, the lender or landlord may confess judgment, assuming that the proper contractual disclosures have been made. This remedy is generally perceived as highly draconian, in that the party alleging a default may have the ability to take an immediate judgment against the other party and for substantial sums of money. If you are the defendant in this type of action, it is imperative that you act promptly and assert any and all defenses. A party’s failure to do this could easily result in a crippling judgment against the defendant.

The pertinent Rule of Civil Procedure provides the following:

“Striking off or Opening Judgment. Pleadings. Procedure

(a)(1)  Relief from a judgment by confession shall be sought by petition. Except as provided in subparagraph (2), all grounds for relief whether to strike off the judgment or to open it must be asserted in a single petition. The petition may be filed in the county in which the judgment was originally entered, in any county to which the judgment has been transferred or in any other county in which the sheriff has received a writ of execution directed to the sheriff to enforce the judgment.

(2)  The ground that the waiver of the due process rights of notice and hearing was not voluntary, intelligent and knowing shall be raised only

(i)   in support of a further request for a stay of execution where the court has not stayed execution despite the timely filing of a petition for relief from the judgment and the presentation of prima facie evidence of a defense; and

(ii)   as provided by Rule 2958.3 or Rule 2973.3.

(3)  If written notice is served upon the petitioner pursuant to Rule 2956.1(c)(2) or Rule 2973.1(c), the petition shall be filed within thirty days after such service. Unless the defendant can demonstrate that there were compelling reasons for the delay, a petition not timely filed shall be denied.

(b)  If the petition states prima facie grounds for relief the court shall issue a rule to show cause and may grant a stay of proceedings. After being served with a copy of the petition the plaintiff shall file an answer on or before the return day of the rule. The return day of the rule shall be fixed by the court by local rule or special order

(c)  A party waives all defenses and objections which are not included in the petition or answer.

(d)  The petition and the rule to show cause and the answer shall be served as provided in Rule 440.

(e)  The court shall dispose of the rule on petition and answer, and on any testimony, depositions, admissions and other evidence. The court for cause shown may stay proceedings on the petition insofar as it seeks to open the judgment pending disposition of the application to strike off the judgment. If evidence is produced which in a jury trial would require the issues to be submitted to the jury the court shall open the judgment.

(f)  The lien of the judgment or of any levy or attachment shall be preserved while the proceedings to strike off or open the judgment are pending.

(g)(1)  A judgment shall not be stricken or opened because of a creditor’s failure to provide a debtor with instructions imposed by an existing statute, if any, regarding procedures to follow to strike a judgment or regarding any rights available to an incorrectly identified debtor.

(2)  Subdivision (g)(1) shall apply to (1) judgments entered prior to the effective date of subdivision (g) which have not been stricken or opened as of the effective date and (2) judgments entered on or after the effective date.”

Philadelphia Foreclosure Defense Lawyer

Philadelphia Foreclosure Defense Lawyer

Harper J. Dimmerman, Attorney at Law, focuses his law practice of real estate law. He handles both litigation and transactional matters. If you need an attorney for settlement, negotiation, For Sale by Owner transactions or litigation (mechanics’ liens, confession of judgment, partition, landlord tenant, foreclosure defense, ejectment, quiet title, breach of contract, contract litigation, seller disclosure fraud, home inspection cases, realtor negligence cases, amongst others).

It is critical that you defend the foreclosure litigation immediately, even if you may be endeavoring to achieve a short sale or work out some other agreement with the lender. Failure to respond accordingly will lead to a default judgment being taken against you, thereby making the prospect of resolving the situation amicably far more challenging. The failure to answer the complaint in foreclosure will be viewed by a court as an admission of the truth of all of the bank’s averments, some of which may not be entirely accurate. Finally, assuming that a court will simply permit the borrower to open that judgment and have a second bite at the apple, if you will, is a highly risky assumption.

Philadelphia Real Estate Lawyer

Philadelphia Real Estate Lawyer

Harper J. Dimmerman, Attorney at Law, focuses his law practice of real estate law. He handles both litigation and transactional matters. If you need an attorney for settlement, negotiation, For Sale by Owner transactions or litigation (mechanics’ liens, confession of judgment, partition, landlord tenant, foreclosure defense, ejectment, quiet title, breach of contract, contract litigation, seller disclosure fraud, home inspection cases, realtor negligence cases, amongst others).

Alert:

Philadelphia’s tax abatement program is a wonderful incentive for homebuyers. However, even when these abatements have been approved and advertised as such, buyers are running into a major problem upon taking ownership if the seller/selling entity has other outstanding tax liabilities with the City of Philadelphia. In these instances, the innocent buyer may not receive the benefit of the abatement, potentially costing that buyer(s) tens of thousands of dollars in unanticipated taxes. Thus, even with title insurance, it is essential that a real estate lawyer be engaged prior to closing to ensure that written documentation be obtained from the City of Philadelphia to confirm that the abatement is ripe.

Partition and Philadelphia Real Estate Law

Partition and Philadelphia Real Estate Law by Harper J. Dimmerman, Attorney at Law. Mr. Dimmerman handles real estate litigation and partition matters. Contact him now for a consultation – (215) 545-0600. His office is located in center city Philadelphia, Pennsylvania.

Co-owners of real estate have a right to partition. This is supported by the Pennsylvania Rules of Civil Procedure.

In a Philadelphia Common Pleas Court decision handed down in November, 2012, the trial court was asked to consider a partition claim by an ex-husband. More specifically, ex-husband argued that he still have a right to real estate, despite not having perfecting his economic claims during the divorce proceeding. Post-divorce, ex-husband filed a suit in partition (approximately one year later) and contended that an oral agreement existed which required the preparation and recording of a deed during the marriage; this never happened. The ex-wife denied the existence of such an agreement. The Philadelphia trial court analyzed the statute of frauds, in light of the claim that there was an oral contract. That statute prohibits the creation of interests in any land by parol evidence. This is particularly true where a spouse seeks to compel the specific performance of such a contract by the other spouse. Also, the payments of repairs and mortgage installments does not take the case away from the statute of frauds. Here the ex-husband could not meet the particularly high burden of proof required to prove the existence of an oral contract. These parties were not even tenants by the entireties while they married, stated the trial court.

Bottom line: always get every deal in writing.  

Philadelphia Real Estate Law and Litigation Case

A compelling Philadelphia Real Estate Law and Litigation Case

The following opinion, although not precedential, is noteworthy when considering real estate law in the Commonwealth of Pennsylvania. The matter was remanded to the Philadelphia Common Pleas Court, with an opinion issued by the trial court in October 2014 and the case addressed quiet title, ejectment and constructive trust issues.

Harper J. Dimmerman, Attorney at Law, is also an adjunct professor at Temple University, lecturer to other lawyers on legal topics and handles Philadelphia real estate law matters. He offers free, initial consultations – (215) 545-0600.

J-A09009-14
NON-PRECEDENTIAL DECISION – SEE SUPERIOR COURT I.O.P. 65.37
GERALDINE RENZULLI, IN THE SUPERIOR COURT OF
PENNSYLVANIA
Appellant
v.
FREDERICK RENZULLI AND KRISTIN M.
RENZULLI,
Appellees No. 3148 EDA 2012
Appeal from the Judgment Entered December 18, 2012
In the Court of Common Pleas of Philadelphia County
Civil Division at No(s): March Term, 2011, No. 003016
BEFORE: BOWES, OTT, and JENKINS, JJ.
MEMORANDUM BY BOWES, J.: FILED JUNE 17, 2014
Geraldine Renzulli (“Geraldine”) appeals from the judgment entered in
this quiet title action. The trial court denied Geraldine’s request to order
that certain real estate be transferred into her name, and it also granted a
counterclaim in ejectment that was filed by Appellees herein, who are
Geradine’s son, Frederick Renzulli (“Fred”), and Fred’s wife Kristin Renzulli
(“Kristin”). After careful review, we reverse and remand for further
proceedings.
Typically, this Court first recites the evidence presented by the verdict
winners, which, in this case, are Fred and Kristin. We have elected to
examine the evidence presented by both Appellant and Appellees. This
approach will lead to a better understanding of how the trial court herein
erred in its application of the law and the proper resolution of the appeal. J-A09009-14
– 2 –
Geraldine was married to John A. Renzulli (“John A.”),1
and three
children were born of the marriage: Fred, Fred’s older brother John J.
Renzulli (“John J.”), and Fred’s younger sister Danielle Renzulli. The
property that is the subject of this lawsuit is located at 1830 East Passyunk
Avenue, Philadelphia. Geraldine has resided at 1830 East Passyunk Avenue
since approximately 1986. Originally, Geraldine lived there with her three
children, but they have since become adults and moved elsewhere. It was
undisputed that Geraldine exercised control over the property from 1986
until 2012. She collected and retained the rental income from an apartment
on the first floor, occupied the upper two floors of the house without paying
rent, and maintained the property.
The real estate located at 1830 East Passyunk Avenue was never titled
in Geraldine’s name, nor was it ever titled in the name of her husband
John A. Instead, since 1986, title to the premises was held by various
members of the Renzulli family. When Geraldine instituted this quiet title
action, Fred had title to 1830 East Passyunk Avenue.2
Geraldine averred in
her complaint that she was the rightful owner of said property as Fred held it
in a constructive trust for her benefit. She asked that the court order that
Fred execute a deed to transfer it into her name. Fred and Kristin denied
____________________________________________
1
John A. and Geraldine separated but it is unclear whether they ever
divorced.
2
The house is now worth about $265,000. J-A09009-14
– 3 –
that the property was held in a constructive trust for the benefit of
Geraldine. They also counterclaimed for ejectment and for damages
occasioned by Geraldine’s rent-free occupation of the premises and her
collection of income from the apartment on the first floor.
We will now recite the title transfers that are relevant to this appeal.
On January 29, 1986, Michael Mattiocco deeded 1830 East Passyunk Avenue
to Josephine Rettig. Josephine Rettig is John A.’s mother and Geraldine’s
mother-in-law. On November 9, 1989, Josephine Rettig executed a deed to
the property to her grandsons, John J. and Fred. On October 3, 2007,
John J. transferred his one-half interest in 1830 East Passyunk Avenue to his
brother, Fred. On February 7, 2008, Fred deeded the property to his wife,
Kristin, and on February 22, 2011, Kristin re-transferred the real estate into
her husband Fred’s name.
To establish her entitlement to relief, Geraldine presented the
following evidence explaining each transfer of the property in question.
Josephine Rettig testified as follows. The property was originally transferred
into her name in 1986 as payment for a debt owed to her son, John A. She
said that an unidentified person handed her the deed and told her that it was
from her son. Ms. Rettig explained that John A. had previously told her that
she would be receiving the deed to the property because he was going to be
arrested for drug dealing and feared that the property would be forfeited to
the government if it was placed in his name. At that time, Ms. Rettig agreed
to hold the property for the benefit of John A. and Geraldine so that it would J-A09009-14
– 4 –
not be confiscated by the government and the family would have a place to
reside.
Martin Mattiocco is Michael Mattiocco’s father; Michael is the named
grantor in the 1986 deed to Ms. Rettig. Martin testified as follows. In 1986,
John A., Ms. Rettig’s son, owned a car dealership. Martin purchased a
number of cars from John A. and owed John A. money. At that time,
Martin’s son Michael owned 1830 East Passyunk Avenue and did not want to
maintain it. Michael agreed to give John A. the property in question to
satisfy Martin’s debt to John A. John A. told Martin and Michael that the
property was to be placed in the name of his mother, Ms. Rettig.
John A. confirmed Martin’s description of the events leading to the
transfer of the property to his mother. He stated that Martin owed him
money for cars that Martin purchased from him and that John A. agreed to
accept 1830 East Passyunk Avenue as payment for that debt. John A.
explained that his mother’s name was placed as grantee on the deed since
he “was having a lot of problems at the time with the government and I
figured my wife would have someplace to go and then when I [got] out of
jail I would straighten it all out.” N.T. Trial, 7/31/12, at 45. That witness
specified that all of his other property, including their home and other joint
assets that he owned with Geraldine, had been forfeited to the federal
government as a result of his drug dealing and failure to pay income taxes
on his illegal income. Id. at 70. John A. believed that, if 1830 East
Passyunk Avenue was placed in his and Geraldine’s names, it would also be J-A09009-14
– 5 –
taken by the government, and his family would have nowhere to live when
he went to jail. Id.
Ms. Rettig delineated the circumstances surrounding her execution of
the November 9, 1989 deed transferring the property from herself and into
the names of her two grandsons, John J. and Fred. She was called before a
federal grand jury about whether she or her son owned 1830 East Passyunk
Avenue. She invoked the Fifth Amendment and then called John A., who
was in prison, and told him that she no longer wanted the real estate in her
name. John A. responded to “give it to my two sons, put it for them for
them to hold for me.” Id. at 16. She hired her accountant to prepare the
deed and transferred the title to the premises into the names of John J. and
Fred, who were nineteen and eighteen years old, respectively, at that time.
Ms. Rettig’s testimony was that her reason for transferring 1830
Passyunk Avenue to John J. and Fred was for “them to hold [the property]
for their father and mother.” Id. at 17. Ms. Rettig continued that John J.
and Fred “didn’t even know it. They did not know I had transferred the
property.” Id. They were never shown the deed. Id.
John A. also confirmed this aspect of Ms. Rettig’s testimony. He
related that while he was in jail, his mother called and told him that she
“didn’t want it in her name no more” so he “told her to put it in my kids’
name.” Id. at 48. Danielle was not placed on the deed since she was too
young. John A. testified that John J. and Fred were not told about the 1989
deed. J-A09009-14
– 6 –
In 1986, Geraldine and John A. and the three children moved into
1830 East Passyunk Avenue. John A. subsequently went to prison for tax
fraud and drug dealing. When he was released from jail in 1996, he went to
reside at 1830 East Passyunk Avenue. John A. paid for renovations to the
house both in 1986 and upon his release from prison. John A. was
imprisoned again shortly after 1996 and remained in jail until 2008. After he
was released in 2008, John A. and Geraldine were separated. John A.
testified that he allowed Geraldine to purchase his interest in the real estate
for $10,000. John A. stated at trial that Geraldine did transfer that amount
of money to him in exchange for his agreement to relinquish any ownership
rights to the property that he may have owned.
John J. likewise testified that he, his parents, and his two siblings
moved to 1830 East Passyunk Avenue after the government took their home
in 1986. Id. at 76. John J. thought that the real estate was owned by his
parents. He testified that he did not have any knowledge that, in 1989, the
property was placed in his and Fred’s names and stated that he never saw
the deed. Id. at 77. John J. reported that Fred was arrested in 1999, and,
at that time, John J. first learned that he and Fred had title to the premises
since he executed a paper allowing the house to be used as collateral for
Fred’s bail. Id. at 82. John J. said that he always considered the real estate
to be owned by his mother and father.
John J. described the circumstances surrounding his transfer of his
one-half interest in the real estate into his brother’s sole name. In 2007, J-A09009-14
– 7 –
John J. owned a business that was failing, and he had a significant amount
of debt. Geraldine “told me I want you to take your name off the property
before I get judgments against me on my property.” Id. at 86. Since John
J. was weighing whether to file for bankruptcy and since he considered his
mother to own the property, he followed her instructions and transferred his
one-half interest in 1830 East Passyunk Avenue into the sole name of Fred.
Geraldine’s testimony was consistent with that of her mother-in-law,
John A., and John J. In 1986, John A. told her that he “had acquired the
property from a debt that was owed to him” and that it would be titled in his
mother’s name. Id. at 100. The property was titled in this manner because
John J. “was the target of an investigation” and eventually, they would lose
1830 East Passyunk Avenue if it was titled in their names. Id. Geraldine
continued that, as result of John A.’s criminal activity, they lost their home,
and the Internal Revenue Service placed a tax lien against both Geraldine
and John A. The tax lien was filed in 1993 and amounted to $785,000. Id.
at 102.
Geraldine continued that, after her mother-in-law no longer wanted to
be involved in the property ownership issue, John A. instructed his mother
that the real estate was to be placed in the names of John J. and Fred.
Geraldine related that she never told either of her sons that 1830 East
Passyunk Avenue was in their name. Id. at 103. Geraldine confirmed that
in 2007, when John J. started to experience financial difficulties, she J-A09009-14
– 8 –
instructed him to transfer the real estate into Fred’s name so that it would
not be seized by his creditors. Id. at 117.
Geraldine testified that from 1986 onward, she lived on the premises
rent-free, maintained the property, paid the real estate taxes on it, and
collected the rental from the first-floor apartment. Geraldine related that,
after she and John A. separated, she purchased his interest in 1830 East
Passyunk Avenue for $10,000. She borrowed $5,000 of that amount from
Fred and repaid him. She had $1,000 of her own and borrowed the
remaining amount from other people.
Geraldine explained why the real estate was placed in Kristin’s name in
2008. Fred and Kristin wanted to purchase a bar in Wildwood, New Jersey,
known as the Anglesea Pub. Fred did not have satisfactory credit, so Kristin
planned to secure a loan for the property. Geraldine stated that she agreed
to allow Fred to place the real property into Kristin’s name so that it could be
listed as her asset on her loan application. Id. at 119.
Geraldine insisted that all the record owners from 1986 onward held
the property in a constructive trust for her benefit. She continued that there
was an agreement that the property would be transferred into her name
when the tax lien was removed, in 2009. Id. at 116. She spoke with Fred
in 2009 about getting the property placed in her name. He responded that
John A. owed him $47,000 for an emissions machine that was purchased for
a business that John A. owned. Fred said that Geraldine “had to pay his
father’s bill” before he would give Geraldine the house. Id. at 121. J-A09009-14
– 9 –
Geraldine did not believe that she was liable for this debt since she had
already purchased John A.’s interest in the property. She therefore
instituted this lawsuit to have the property transferred into her name.
In response to this evidence, Fred testified that in 1989, his
grandmother told him that she had made a gift to him and John J. of the
property on 1830 East Passyunk Avenue. N.T. Trial, 8/1/12, at 40. He
insisted that in 2007, John J. transferred his one-half interest in the real
estate to Fred in payment for various loans that Fred had given John J. over
the years. Id. Fred stated that he and his mother Geraldine had an
arrangement whereby she managed the property and that he allowed her to
keep the rent in exchange for maintaining it, and this agreement was
reached when he was eighteen years old. Id. at 41. Fred alleged that he,
not his mother, had given $10,000 to his father, but maintained that it was
to induce his father to cease harassing Geraldine rather than in payment for
any interest that John A. had in the property. Kristin acknowledged that the
property was transferred into her name to enable her to obtain a loan, but
denied that Geraldine was involved in the transaction and gave her
permission for its occurrence.
The trial court entered its verdict on August 13, 2012. Significantly,
the trial court rendered only one credibility determination, which was that
“Geraldine Renzulli was not credible.” N.T. Trial, 8/13/12, at 2. It found
Geraldine unworthy of belief on the basis that she admitted that the
transfers of the property were designed to “frustrate and avoid government J-A09009-14
– 10 –
forfeiture and tax lien procedure as if it were an appropriate legal solution to
her difficulties.” Id. The court also concluded that Geraldine could not
prevail since she “did not have the clean hands required to recover in
equity.” Id. On these two bases alone, the trial court found in favor of
Appellees as to Appellant’s quiet title action, and granted Appellees
ejectment of Appellant from 1830 East Passyunk Avenue. It declined to
award attorney’s fees or damages to Appellees.
In its Pa.R.A.P. 1925(a) opinion, the trial court again indicated its
verdict was premised solely upon its conclusions that Geraldine was not
credible and did not have the clean hands necessary to recover in equity. It
made no credibility rulings as to any other witness. It supported its decision
in this matter based on the fact that Geraldine’s “testimony regarding
ownership of the property was not credible because she admitted to
attempting to defraud the government through forfeiture and tax lien
procedures.” Trial Court Opinion, 1/15/13, at 4. Based upon her admitted
fraud as to the government, the trial court opined that “it was reasonable to
ultimately find that title was never placed, nor intended to be placed in
Appellant’s name.” Id. at 4-5.
This appeal followed denial of Appellant’s post-trial motion and entry of
judgment on the verdict. Appellant raises these contentions on appeal:
1. In an Action to Quiet Title, where the Appellant sought
the Court award her the property in which she had resided for
over 22 years as the real and rightful owner of the property, title
to which was in the name of Appellee, Frederick Renzulli, and
previously in the name Appellee, Kristin Renzulli, was it an abuse J-A09009-14
– 11 –
of discretion and an error law for the Court not to decide the
case on its merits, but instead, find in favor of the Appellees on
their Counterclaim, to be awarded the property as the true and
rightful owners of the property because the Court found
Appellant not credible and lacking in clean hands?
2. Were the reasons why the Court found that Appellant
was not credible and lacked clean hands because she never had
her name on the title to the property because of a forfeiture tax
lien scheme and because she signed the names of others to legal
documents supported in the record, or was it an abuse of
discretion?
3. Did the trial court abuse its discretion, fail to apply the
principles of equity and commit error of law by not examining
the testimony of the Appellees, by not judging their credibility
and their bad conduct under the maxim of the clean hands
doctrine on their Counterclaim, equally and in the same way and
under the same scrutiny as the Court examined Appellant’s
testimony for credibility, and applying the clean hands doctrine
and, in fact, not examining the testimony of the Appellees at all
and awarding Appellees the property?
4. Was it an abuse of discretion, a misapplication of the
rules of equity and error of law to grant Appellee, Frederick
Renzulli, the relief he requested in his Counterclaim of Ejectment
by default, without making any findings on the matter of
Appellee’s claim to real ownership of the property and weighing
the relative equities of the matter, resulting in Appellees’ unjust
enrichment, an inequitable result?
5. Did the trial court misapply the maxim of unclean hands
as to Appellant’s conduct which prevented the Appellant from
having the Court decide the case on the merits and effectively
deciding the merits of the case against her?
6. Did the trial court abuse its discretion and/or commit
error of law in not considering the evidence presented by
Appellant that title to the property was held by Appellees as
constructive trustees for the benefit of Appellant?
7. Did the trial court deny Appellant a fair trial, show bias
and ill will toward Appellant and prejudge this case and prevent
Appellant from completing the presentation of her testimony? J-A09009-14
– 12 –
8. Were the trial court’s findings and Order granting
Appellees’ request for ejectment of Appellant fair and equitable
and according to the principles of equity?
Appellant’s brief at 1-3.
Initially, we ascertain the proper standard of review. An action to
quiet title is a civil action at law. Pa.R.C.P. 1061(a) (“Except as otherwise
provided in this chapter, the procedure in the action to quiet title from the
commencement to the entry of judgment shall be in accordance with the
rules relating to a civil action.”). However, imposition of a constructive trust
is considered an equitable remedy. Robbins v. Kristofic, 643 A.2d 1079,
1083 (Pa.Super. 1994) (“a constructive trust is not a trust in the ordinary
sense of the term but simply an equitable remedy designed to prevent
unjust enrichment”); Hercules v. Jones, 609 A.2d 837, 839 (Pa.Super.
1992) (“request for the establishment and enforcement of a constructive
trust is a matter within the jurisdiction of a court of equity”).
Where a complaint contains a cause of action to quiet title but also
seeks an equitable remedy, the court has jurisdiction to decide both the
legal and equitable causes. Sutton v. Miller, 592 A.2d 83, 85 (Pa.Super.
1991). Since the trial court herein resolved this litigation based upon the
assertion of the equitable remedy of imposition of a constructive trust, we
will employ the equity standard of review, as have all decisions involving
constructive trusts.
When reviewing a decision of the equity court, our standard of review
is very limited, and we cannot disturb the decision of an equity court “unless J-A09009-14
– 13 –
it is unsupported by the evidence or demonstrably capricious.” Mid Penn
Bank v. Farhat, 74 A.3d 149, 153 (Pa.Super. 2013) (citation omitted).
Thus, the equity court’s determination will be affirmed unless it abused its
“discretion or committed an error of law. The test is not whether we would
have reached the same result on the evidence presented, but whether the
chancellor’s conclusion can reasonably be drawn from the evidence.” Id.
We first observe the following. As analyzed supra, the trial court’s
ruling herein was purportedly premised upon its determination that
Geraldine was not credible. It rendered no other credibility rulings.
Meanwhile, the court’s legal resolution of the merits of this matter indicates
that it was based upon the truth of Geraldine’s testimony. Specifically,
Geraldine stated that title was never transferred into either her or her
husband’s name to avoid the federal tax lien, but that it was everyone’s
intent that she be the equitable owner of the property. Although indicating
that she was not a credible witness, the trial court based its merits decision
on the truth of what she reported. It stated that a constructive trust could
not be imposed because Geraldine admitted that title was never intended to
be transferred to her so that it would not be seized by the federal
government. It also decided that, since Geraldine conceded that the titling
of the property was planned so as to avoid the tax lien, she operated with
unclean hands. These legal conclusions cannot be supported unless one
accepts that Geraldine was truthful about how the title scheme operated. J-A09009-14
– 14 –
More importantly, in the context of imposition of a constructive trust
for Appellant’s benefit, it is not relevant if the property was ever intended to
be placed in Appellant’s name. We have specifically observed, “when relief
through imposition of a constructive trust is prayed for, it is not the specific
intent between the parties to create a constructive trust but rather whether
or not imposition of a constructive trust is necessary to prevent unjust
enrichment.” DePaul v. DePaul, 429 A.2d 1192, 1194 (Pa.Super. 1981).
This principle is echoed in the pertinent provisions of the Restatement of
Trusts, which discusses constructive trusts only in comment e to § 1, as
follows:

A constructive trust is a relationship with respect to
property usually subjecting the person by whom its title is held
to an equitable duty to convey the property to another on the
ground that the title holder’s acquisition or retention of the
property is wrongful and that unjust enrichment would occur if
the title holder were permitted to retain the property. See
Restatement of Restitution § 160 [“Where a person holding title
to property is subject to an equitable duty to convey it to
another on the ground that he would be unjustly enriched if he
were permitted to retain it, a constructive trust arises.”] . . .
Both express trusts and resulting trusts are based upon an
intention of the person who creates them. . . . On the other
hand, a constructive trust is imposed, not necessarily to
effectuate an expressed or implied intention, but to redress a
wrong or to prevent unjust enrichment. A constructive trust is
thus the result of judicial intervention and is remedial in
character. J-A09009-14
– 15 –
Restatement (Third) of Trusts § 1 comment e. That comment continues that
the provisions of the Restatement of Trusts are not applicable to constructive
trusts.3
Pennsylvania principles applicable to constructive trusts are consistent:
A constructive trust arises when a person holding title to
property is subject to an equitable duty to convey it to another
on the ground he would be unjustly enriched if he were
permitted to retain it. The necessity for such a trust may arise
from circumstances evidencing fraud, duress, undue influence or
mistake. Id. The controlling factor in determining
whether a constructive trust should be imposed is
____________________________________________
3
Hence, we reject Appellees’ invocation of Restatement (Second) of Trusts
§ 63, and the Pennsylvania cases applying that section. That Restatement
provision states:
(1) Except as stated in Subsection (2), a trust is invalid if the
purpose of the settlor in creating the trust is to defraud his
creditors or other persons.
(2) If the beneficiary of the trust is a third person who at the
time of the creation of the trust had no notice of the fraudulent
purpose of the settlor, he can enforce the trust, except so far as
he is precluded from so doing because of the claims of the
defrauded persons.
The cases Appellees cite involve resulting trusts, which are subject to the
Restatement of Trust and applied § 63. See Policarpo v. Policarpo, 189
A.2d 171 (Pa. 1963); In re Summers’ Estate, 226 A.2d 197 (Pa. 1967);
Galford v. Burkhouse, 478 A.2d 1328 (Pa.Super. 1984). In this case, we
are examining whether a constructive trust was created, and the
Restatement is not applicable. We undoubtedly would be inclined to
invalidate a finding that Geraldine had title to the property if the federal
government, as creditor, sought that remedy. However, that holding would
result from the fact that the transfer was fraudulent as to it. Herein,
Appellees have been unjustly enriched by this scheme and cannot be heard
to complain about fraud that was not perpetrated on them. J-A09009-14
– 16 –
whether it is necessary to prevent unjust enrichment.
One who seeks the imposition of a constructive trust must do so
by clear, direct, precise and convincing evidence. Id.
Hercules, supra at 841 (citations omitted; emphasis added). Nowhere in
its opinion or on the record did the trial court even examine whether
Appellees would be unjustly enriched by their retention of 1830 East
Passyunk Avenue. It thus committed an error of law in resolving this matter
based upon the intent of the parties, which is not pertinent, and in failing to
consider the relevant legal principles. We thus agree with Appellant’s sixth
assertion, which is that the trial court did not apply the proper legal
principles to the evidence presented.
In examining whether a constructive trust was created by the
circumstances, there is no requirement that the transferee of title to the
property that is subject to the trust agree to transfer it to the person with
equitable title. Indeed, we have ruled that the intent of the transferee is
irrelevant. The sole consideration is whether imposition of a constructive
trust is necessary to prevent unjust enrichment. Thus, the question is
whether it would be inequitable for Appellees to retain the property since
they would be unjustly enriched by the present state of the title to 1830 East
Passyunk Avenue.
Appellant presented uncontested evidence that the real estate in
question was purchased with consideration provided by John A., Fred’s
father, and placed in Ms. Rettig’s name. Ms. Rettig’s unrebutted testimony J-A09009-14
– 17 –
was that she did not consider herself the owner of the property. She
understood that she was deeded the property so that there would be a place
for her son and his family to reside since all of their property had been taken
by the federal government. Appellees likewise failed to present any
evidence to contradict the fact that, all the while that the property was
deeded to the various family members, Geraldine resided there and
exercised all rights attendant with ownership of the property for twenty-five
years prior to institution of this action. The trial court did not find
Ms. Rettig, John A., or John J. incredible witnesses.
Also of significance is the fact that the trial court at no point indicated
that it credited any of Fred’s testimony, and, most importantly, his
representation that Ms. Rettig intended to gift him and his brother the
property. Since Ms. Rettig’s unrebutted testimony was that she did not even
consider herself the owner of the property, any finding that she gifted
property that she did not own would be completely illogical and contrary to
common sense. Likewise, Fred’s representation that, at the age of eighteen,
he entered an agreement with his mother and allowed her to manage the
property on his behalf strains credulity.
Appellees did not pay any consideration for the property in question.
From 1986 to 2012, it was the home of Fred’s mother, who exercised all
ownership rights attendant to it. The facts at issue herein unquestionably
establish Appellees hold title to property subject to an equitable duty to J-A09009-14
– 18 –
convey it to Geraldine since they would be unjustly enriched if they were
permitted to retain it and since she has always been treated as its equitable
owner. Since the controlling factor in determining whether a constructive
trust should be imposed is whether it is necessary to prevent unjust
enrichment, and the question of whether there was an intent to create such
a trust is irrelevant, the trial court herein committed an error of law in
connection with its ruling as to whether a constructive trust was created.
We also examine the trial court’s application of the doctrine of unclean
hands. It applied this precept based upon the fact that the property was
placed in various family members names so that Geraldine had a home that
could not be seized pursuant to the federal tax lien. However, as Appellant
correctly asserts in her fifth issue, the doctrine of unclean hands was
improperly invoked by the trial court.
The doctrine of unclean hands has no application in this case. As we
observed in Walacavage v. Walacavage, 77 A.2d 723, 725 (Pa.Super.
1951):
The doctrine of unclean hands affects misconduct in the
matter in suit only, . . . and is available only when the plaintiff in
an equity suit has been guilty of unconscionable or unlawful
conduct respecting the transaction before the court. Comstock
v. Thompson, 286 Pa. 457, 461, 133 A. 638. A strikingly
analogous case is Vercesi v. Petri, 334 Pa. 385, 5 A.2d 563,
565. In that equity proceeding for an accounting, it appeared
that plaintiff and defendant had entered into an oral agreement
of partnership to conduct a restaurant, and all partnership assets
were taken in defendant’s name with the intent on the part of
plaintiff to evade his past creditors. The Court concluded that
the doctrine of unclean hands had no application, and speaking J-A09009-14
– 19 –
through Stern, J., said: ‘One of the limitations of the doctrine of
coming into equity with unclean hands is that the wrong-doing of
the plaintiff must have been in reference to the very matter in
controversy and not merely remotely or indirectly connected
therewith. . . .”
Hence, “the doctrine of unclean hands applies only where the plaintiff’s
wrongdoing directly affects the equitable relations existing between the
parties,” McLaughlin v. McLaughlin, 187 A.2d 905, 907 (Pa. 1963)
(emphasis in original). The doctrine of unclean hands, as noted in
Walacavage, is not applied as between the person with legal title and the
person with equitable title when the property was placed in someone’s name
to avoid creditors.
In this case, Appellant did not operate with unclean hands as to
Appellees. While the people involved in these series of transactions may
have operated with unclean hands with respect to the federal government,
Appellant did not have unclean hands with respect to her dealings with
Appellees. Hence, the trial court committed an error of law in applying the
doctrine of unclean hands herein.
In light of our findings that the trial court failed to apply the proper
principles in determining whether a constructive trust was created, did not
render any credibility determinations other than the one that Geraldine was
not credible when she stated that it was the intent of everyone that the
property would eventually be placed in her name, and that the doctrine of
unclean hands is inapplicable, we must reverse the trial court’s verdict. We J-A09009-14
– 20 –
remand for the trial court to apply the proper principles of law and render
appropriate credibility determinations as to the witnesses who testified at
trial. In light of disposition herein, we need not address Appellant’s
remaining allegations.
Judgment reversed. Case remanded for proceedings consistent with
this adjudication. Jurisdiction relinquished.
Judgment Entered.
Joseph D. Seletyn, Esq.
Prothonotary
Date: 6/17/2014

Real Estate Lawsuit Against Seller – blog post by Philadelphia lawyer

Harper Dimmerman handles real estate law and litigation; his office is located in Philadelphia, Pennsylvania.

A Chester County court just recently sided with a homeowner who sued the prior owner after discovering problems with the house.  Plaintiff brought claims against the previous owner after encountering various flaws in the home. As a result of water damage and leaking, the Plaintiff paid more than $16,000 for repairs. The Plaintiff argued that the seller breached an implied warranty of habitability, breached contract, violated the Unfair Trade Practice and Consumer Protection Law and failed to disclose water leakage problems on the sellers’ disclosure statement. The Court concludes that the implied warranty of habitability had been breached. An implied warranty of habitability is created when a contract to build or sell residential construction is executed. The agreement of sale stated that the property was being sold “in as-is condition” and “without warranty.” However, the agreement did not contain language that was particular enough to waive the implied warranty of habitability.

Real estate law fraud article co-authored by a Philadelphia attorney

Unauthorized reproduction is expressly prohibited. Copyright ALM 2015

“Proving Fraud in a Residential Real Estate Transaction” by Harper J.  Dimmerman  and  James  M.  Lammendola, ” The  Legal  Intelligencer”, Publication date: January  6,  2015 (Real estate law fraud article co-authored by a Philadelphia attorney. The article discusses Pennsylvania’s disclosure laws in a residential real estate deal).

Litigators  know  that  proving  fraud  against  a  seller  in  the  residential  real  estate  context  can  be  challenging and  being  awarded  damages  for  fraud  even  more  so.  The  recent  decision  in  Floyd  v.  Wigfield,  (Oct.  2014, Lehigh  Co.,  No.  2012-­C-­4131),  handed  down  this  past  October,  provides  a  useful  analysis  of  the  facts and  types  of  claims  that  should  be  considered.  The  case  also  serves  as  a  reminder  that  failure-­to-­disclose cases  continue  to  be  litigated  in  our  state.  This  is  so  despite  the  requirement  in  the  1996  Real  Estate Seller  Disclosure  Law  (68  Pa.C.S.A.  Section  7301)  requiring  material  defects  to  be  disclosed  in  writing before  an  agreement  of  sale  for  residential  real  estate  is  signed  as  well  as  the  1968  Unfair  Trade Practices  and  Consumer  Protection  Law  (73  P .S.  Section  201-­1  et  seq.),  made  applicable  to  residential real  estate  transactions  by  the  Superior  Court  in  1987.

The  facts  are  straightforward  enough:  Shannon  Floyd,  Norman  D’Avanzo  and  Ruth  D’Avanzo  (the buyers),  purchased  property  in  Emmaus,  Pa.,  from  Edward  and  Carol  Wigfield  (the  sellers)  on  Oct.  9, 2010.  During  their  ownership,  the  sellers  made  various  improvements  to  the  property,  including  the conversion  of  a  barn  on  the  site  into  multiple  apartment  units  and  alterations  to  the  wastewater  system. The  sellers  were  the  only  owners  in  the  chain  of  title  prior  to  the  sale  to  the  buyers.  They  listed  the property  and  prepared  various  documents,  including  a  required  seller’s  property  disclosure  statement  that did  not  disclose  any  information  on  any  code  violations.  The  property  was  marketed  as  having  two income-­producing  rental  units,  in  addition  to  the  main  residence  being  ready  for  use.

Post-­settlement,  an  issue  arose  with  the  tenants  (the  rental  units  were  occupied  at  the  time  of  the transfer)  and  an  inspection  by  Upper  Milford  Township  exposed  several  violations.  These  violations included  the  fact  that  the  property  had  never  been  approved  for  multiple  rental  units.  The  buyers  sought zoning  relief,  in  the  form  of  a  variance;;  the  request  was  eventually  granted.  But  the  variance  was conditioned  upon  an  inspection  of  each  of  the  rental  units.  In  the  course  of  this  process,  it  was  discovered that  the  septic  system  servicing  the  dwelling  units  was  non-­compliant,  necessitating  a  new,  compliant system  with  an  approximate  cost  of  $40,000.

As  a  result  of  their  reliance  upon  the  disclosures  either  made  or  omitted  by  the  sellers,  the  buyers commenced  litigation  in  the  Lehigh  County  Court  of  Common  Pleas.  The  multicount  complaint  averred common-­law  misrepresentation  as  well  as  violations  of  both  the  Real  Estate  Seller  Disclosure  Law (RESDL)  and  the  Unfair  Trade  Practices  and  Consumer  Protection  Law  (UTPCPL),  inter  alia.  The  thrust of  the  buyers’  suit  was  that  the  sellers  misrepresented  the  condition  of  the  property,  thereby  entitling  them to  actual  damages  amounting  to  the  cost  of  the  septic  system,  treble  damages  and  attorney  fees.

Notably,  at  the  bench  trial,  the  sellers  stipulated  to  the  fact  that  they  knew  permits  were  required  and intentionally  did  not  obtain  them.  The  court  made  an  additional  finding  of  fact  that  the  sellers  represented on  the  disclosure  statement  that  they  were  unaware  of  any  material  defects  on  the  property.  A  material defect  is  defined  by  case  law,  the  RESDL  and  the  disclosure  statement  as  “a  problem  with  residential  real property  or  any  portion  of  it  that  would  have  a  significant  impact  on  the  value  of  the  property  or  that involves  an  unreasonable  risk  to  people  on  the  property.”  Section  7304-­16  of  the  RESDL  includes  “legal issues  affecting  title  that  would  interfere  with  use  and  enjoyment”  in  its  list  of  what  may  qualify  as  a material  defect.  Section  19-­D  of  the  disclosure  statement  requires  disclosure  of  any  zoning,  housing, building,  safety,  or  fire  code  violations.

In  its  conclusions  of  law,  the  court  relied  heavily  on  the  oft-­cited  Pennsylvania  Supreme  Court  case  Bortz v.  Noon,  729  A.  2d,  555  (Pa.  1999),  in  analyzing  the  sellers’  conduct.  There  is  nothing  in  the  opinion  that mentions  a  defense  for  failing  to  disclose  that  the  apartments  were  in  violation  of  zoning  law  but  the sellers  apparently  tried  to  posit  the  defense  that  the  septic  system  functioned  properly.  The  court  noted that  this  defense  was  only  relevant  to  the  “idea  that  [sellers]  never  thought  their  deceit  would  be uncovered.”

Once  reliance  on  a  misstatement  of  fact,  or  concealment  of  a  material  defect  is  established  as  fact,  then the  intent  to  fraudulently  inflate  the  value  of  the  property  is  established  for  the  purpose  of  finding  a material  defect.  As  a  consequence  of  holding  that  both  the  intentional  misrepresentation  and  a  violation  of the  RESDL  occurred,  the  court  granted  the  plaintiffs  compensatory  damages  in  an  amount  sufficient  to bring  the  septic  system  into  compliance.  The  RESDL  allows  actual  damages  under  Section  7311  but  does not  preclude  punitive  damages  or  “any  other  remedies  applicable  under  other  provisions  of  law.”

The  UTPCPL’s  catch-­all  21st  unfair  trade  practice  definition  is  “any  other  fraudulent  or  deceptive  conduct which  creates  a  likelihood  of  confusion  or  of  misunderstanding,”  which  has  been  interpreted  as  requiring proof  of  common-­law  fraud  by  the  Superior  Court  in  2000  in  Booze  v.  Allstate  Insurance,  750  A.2d  877. Section  201-­9.2  also  provides  that  “the  court  may  in  its  discretion,  award  up  to  three  times  the  actual damages  sustained,”  plus  reasonable  attorney  fees.

As  in  many  cases,  the  court  declined  to  award  treble  damages,  which  is  discretionary  under  UTPCPL Section  201-­9.2(a),  despite  an  explicit  finding  of  intentional  conduct,  coupled  with  the  finding  of  fact  that one  of  the  sellers  was  a  former  township  zoning  officer  who  “was  familiar  with  zoning  hearing  procedures, zoning  laws,  building  laws,  and  septic  system  laws.”  The  court  found  treble  damages  inappropriate  but did  not  explicitly  state  its  reasoning.  Nonetheless,  the  court  did  award  about  $20,126  in  attorney  fees, which  was  the  exact  amount  prayed  for  since  said  sum  met  the  four  factors  under  McCauslin  v.  Reliance Finance,  751  A.2d  683  (Pa.  Super  2000).

Floyd  serves  as  yet  another  reminder  of  the  multiple  causes  of  action  available  in  a  residential  failure-­to-­ disclose  case,  the  specific  remedies  attached  to  the  various  claims,  and  that  treble  damages  are  not awarded  as  a  matter  of  course.  Although  the  threat  of  treble  damages  did  not  serve  as  a  deterrent  to  this litigation,  the  threat  of  treble  damages  and  counsel  fees  makes  the  UTPCPL  a  necessary  supplement  to RESDL  and  common-­law  failure-­to-­disclose  claims.

Harper  J.  Dimmerman  is  an  adjunct  professor  at  Temple  University’s  Fox  School  of  Business.  His  office represents  clients  in  various  litigation  and  real  estate  law  matters  and  he  can  be  reached  at harper@hjdlaw.net  or  215-­545-­0600.

James  M.  Lammendola  is  an  assistant  professor  at  Temple  University’s  Fox  School  of  Business  who was  in  private  practice  for  20  years.  He  can  be  reached  at  james.lammendola@temple.edu  or  215-­204-­ 4124.

Real estate law – Is Religious Group Committing a Trespass or Nuisance in Phila.?

Is Religious Group Committing a Trespass or Nuisance in Phila.? by James M. Lammendola and Harper J. Dimmerman, The Legal Intelligencer All rights reserved. ALM 2014. Unauthorized reproductions are prohibited. Published on November 4, 2014. The article addresses real estate law and litigation in Philadelphia County, Pennsylvania.

On Oct. 14, the state Superior Court released its decision in Liberty Place Retail Associates v. Israelite School of Universal Practical Knowledge, (2014 PA Super 233, No. 2557 EDA 2013), and upheld the denial of a request for a permanent injunction, by a Philadelphia Court of Common Pleas judge, to prohibit the weekly demonstrations held by the Israelite School of Universal Practical Knowledge (ISUPK). The demonstrations take place on a public sidewalk, directly abutting one of the five entrances to the Shops at Liberty Place, owned by the Liberty Place Retail Associates L.P. Both the Common Pleas and Superior courts found that neither a trespass nor private nuisance was proven.

The trial court found that the ISUPK demonstrations were protected by the First Amendment and that Liberty Place Retail Associates failed to show that the demonstrations are either a private nuisance or a trespass. Liberty Place raised all three findings as errors of law for Superior Court review. The content of ISUPK’s speech was discussed but the Superior Court did not address the trial court’s finding holding that the First Amendment provides a defense to the Shops’ claims. The Superior Court cited the preference to dispose of cases on non-constitutional grounds.

Anyone living in a major metropolitan area such as Philadelphia is familiar with people exercising their First Amendment right to freedom of speech in some manner. In recent years, the city has seen demonstrations relating to the second Iraq War, the public school system budget cuts and Occupy Wall Street. Although such activities can cause traffic jams and other congestion, these are issues of high relevance. Other demonstrators have views that are overwhelmingly perceived as hateful, such as the Westboro Baptist Church, whose right to shout out the most hateful and loathsome epithets at mourners at military funerals was upheld by the U.S. Supreme Court in an 8-1 decision.

Most would agree that ISUPK falls into the odious category. But it is black-letter law that it is the most controversial and obnoxious speech that is in most need of protection. ISUPK, designated an “extremist” group by the Southern Poverty Law Center, has been exercising its First Amendment rights at the corner of 16th and Chestnut streets at the busiest of the five entrances of the Shops at Liberty Place since Nov. 30, 2012. After the Shops blocked the public sidewalk, ISUPK moved into the setback area—the Shops were under the mistaken belief that it owned the sidewalk outside of its building. A preliminary injunction was issued and ISUPK moved back to the public sidewalk, causing the Shops to seek a permanent injunction prohibiting ISUPK to demonstrate on the public sidewalk. And therein is the crux of the controversy. Are the ISUPK demonstrations held so close to the private setback that they are both a nuisance and a trespass?

Although ISUPK never again entered the setback area, the Shops argued a trespass was ongoing. On appeal, the Superior Court engaged in a de novo and plenary review, analyzing whether the trial court erred in denying the Shops’ permanent injunction request. Also, as in all equity matters, the appeals court gave great deference to the lower court’s factual findings. As to both the trespass and nuisance claims, it should be noted that Pennsylvania has essentially adopted the Restatement of Torts sections in defining these causes of action.

Approximately 15,000 people per day pass through the Shops’ entrances on a given weekday. ISUPK demonstrates on average once a week, usually on a Friday. Its president testified that the site was chosen because of the broad range of people that pass through as well as the juxtaposition of wealth and poverty. In addition to amplified voices, there are ISUPK signs and placards. Its message, a one-page single-spaced excerpt, is contained in the opinion, and is replete with invective against gays, all white people, all Asians and any African-American who does not subscribe to its ideology. ISUPK has never been cited for violating the city code and none of its members have ever been arrested at an ISUPK demonstration; it is undeniable that they are loud.

The Shops’ primary contention was that the passerby and onlookers tended to gather in the private setback area during these demonstrations. It was also argued that ISUPK was aware of the likelihood that its conduct would lead to such an assembly on its property. To succeed in a claim for trespass, the plaintiff must prove that the other party intentionally entered land in the possession of another or caused a third person to do so; harm to any legally protected interest is not necessarily required. As for the intent, a critical aspect of the court’s analysis, the Restatement of Torts concerns itself with an actor’s desire to cause consequences or his or her belief that the consequences are substantially certain to result from certain acts. It is this “substantially certain” aspect of the Shops’ argument with which the appeals court takes serious exception. It was not sufficient to merely posit that ISUPK knew that its conduct would lead to a crowd gathering in the setback area. Rather, the Shops were required to demonstrate, either via persuasive authority or additional proof, that such an outcome was indeed substantially certain. “Mere knowledge of likelihood was legally insufficient proof,” according to the opinion. For the Shops, its inability to produce more evidence proved fatal. As to the private nuisance claim, the Shops took issue with the lower court’s analysis: It limited its analysis to noise level and pecuniary harm. Liberty Place presented no scientific evidence that measured the increased decibel caused by ISUPK or that its activities caused the Shops’ lost profits. More precisely, the Shops contended that the gathering of crowds on private property, as is the case here, is sufficient to warrant relief under this theory.

Summarizing the Restatement as it pertains to nuisance, one may be liable for private nuisance if his or her intentional, reckless or negligent conduct is a legal cause of an invasion of another’s interest in the private use and enjoyment of land. Liberty Place cited a number of Pennsylvania trial and appellate cases favorable to the landowner. Such cases examined nuisance bars, slanderous and abusive language outside of a private residence and a local airport that caused dust, crowds and noise to interfere with the operation of a sanitarium in rural Chester County. All were found inapposite since Liberty Place is in the business of attracting crowds—not keeping them away—the demonstrations are in a public place and ISUPK activities can hardly be compared to a nuisance bar. The mere gathering of crowds is simply not enough in Pennsylvania to warrant relief for private nuisance. A prime commercial location may also be a prime location for a group to aggressively exercise its First Amendment rights. Although one may sympathize with the predicament in which Liberty Place finds itself, a nuisance or trespass still must be proven, no matter how offensive the message of those demonstrating legally in a public place may be. Our courts may be sending a message that a stronger quantum of proof may be necessary in such circumstances for the property owner to succeed in enjoining such demonstrations.