Opinion
No. 2313 C.D. 2011
09-07-2012
Diane Williams, Appellant v. Ramos, J.L. & Associates, Inc. d/b/a J.L. Ramos & Associates, Inc. Campbell Thomas & Co. d/b/a Campbell Thomas & Co. Architects and d/b/a CT&C Township of Cheltenham, Pennsylvania and David Kraynik
BEFORE: HONORABLE DAN PELLEGRINI, President Judge HONORABLE P. KEVIN BROBSON, Judge HONORABLE JAMES COLINS, Senior Judge
OPINION NOT REPORTED
MEMORANDUM OPINION BY JUDGE BROBSON
Appellant Diane Williams (Williams) appeals from an order of the Court of Common Pleas of Montgomery County (trial court), sustaining preliminary objections. Williams filed a civil complaint against J.L. Ramos & Associates (contractor), Campbell Thomas & Co., Cheltenham Township, and David Kraynik, Cheltenham Township's Administrator (hereafter, unless otherwise necessary, we will refer to Cheltenham Township and Mr. Kraynik collectively as the Township). The order of the trial court that is the subject of this appeal sustained the preliminary objections filed by the Township. We affirm the trial court's order.
Williams is the owner of property located at 1812 Beech Avenue in the LaMott section of the Township. Williams alleged that she entered into an agreement (the contract) with J.L. Ramos and Associates through the Township's Homeowner Housing Rehabilitation Program (Program). The Program, as it relates to the LaMott area in the Township, provides "homeowner's [sic] in LaMott meeting low and moderate income eligibility requirements, the financial assistance needed to rehabilitate owner occupied residences." (Supplemental Reproduced Record (S.R.R.) at 17a.) The Program requires applicants to submit to an initial evaluation by the Montgomery County Department of Housing and Community Development of their income eligibility for the Program. (Id.) Once approved, the Township becomes responsible for
LaMott is an area within the Township of great historical significance, dating from the settlement there by Quaker families in the 17th century through the years of the civil war, when the area was used as a training camp for African American troops, the largest of such in the nation and the only such training camp in Pennsylvania. The name LaMott is apparently derived from the Mott family, which lived there, and included the abolitionist and women's rights advocate Lucretia Mott. See http://www.historic-lamott-pa.com/content/theearlyfamilies/index.cfm.
The Program is funded through the Montgomery County Affordable Housing Trust Fund. See http://www.cheltenhamtownship.org/docview.aspx?docid=2923.
accomplishing and/or assisting the property owner in the following:
• Processing of any additional paperwork.
• Performing initial inspections.
• Writing scope of work specifications.
• Preparing bid packages for soliciting contractor quotes.
• Sending out bid packages to pre-qualified contractors.
• Reviewing bid responses with property owner and assisting with contractor selection.
• Reviewing and approving change orders.
• Periodic and final inspections.
• Recording mortgages.
• Assuring that all rehabilitation work is completed in a satisfactory and workmanlike manner.(Id.)
Given the historical significance of the area, the objectives of the Program require a homeowner to engage in an initial consultation with the Township's Housing Rehabilitation Consultant (Consultant) for the preparation of a "scaled plan depicting scope of work, which[, after approval by the homeowner (S.R.R. at 23a)] must be submitted for review by the LaMott [Historical and Architectural Review Board]" (Review Board). (S.R.R. at 20a and 23a.) If the Review Board approves the proposal, it will issue a Certificate of Appropriateness for the scope of work described. (S.R.R. at 23a.) The Program permits contractors that are pre-qualified by Montgomery County or Abington Township to submit bids for work that is to be performed under the Program, and it also permits other contractors to submit pre-qualification applications. (S.R.R. at 24a.) The Program requires contractors to provide a one (1)-year materials and workmanship warranty. (Id.) The Township's Consultant prepares bid packages and sends them out to interested contractors and meets with those contractors at the house for the purpose of preparing a bid following an inspection. (Id.) The Program provides owners with the right to select from all valid bidders, but, if the owner selects a bidder other than the lowest bidder, the owner must pay the difference between the lowest bid and the bid of the selected contractor. (Id.)
The Township's Consultant in this case was Robert Thomas, an architect and principal of defendant Campbell Thomas & Co.
Once a bidder is selected, and before work commences, the owner, the contractor, the Consultant, and the Township engage in a pre-construction meeting. As suggested above, the owner must sign a contractor agreement with the contractor and a mortgage note with the Township as Mortgagee. (Id.) Thereafter, the contractor must submit to the Consultant various copies of documents, such as permits, a list of subcontractors, and waiver of liens and/or certifications. (Id.) The Township then will issue a Notice to Proceed. (Id.)
The Consultant bears the responsibility to monitor the progress of the work and to ensure that the work is performed in accordance with the contract agreements and any change orders. Further, in order for a contractor to be paid, the Consultant must "inspect the work to establish, to the best of his ability, that the work appears to be of a workmanlike quality and that sufficient work has been completed to justify a payment." (Id.) The Program provides for necessary but unanticipated work through a change order process. (S.R.R. at 26a.) Such change orders are not effective unless signed by the owner, the contractor, the Consultant, and the Township, and the amount of such change orders cannot exceed ten (10) percent of the accepted bid. (Id.)
The Program also provides as follows regarding work guarantees:
N. Work Guarantee Period
¦ The homeowner and Contractor Agreement stipulate that the Contractor's work is guaranteed for one year from the date of completion. This guarantee shall also include all additional warranties that come from the product manufacturer.
¦ In the event of a problem with any item in the Contractor Agreement occurring during the one-year guarantee period, the Homeowner shall notify the Contractor in writing. The homeowner may also make the Township aware of the problem as well, in writing. However, the homeowner shall contact the Contractor directly in every effort to have the problem addressed. The guarantee is
between the homeowner and Contractor; not the Township.(S.R.R. at 27a.)
¦ In the event of disagreements between the Contractor and Homeowner, the Rehabilitation Consultant will try to assist both parties in reaching a solution. If the Consultant is unsuccessful, both parties have the option to pursue binding arbitration. If neither party wants to pursue binding arbitration, the Township Administration will resolve the matter, and the decision will be final.
In this case, Williams, the contractor, and the Township entered into the contract. In general, the contract mirrors the provisions of the Program noted above. With regard to disputes arising "as a result of [the contract]," the contract provides that disputes "be submitted in writing to the Township Administration for a determination." (S.R.R. at 35a.) The contract provides that if the parties do not accept the determination of the Township Administration, the parties must submit the dispute for "arbitration in accordance with the then current rules of the American Arbitration Association and judgment upon the award rendered by the arbitrator or arbitrators may be entered in any court having jurisdiction thereof." (Id.) Although the contract includes the Township as a party, provisions of the contract make clear that the remedies anticipated in the contract are for disputes between Williams and the contractor. For example, at the end of paragraph 21 of the contract, a sentence provides: "After the arbitrators render a decision and award, the Contractor and the Owner shall execute, acknowledge and deliver to each other agreements specifying the award and how it affects the terms of this Agreement." (Id. at 35a-36a.)
More significantly, paragraph 23 of the contract provides that "[t]he Township Administration shall not be liable to either party for the performance of any term or covenant of this Agreement or for damages for the non-performance thereof." The "Township Administration" has sole responsibility for implementing the Program for LaMott. Paragraph 24 of the contract specifies:
This Agreement is intended solely for the benefit of the Owner and the Contractor and their respective successors and assigns, and no third party shall have any rights or interest in this Agreement. Nothing contained in this Agreement shall be deemed or construed to create an obligation on the part of the Township Administration to any party, nor shall any party have a right to enforce against the Township Administration any right that it may have under this Agreement.(S.R.R. at 36a.) Moreover, Paragraph 29 of the contract further defines the limitations of the Township Administration's responsibility for improperly performed work as follows: "The Township Administration shall be under no duty to examine, supervise or inspect the Work. No default or breach of the Contractor will be waived by any inspection by the Township Administration, nor shall any such inspections constitute a representation that there has been or will be compliance with this Agreement or that the construction is free from defective materials or workmanship." (S.R.R. at 37a.)
Based upon the contract, the Township provided a $25,000 grant to Williams for the purpose of rehabilitating Williams' house under the Program. In accordance with the Program, Williams entered into a mortgage agreement with the Township. The terms of the mortgage provided that the loan of $25,000 would be forgiven if Williams retained title to the property for an eight (8)-year period. If Williams sold the property within four (4) years of the date of the mortgage, she would be required to repay 100% of the loan to the Township. If Williams sold the property within five (5) to eight (8) years of the date of the mortgage, she would be required to pay the Township a prorated amount of one quarter for each year. (S.R.R. at 66a.) Between May and October 2006, the contractor apparently performed most of the work required under the contract.
The record in this case includes a packet entitled "Notice of Exhibits Found in File." This packet includes the documentation the contractor submitted in order to receive payment for work it performed. The packet also includes two (2) change orders. One of the change orders reflects a deduction for shutters in the amount of $7,500, while the other is a deduction for exterior window and door trim repair and paint and for weather stripping for a window or windows in the amount of $810. These change orders are signed by the Consultant, the contractor, and David Kraynik as Township Administrator. Williams did not sign the change orders, which appears to conflict with the requirement in the contract that the owner sign all change orders.
On October 30, 2009, Williams filed her Complaint, naming as defendants the contractor, the Consultant, the Township, and David Kraynik. With regard to the Township defendants, Williams asserted that the Township had responsibilities under the Program and contract to implement, manage, and administer the Program and to ensure that "all rehabilitation work is completed in a satisfactory and workmanlike manner." Williams averred, among other things, that the contractor failed in its responsibilities to perform the work according to the Program manual, failed to complete satisfactorily the work as described in the contract, and failed to perform "in a good workmanlike manner." (Complaint ¶ 5.) With regard to the Consultant, Williams averred that the Consultant failed to meet his obligations, duties, and responsibilities, failed to ensure measures were taken to protect occupants from asbestos dust and debris, and failed to monitor the work and ensure that the contractor performed its work in accordance with the contract.
With regard to the Township defendants, whose preliminary objections are now before the Court, Williams claimed that the Township failed to perform certain responsibilities under the contract, including: failure to implement, manage, and administer the Program; failure to provide homeowners with contractors that could perform quality work under the contract; failure to notify her and require her approval for changes to the work; failure to stop work and withhold disbursements for work that did not comply with the contract or "sound building practice." (Complaint ¶ 7.) Williams also included a negligence claim against the Township, claiming that the Township had acted negligently as follows:
a. Township provided provisions to the Agreement that deprive the Plaintiff the benefits of the Agreement and Program.(Complaint ¶ 10.)
b. [Township] performance outside the provisions of the Agreement deprived the Plaintiff of the benefits of the Agreement and program.
c. [Township] failed to take appropriate action to cure the problems, pursuant to the contract.
d. [Township] operated outside of the Program guidelines and parameters presented to the Plaintiff in the Program manual.
e. [Township] interfered with the Program process as represented to the community and the Plaintiff.
f. [Township] affected change orders without Plaintiff knowledge or signature.
g. [Township] was aware of [the Consultant]'s actions and had the right of control and failed to supervise him.
h. [Township] failed to inspect, meet with and obtain assurance from the Property owner that the work was satisfactorily performed prior to making payments to Contractor.
In the final paragraph of her Complaint, Williams asserts that the defendants breached a duty of care owed to her and that the breach of the duty caused her to suffer "injuries, property damages and costs," and sought compensatory and punitive damages, based upon evidence that she intended to produce at trial. With regard to her breach of contract claim, Williams requested the trial court to order specific performance with regard to the defendants' duties under the contract.
The Township filed preliminary objections to the Complaint, raising the affirmative defense of governmental immunity and citing the language in the contract that precludes liability claims against the Township for actions arising under the contract and the Program. Further, the Township pointed to the arbitration clause in the contract, arguing that Williams failed to employ the mandatory dispute resolution remedy included in the contract.
On December 21, 2009, Williams filed a First Amended Complaint, which included a single clarification to paragraph 10 in her initial complaint. Paragraph 10 encompassed her negligence claim against the Township, and the amendment simply stated, in apparent response to the immunity defense the Township raised in its preliminary objections, that the Township had care, custody, or control of the real and personal property located at Williams' address.
Williams submitted another "shorthand" amendment to her Complaint, captioned "Second Amended Complaint," reflecting clarification of the defendants against which she sought to assert her claims.
The contractor also filed preliminary objections, specifically raising the arbitration clause of the Agreement as a basis for the trial court to dismiss Williams' Complaint with regard to her breach-of-contract claim. With regard to her negligence claims against the contractor, the contractor objected to the lack of factual detail underlying Williams' Complaint, asserting that the factual pleading was so insufficient as to deny the contractor the ability to prepare a defense. This assertion is borne out by review of the Complaint, which does not assert the specific failings of which Williams complains, such as the particular workmanship that was improperly performed and the damages that she allegedly sustained. Williams ultimately fleshed out the particular short-comings and alleged negligence on the part of the contractor in her response to the contractor's preliminary objections. The contractor requested the trial court to either direct a more specific pleading and/or to dismiss the Complaint and direct Williams to proceed to arbitration. Williams, then newly represented by counsel, sent a letter to the contractor dated November 4, 2009, identifying, in accordance with her rights to name an arbitrator under the terms of the contract, a particular attorney to act as plaintiff's arbitrator. The trial court entered an order on June 2, 2010, sustaining the contractor's preliminary objections and decreeing that the matter should be sent to arbitration in accordance with the contract.
In December 2010, a board of arbitrators issued an arbitration award in favor of Williams in the amount of $22,827. The arbitrators, however, concluded that the Township and the contractor were equally responsible for the payment. Because Williams did not name the Township as a respondent in the arbitration action, the arbitrators directed the contractor to pay its share of the total, $11,413.50.
On January 10, 2011, Williams filed a motion for judgment confirming the arbitration award. Williams submitted to the trial court a proposed order, entering judgment against both the contractor and the Township for the amount identified in the award. The proposed order also included an award of fees and costs against the Township of $3,094 and "remaining costs for outstanding damage repairs of real property damages" of $5,950. Further, Williams' proposed order directed the release of the property lien created by the mortgage between Williams and the Township.
In response to this motion, the contractor, in new matter, contended that the arbitrators failed to rule on a defense it had raised involving a proceeding before the Township's Board of Commissioners, during which the Commissioners purportedly released the contractor from further responsibility under the contract after determining that Williams had not carried out her duties under the contract. The contractor asserted that the arbitration panel lacked jurisdiction and requested that the trial court set the award aside and return the matter to the Township for consideration of Williams' complaints. Thereafter, however, Williams filed a motion for sanctions against both the contractor and the Township. In response, the contractor averred that it had tendered a check in the amount the arbitrators awarded to Williams and that she had endorsed the check. Based upon this fact, the contractor asked the trial court to dismiss the motion to enter judgment and the motion for sanctions. Williams, thereafter, filed a "memo" with the trial court, seeking dismissal of her complaint as to the contractor.
In response to this motion, the Township noted that the award was only entered against the contractor and that the Township was not named as a respondent in that proceeding. The Township pointed out that its preliminary objections were still pending. On June 30, 2011, following the submission of legal memoranda by Williams and the Township, the trial court issued an order sustaining the Township's preliminary objections. Williams filed a notice of appeal. At the direction of the trial court, Williams filed a concise statement of matters complained of on appeal, in which she raised the following issues: (1) whether the Township was acting in a proprietary role and therefore not entitled to the defense of governmental immunity; (2) whether the clause in the contract that alleges to divest Williams of any right to pursue a negligence claim against the Township constitutes an unenforceable contract of adhesion; (3) whether, for the purpose of evaluating the Township's immunity claim, the Township was in possession of Williams' property by virtue of the characterization of the Township as a lienholder and "owner;" and (4) whether Williams is entitled to the relief she initially requested that the Township remove the lien it has against her property because the lien diminishes the value of the property.
The trial court concluded that Williams had not established that the conduct of the Township fell within any of the exceptions to governmental immunity. The trial court opined that the only possible exception to immunity—the real estate exception—only applied when the subject realty is within the care, custody or control of real property in the possession of the governmental unit, and that Williams' pleadings failed to establish such care, custody, or control on the part of the Township.
In her brief to this Court, Williams raises the following issues: (1) whether the Township is immune from tort liability; (2) whether Williams "waived" the Township's alleged negligence (which appears to relate to her claim that the contract is an invalid contract of adhesion); (3) whether Williams "waived" the Township's alleged tortious interference; and (4) whether the Township had possession of Williams' property for the purpose of applying the real estate exception to governmental immunity. Our review is, therefore, generally confined to the question of whether the trial court erred in concluding that Williams failed to state a claim encompassing injuries caused by the Township that fall within an exception to the Township's governmental immunity.
This court's review of an order of a trial court sustaining preliminary objections is limited to considering whether the trial court erred as a matter of law or abused its discretion. E. Lampeter Twp. v. Cnty. of Lancaster, 696 A.2d 884 (Pa. Cmwlth. 1987). In considering preliminary objections, a trial court must resolve all doubt in favor of the non-moving party, and only in such circumstances where it appears with certainty that the plaintiff is not entitled to recovery. Id. The trial court need not accept as true pleaded facts that contain unwarranted inferences, conclusions of law, or argumentative allegations or expressions of opinion, but the trial court must accept as true those averments that are well-pleaded, along with all reasonable inferences arising from the well-pleaded facts. Wilson v. Marrow, 917 A.2d 357, 361 n.3 (Pa. Cmwlth. 2007).
Although Williams again argues that the Township cannot rely upon the provision of the contract that precludes her from asserting a negligence action against the Township because such a provision renders the contract an invalid contract of adhesion, Williams does not engage in any discussion of this argument and cites no legal authority in support of this claim. Consequently, we conclude that she has waived this issue. Pa. R.A.P. 2119; Marshall v. Com., 41 A.3d 67, 73 (Pa. Cmwlth. 2012). --------
Section 8541 of the Judicial Code, 42 Pa. C.S. § 8541, provides that "[e]xcept as otherwise provided . . . no local agency shall be liable for any damages on account of any injury to a person or property caused by any act of the local agency or an employee thereof or any other person." Section 8542 of the Judicial Code, 42 Pa. C.S. § 8542, identifies those situations where our General Assembly has elected to permit negligence claims against governmental units and/or their employees acting within the scope of their employment. Among the acts that may impose liability on a local government and/or its employees, only one exception could apply in this case—Section 8542(b)(3) of the Judicial Code, 42 Pa. C.S. § 8542(b)(3), which provides:
Real property.—The care, custody or control of real property in the possession of the local agency, except that the local agency shall not be liable for damages on account of any injury sustained by a person intentionally trespassing on real property in the possession of the local agency.
Williams contends that, with regard to her property, the Township was acting in a proprietary role with regard to her property, and that the Township's conduct falls within the real property exception to immunity. Williams cites County of Butler v. Local 585, 631 A.2d 1389 (Pa. Cmwlth. 1993), in support of her argument. Butler, however, did not arise under the immunity provisions of the Judicial Code. Furthermore, as more fully explained below, the distinction between the proprietary/governmental roles of local governmental units is not applicable in matters involving governmental immunity. See Sherman v. City of Philadelphia, 745 A.2d 95 (Pa. Cmwlth. 2000), overruled in part on other grounds, 598 Pa. 389, 957 A.2d 232 (2008); Poulos v. City of Philadelphia, 628 A.2d 1198, 1201 (Pa. Cmwlth. 1993).
Williams' other argument is that the Township described itself as an "owner" or "lienholder" of the property. Williams suggests that even though the Township is not the legal owner of the property, these alleged self-characterizations are sufficient to establish the Township's care, custody, or control of the property, notwithstanding the fact that the Township does not possess the property. Williams asserts that possession is not necessary to establish ownership. In discussing this argument, Williams relies upon this Court's decision in Lowman v. Indiana Area School District, 507 A.2d 1270 (Pa. Cmwlth. 1986).
In Lowman, this Court rejected a trial court's conclusion that the real property exception did not apply in a situation where a defendant did not own the property that allegedly caused personal injuries. Rather, this Court held that the governmental immunity provision does not shield a local governmental unit from liability if an injury results from the care, custody, or control of property in the possession of a governmental unit. Thus, possession of property, and the possessor's care, custody, or control of property, are the key considerations in analyzing exceptions to governmental immunity.
In this case, the factual allegations in Williams' complaint in no way establish that the Township had possession of her property. Moreover, we disagree with Williams' claim that the Township's position as a lienholder elevates its status to a party with possession of her property. In fact, numerous decisions of this Court hold that the type of possession to which the real property exception refers means "total control over the premises by the local agency; limited control or mere occupation for a limited period of time is insufficient to impose liability." Sweeney v. Merrymead Farm, 799 A.2d 972, 977 (Pa. Cmwlth. 2002). In Sweeney, this Court held that "neither negligent inspection nor failure to inspect constituted possession over real property." Sweeney, 799 A.2d at 978.
Furthermore, even given the Township's potential for a more significant ownership stake in the property (if Williams were to sell her property before the eight-year period elapses, thus providing the Township with the right to execute its lien on the property), the existence of the lien does not itself give rise to possession. In this case, the Township, through the Program, facilitated the intended rehabilitation of Williams' property. The Township did not perform the rehabilitation work, and while it had the power to approve payment for the work ultimately performed by the contractor, its role in the Program, as pleaded in the complaint, in no manner constituted "total control" over the property. Consequently, we agree with the trial court's assessment regarding the application of the real property exception in this case.
As to the final objection Williams raises, regarding the alleged diminution in the value of her property because of the Township's lien, we conclude that Williams has not provided a sufficient basis upon which to address her concerns. The sole argument she presents is: "[The Township]'s $25,000 lien against [Williams'] property diminishes the value of [her] property and in [Williams'] original filing [Williams] asked for relief with regard to that lien." (Williams' Br. at 7.) Williams provides no context with regard to the basis of this statement, and we are unable to discern the substance of any legal argument or discussion. Consequently, we must conclude that this issue is waived. Pa. R.A.P. 2119; Marshall.
Accordingly, we conclude that the trial court did not err in sustaining the Township's preliminary objections, and we affirm the order of the trial court dismissing Williams' Complaint against the Township.
/s/_________
P. KEVIN BROBSON, Judge
ORDER
AND NOW, this 7th day of September, 2012, the order of the Court of Common Pleas of Montgomery County is hereby AFFIRMED.
/s/_________
P. KEVIN BROBSON, Judge