Beaumont Condominium Assoc. v. Brown, J.

J-A13012-17

NON-PRECEDENTIAL DECISION - SEE SUPERIOR COURT I.O.P. 65.37

BEAUMONT CONDOMINIUM IN THE SUPERIOR COURT OF

ASSOCIATION PENNSYLVANIA

Appellee

v.

JEFFREY M. BROWN ASSOCIATES, INC.,

CARSON CONCRETE, CORP., BEAUMONT

CORP., MONTIVUE CONSTRUCTION AND

PENNONI ASSOC., INC.

APPEAL OF: JEFFREY M. BROWN

ASSOCIATES, INC.

No. 2177 EDA 2016

Appeal from the Judgment Entered September 9, 2016

In the Court of Common Pleas of Philadelphia County

Civil Division at No(s): 1896, January Term, 2014

*****

JEFFREY M. BROWN ASSOCIATES, INC. IN THE SUPERIOR COURT OF

PENNSYLVANIA

Appellant

v.

CARSON CONCRETE CORPORATION

Appellee No. 2181 EDA 2016

Appeal from the Order Entered June 7, 2016

In the Court of Common Pleas of Philadelphia County

Civil Division at No(s): 02440, December Term, 2013

J-A13012-17

BEFORE: LAZARUS, J., OTT, J., and FITZGERALD, J.*

MEMORANDUM BY LAZARUS, J.: FILED NOVEMBER 03, 2017

In these consolidated1 appeals (2177 EDA 20162 and 2181 EDA 20163)

Jeffrey M. Brown Associates, Inc. (JMB) appeals from the trial court’s order

granting in part and denying in part its motion for post-trial relief, granting

Appellee Carson Concrete Corporation’s (Carson) post-trial motion, and

striking an award of $62,510.73 in favor of JMB, and from the court’s final

judgment entered in favor of Carson and against JMB. After careful review,

we are constrained to affirm.

Beaumont Corporation (Owner) and Montvue Construction, Inc.

(Builder)4 hired JMB as a construction manager for a project (the “Project”)

at Beaumont Condominiums, a 13-story condominium complex (the

“Building”) located on South Front Street in Philadelphia. Accordingly,

Builder executed a “Standard Form of Agreement Between Owner and

Construction Manager” on June 30, 2003. On March 22, 2004, JMB hired

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*Former Justice specially assigned to the Superior Court.

1 On January 17, 2017, our Court entered an order granting JMB’s

application to consolidate the two cases, 2177 EDA 2016 and 2181 EDA

2016, as they involve related issues and parties. See Pa.R.A.P. 512.

2 Beaumont Condominium Association lawsuit (“Association Action”).

3 Referred to as “JMB lawsuit.”

4 Owner hired Montvue to erect the Building and appurtenances on the

subject property. See Beaumont Condominium Association’s Complaint,

2/3/14, at ¶ 8.

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Carson,5 for $1.8 million, as a subcontractor6 to design and build the entire

concrete superstructure for the Project using a structural system known as

“post-tension” concrete. With this type of tension system, structural support

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5The parties entered into a “Design Build Subcontract” to memorialize this

agreement.

6 In Turner Construction, Inc. v. American States Ins. Co., 579 A.2d

915 (Pa. Super. 1990), our Court explained the nature of this type of

relationship:

Typically when major construction is involved an owner has

neither the desire nor the ability to negotiate with and supervise

the multitude of trades and skills required to complete a project.

Consequently an owner will engage a general contractor. The

general contractor will retain, coordinate and supervise

subcontractors. The owner looks to the general contractor, not

the subcontractors, both for performance of the total

construction project and for any damages or other relief if there

is a default in performance. Performance and the payment of

damages are normally assured by the bond of a surety on which

the general contractor is principal and the owner is the obligee.

The general contractor, in turn, who is responsible for the

performance of the subcontractors, has a right of action against

any subcontractor which defaults. Performance and payment of

damages by a subcontractor are normally assured by the bond of

a surety on which the subcontractor is principal and the general

contractor is the obligee.

Thus the typical owner is insulated from the subcontractors both

during the course of construction and during the pursuit of

remedies in the event of a default. Conversely, the

subcontractors are insulated from the owner. The owner deals

with and, if necessary, sues the general contractor, and the

general contractor deals with and, if necessary, sues the

subcontractor.

Id. at 918 n.2, citing Pierce Associates, Inc. v. Neumours Foundation,

865 F.2d 530, 535-36 (3rd Cir.1989).

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for the building is provided by reinforced concrete, with unstressed steel

cables embedded within the concrete floor slabs, which are then tensioned

after the concrete is poured. With post-tensioning, the cables are generally

pulled or tensioned a few days after the concrete is poured. The design for

Carson’s post-tension system included, in part, the use of certain U-shaped

pieces of steel rebar called “hairpins” to reinforce and confine the cables in

locations where the cables had to bend, or “sweep,” within the concrete.

In April 2004, Owner hired an engineering firm, Pennoni Associates

(“Pennoni”), to perform testing and inspection services during the

construction process. On July 6, 2004, Pennoni inspected the reinforcing

steel and post-tensioning for the 10th floor of the condominium complex and

reported that “[h]airpins were placed @ sweeps as designed.” Def.’s Ex. 4.

Shortly thereafter, the concrete for the 10th floor was poured. The Project

was completed in 2005.

Around New Year’s Day 2013, a post-tensioned cable in the concrete

floor of the 10th floor unit of the condominium complex lost its tension and

ripped out of the concrete floor, causing damage to the unit owned by the

Bergamo Trust (“the Trust”) as well as compromising the structural integrity

of the Building. Specifically, the blowout dislodged hardwood flooring and a

toilet in the 10th floor unit. JMB was immediately notified of the incident; it

sent personnel to investigate the damage.

At trial, JBM presented an expert who testified that a number of

hairpins, which were included in the original Project drawings, were missing

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at the location where the blowout occurred. The expert further opined that

“the lack of hairpins in this section of the tendon that was curving directly

led to the failure of the concrete in this area[,] because the hairpins serve to

restrain the tendons from moving the exact direction that they did[,]” and

that had the hairpins been present the cables “would not have been able to

pull out of the concrete and move in that direction.” N.T. Non-Jury Trial,

2/1/16, at 151-52. While JMB’s expert agreed with Carson’s expert that the

68-mile per hour winds from Hurricane Sandy7 could have affected the

structure, he did not think that the damage would have occurred if the

hairpins had been in place. Id. at 152 (“[H]ad the hairpins been present,

the failure would not have happened.”).

The Beaumont Condominiums Association (Association), the unit

owners’ association of the Beaumont Condominiums, engaged an expert

from a post-tension firm to design and implement a remediation plan.

Ultimately, the Association expended approximately $180,000 to investigate

the blowout, repair the structural defect, and repair the physical damage to

the Trust’s condominium unit.

____________________________________________

7Hurricane Sandy became a Category 1 hurricane that made landfall in the

Unites States about 8 p.m. EDT on October 29, 2014, near Atlantic City, NJ,

with winds as strong as 80 miles per hour. See

www.livescience.com/24380-hurricane-sandy-status-data.html (last visited

7/7/17).

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Despite the Association’s demands to be reimbursed for the repair

costs, Carson refused to resolve the matter. As a result, in December 2013

JMB instituted a lawsuit (“JMB lawsuit”), sounding in breach of contract,

negligence, and contractual indemnification, against Carson. In January

2014, the Association (“Association Action”) commenced an action against

various defendants, pursuant to the Pennsylvania Uniform Condominium Act

(PUCA),8 including JMB, Carson, the original condominium sponsors, and

Pennoni seeking reimbursement of the costs incurred as a result of the

blowout. The Trust later intervened as a plaintiff in the Association Action,9

seeking rental income for the time it was unable to use the 10 th floor unit as

a result of the blowout. In the Association Action, the Association and the

Trust asserted claims against JMB for breach of implied warranty, negligence

and strict liability in tort; JMB asserted a cross-claim for contractual

indemnification, common law contribution and indemnity, breach of contract,

and negligence against Carson. JMB ultimately settled with the Association

for $140,000 and with the Trust for $36,000.10

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8 See 68 Pa.C.S. §§ 3101-3414.

9 The trial court granted the Trust’s petition to intervene on October 24,

2014.

10 Pennoni participated in the settlement, contributing $35,999 to the

settlement with the Association and $9,000 to the settlement with the Trust.

Pennoni is not a party to this appeal.

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Following settlement, JMB continued to pursue its claims against

Carson in both cases. In March 2015, JMB filed a motion for summary

judgment against Carson, arguing that the undisputed facts of record left no

doubt that Carson’s negligence caused the blowout and, therefore, that JMB

was entitled to $210,154.88, representing the amount it paid in its

settlement with the Association and the Trust, as well as engineering fees

and legal fees paid in the matter. The trial court denied JMB’s motion,

finding that JMB had not established that its settlement with the Association

and the Trust was reasonable, and, therefore, that an issue of material fact

still remained in the case.

On February 1, 2016, the court granted Carson’s motion to consolidate

the two cases for trial. See Pa.R.C.P. 213(c). In February 2016, the trial

court held a three-day bench trial before the Honorable Patricia A.

McInerney. At the conclusion of trial, the court found the following facts:

 Hairpins were missing;

 Carson did not put the hairpins in the area of the blowout;

 The hairpins were not there when the concrete was poured; and

 The blowout would not have occurred but for the absence of the

hairpins.

Based upon these facts, the court made the following legal conclusions:

 Carson, as subcontractor, was negligent and breached its subcontract

with JMB “in failing to place hairpins at the sweep at issue in this

case;”

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 Pennoni, as the inspector for the original owner and developer, was

negligent “in failing to detect the absence of the hairpins at issue. . .

upon its inspection of the 10th Floor before the concrete was poured.”

 Liability was apportioned as follows: Carson 60%/Pennoni 40%; and

 JMB’s claims against Carson for breach of contract and negligence

failed where it did not prove that it had the inability to know Carson

failed to place the hairpins despite the exercise of reasonable diligence

where JMB “had representatives on the job site daily with ample

opportunity to inspect the construction prior to the pour.”

 JMB was entitled to indemnification against Carson on the Trust’s

underlying claim for breach of the implied warranty of habitability;

 The Association had no valid claim for breach of implied warranty of

habitability against JMB because it was not a “first purchaser” in privity

with the developer.

On February 11, 2016, the court entered an order awarding JMB

$62,510.7311 on its contractual indemnification claim against Carson and in

favor of Carson on all other claims. On February 26, 2016, JMB filed post-

trial motions. Subsequently, Carson filed post-trial motions. After oral

argument on the motions, the trial court granted in part and denied in part

JMB’s post-trial motion and granted Carson’s post-trial motion on June 7,

2016. Specifically, the court found that the missing hairpins were not

reasonably discoverable by JMB. However, because JMB only suffered

economic damages as result of its settlement of the underlying Plaintiffs’

claims, the court concluded it could not recover on its breach of contract and

____________________________________________

11This figure represents the amount JMB paid to settle its claims with the

Trust for lost rent ($36,000), reasonable attorneys’ fees ($13,488.23) and

engineering costs incurred ($13,022.50).

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negligence claims against Carson. The trial court also reversed its finding

that the Trust was the first purchaser of the 10th floor unit for purposes of

establishing the third parties’ underlying claims for breach of an implied

warranty of habitability. Accordingly, the court struck its $62,510.73

damage award in favor of JMB and against Carson on JMB’s indemnification

claim.

JMB filed timely notices of appeal from the court’s post-trial motion

order and the final judgment, as well as a timely court-ordered Pa.R.A.P.

1925(b) concise statement of errors complained of on appeal. On appeal, 12

JMB raises the following issues for our consideration:

(1) Did the trial court err as a matter of law by failing to apply

the appropriate measure of damages for Carson’s breach

of contract, where Pennsylvania law unambiguously holds

that a general contractor who receives deficient

performance from a subcontractor is entitled to the benefit

of its bargain, as measured by the cost of repairing the

defective work?

(2) Did the trial court err as a matter of law in rejecting JMB’s

indemnification claim against Carson, where its settlement

of the underlying Plaintiffs’ negligence claims was

reasonable under all of the circumstances presented at the

time?

(3) Did the trial court err as a matter of law by holding that

the Beaumont Condominium Association’s underlying claim

against JMB for breach of implied warranty of habitability

was invalid, and, therefore, rejecting JMB’s indemnification

____________________________________________

12JMB filed two identical briefs raising the same “Questions Presented.” We

have only listed the issues once to avoid redundancy.

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claim against the culpable subcontractor for the cost of

that settlement?

(4) Was the trial court’s finding that JMB failed to prove that

the Bergamo Trust . . . was the first purchaser of the

damaged condominium unit unsupported by competent

evidence, where the Trustee testified at trial that he had

represented the Trust since the condominium was formed?

Breach of Contract (JMB-Carson)

In its first issue on appeal, JMB asserts that the trial court incorrectly

determined that it did not prove actual damages on its breach of contract

claim13 against Carson. Specifically, JMB claims that it is entitled to cost-of-

repair damages as a recipient of a defective construction project where it

was damaged by losing the benefit of its bargain.

Pursuant to the Restatement (Second) of Contracts, § 348:

(1) If a breach delays the use of property and the loss in value

to the injured party is not proved with reasonable certainty, he

may recover damages based on the rental value of the property

or on interest on the value of the property.

(2) If a breach results in defective or unfinished

construction and the loss in value to the injured party is

not proved with sufficient certainty, he may recover

damages based on

(a) the diminution in the market price of the

property caused by the breach, or

(b) the reasonable cost of completing performance

or of remedying the defects if that cost is not clearly

disproportionate to the probable loss in value to him.

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13There is a six-year statute of limitations on this breach of contract action.

See 42 Pa.C.S. § 5527. Instantly, the statute of limitations began to run at

the time JMB was aware of the defects in Carson’s concrete work, which

would have been when the accident occurred in January 2013.

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(3) If a breach is of a promise conditioned on a fortuitous event

and it is uncertain whether the event would have occurred had

there been no breach, the injured party may recover damages

based on the value of the conditional right at the time of breach.

Restatement (Second) of Contracts, § 348 (emphasis added).

Carson contends that JMB is not entitled to cost-of-repair damages

because it presented no evidence of diminution in value of the building. In

fact, JMB suffered no loss in value to the unit. Rather, it was the Trust that

suffered the loss in value. Moreover, JMB was not affected by any change in

market price of the unit. Here, it was the Association that paid to remedy

the damage to the unit and repair any structural defects in the Building as a

result of the blowout. While JMB reimbursed the Association for those costs,

it was not contractually obligated to do so. Thus, under section 348 of the

Restatement, JMB is not the intended “injured party” that is entitled to the

reasonable cost to remedy the defects.

JMB relies on Douglass v. Liccardi Constr. Co., 562 A.2d 913 (Pa.

Super. 1988), to support its argument that it is entitled to section 348

damages for Carson’s defective concrete work. In Douglass, a builder

breached its contract with owners of a home when it failed to construct the

dwelling in accordance with the parties’ contract and also performed some of

the construction work in a defective and unworkmanlike manner. The jury

entered a verdict in favor of the owners, awarding them $15,000, which

represented the cost to correct the defects and complete the construction.

The court noted, “the [owners] had contracted for [certain] things . . . and

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they clearly had value to them. The jury was not compelled to accept the

same or in reliance thereon conclude that the cost of repairing the defects in

construction was disproportionate to the loss of value to [owners] because of

such defects.” Id. at 916.

On appeal, the builder argued that the jury’s award was unsupported

by the evidence. In upholding the verdict, the court cited to section 348,

stating that because it is often difficult to prove with certainty the loss in

value to the injured party, “he or she may elect to calculate the loss in value

in accordance with Section 348(2) of the Restatement (Second) of

Contracts.” Id. at 915. Notably, the court recognized that our courts have

generally allowed damages for defective performance of a building contract

to be measured by the cost of completing the work or correcting the defects

by another contractor.

Here, JMB was not in the same position as the owners in Douglass

who were forced to correct the defective and non-compliant work performed

by their builder. Rather, the Association paid the costs to repair the damage

from the blowout and complete the work to fix structural issues from the

accident. JMB simply did not have any “cost to remedy the construction

defects” which is the measure of damages under section 348.

Indemnification Claims

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In its next three issues, JMB argues that its settlement of the

underlying claims with the Association and the Trust was both reasonable

and makes Carson subject to its indemnification14 obligation.

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14 Instantly, the JMB-Carson subcontract provides the following

indemnification clause:

Article 8 - Indemnification

8.1 The Subcontractor agrees for ¡tself and its insure[d] to

indemnify, defend and hold harmless Owner, Contractor,

Architect, Engineer, and their parent, subsidiary and affiliated

companies and their respective agents, officers, directors,

employees and assigns from and against any and all

liabilities, claims, losses, damages, penalties, costs or

expenses (including but not limited to court costs and

reasonable attorney's fees) for damage to property

whatsoever kind or nature or injury to persons (including, but

not limited to death) arising out of or due to or claimed to

have arisen out of or been due to design, manufacture,

delivery, installation, use, maintenance, repair, or operation of

any part of all of the goods, material and equipment, if any,

supplied by Subcontractor, or the performance of the Work

by Subcontractor, its agents, Independent Contractors, Sub-

Subcontractors, vendors, and each of their agents, officers or

employees, or any other of their operations, no matter by

whom performed for or on behalf of the Subcontractor.

Subcontractor’s obligations under this indemnity shall not extend

to property damage or personal injury caused by the sole

negligence of indemnitee or its agents, officers, directors,

employees and assigns.

* * *

8.3 The Subcontractor shall bear any expense of an

indemnitee because of any claim or other matter

indemnified against hereunder, including reasonable

attorney’s fees and court costs in the defense of, or

preparing for the defense of, or preparing for the defense

against, any such claim; even if such claim or any lawsuit

(Footnote Continued Next Page)

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It is well-settled in Pennsylvania that provisions to indemnify for

another party's negligence are to be narrowly construed, requiring a clear

and unequivocal agreement before a party may transfer its liability to

another party. Integrated Project Servs. v. HMS Interiors, Inc., 931

A.2d 724, (Pa. Super. 2007). Accordingly, indemnification provisions are

given effect only when clearly and explicitly stated in the contract between

two parties. Moreover,

[I]n Pennsylvania . . . provisions to indemnify for another party's

negligence are to be narrowly construed, requiring a clear and

unequivocal agreement before a party may transfer its liability to

another party. Ruzzi v. Butler Petroleum Co., [] 588 A.2d 1,

7 (Pa. 1991); Perry v. Payne, [] 66 A 553 (Pa. 1907).

Bernotas v. SuperFresh Food Mkts., Inc., 863 A.2d 478, 482-83 (Pa.

2004). Finally,

To establish the right to indemnification, the indemnitee must

establish: the scope of the indemnification agreement; the

nature of the underlying claim; its coverage by the

indemnification agreement; the reasonableness of the alleged

(Footnote Continued) _______________________

arising therefore is groundless, false or fraudulent. If any such

claims has not been settled or discharged when the Work is

finished, final settlement between the Contractor and the

Subcontractor and final payment of the Subcontract Price and

the acceptance of the Work shall be deferred until any such

claim is paid or settled or the Subcontractor provides a bond,

acceptable to the Contractor, in its sole discretion, to satisfy

such claim.

Moreover, Carson assumed all the design responsibility for “converting the

structure and foundations from structural steel and metal deck to post[-]

tension reinforced concrete.” Id. at 2.

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expenses; and, where the underlying action is settled

rather than resolved by payment of a judgment, the

validity of the underlying claim and the reasonableness of

the settlement.

Burlington Coat Factory of Pa., LLC v. Grace Constr. Mgmt. Co., LLC,

126 A.3d 1010, 1022 (Pa. Super. 2015) (citing McClure v. Deerland Corp.,

585 A.2d 19, 22 (Pa. Super. 1991) (emphasis added). See Martinique

Shoes, Inc. v. New York Progressive Wood Heel Co., 217 A.2d 781,

783 (1966) (to recover indemnity where there has been voluntary payment,

party paying must himself be legally liable and show that he could have

been compelled to satisfy claim).

Thus, in order for Carson to be legally obligated to indemnify JMB for

settling with the Association and the Trust, the question boils down to

whether those parties had valid causes of action against JMB.15

In speaking to that question, JMB claims that the trial court erred in

concluding that its settlement with the Association and the Trust was not

subject to Carson’s duty to indemnify. Specifically, JMB asserts that it

reasonably settled its claims with the Association, that the Trust was the

first-purchaser of the damaged unit, and that the Association had a valid

implied warranty of habitability in the common area where the accident

occurred.

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15 Notably, there was no contractual privity between the Association and JMB

or the Trust and JMB. In fact, JMB had only contracted with Builder.

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Negligence

Instantly, the Association sued JMB for negligence as the project

manager. Essentially, the Association alleged that JMB was liable for

professional negligence where it did not ensure that its subcontractor,

Carson, properly placed the hairpins in the post-tensioning system of the

concrete superstructure for the Building.

The trial court concluded that JMB could not recover on this negligence

theory, however, because it:

failed to establish any [direct harm or] damages in regard to . . .

negligence as the only damages in this case related to the

settlement of underlying plaintiffs’ causes of action and JMB’s

claims for indemnification of the settlement payments that were

made to those plaintiff[s] and for legal expenses and

investigating and engineering expenses pursuant to a

contractual indemnification clause.

Post-Trial Trial Court Opinion, 9/12/16, at 11. Specifically, the trial court

found that JMB failed to demonstrate either the causal relationship between

the breach and the resulting injury suffered by it, or the actual loss suffered

by it, necessary to support a cause of action for negligence. Id. at 23.

While JMB suffered a monetary loss by paying the Association and the

Trust for the expenses it incurred in remedying the physical damage to the

units and Building and lost rent, the trial court is correct in concluding that it

did not suffer any actual physical or property damage. See Adams v.

Copper Beach Townhome Communities, L.P., 816 A.2d 301 (Pa. Super.

2003) (explaining economic loss doctrine which provides that no cause of

action exists for negligence that results solely in economic damages

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unaccompanied by physical injury or property damage). Thus, while there

was actual property damage to the building as a result of Carson’s

negligence, JMB did not suffer any actual property or physical injury

recoverable under a negligence theory.

Breach of Implied Warranty of Habitability

The Association and the Trust also sued JMB under a theory of breach

of an implied warranty of habitability.

Pennsylvania law recognizes implied warranties in construction

contracts where a builder sells a home to a residential purchaser. Conway

v. Cutler Group, Inc., 99 A.3d 67, 69-70 (Pa. 2014), citing Elderkin v.

Gaster, 288 A.2d 771 (Pa. 1972). “[T]he warranties of habitability and

reasonable workmanship are not created by representations of a builder-

vendor[,] but rather are implied in law and as such, exist independently of

any representations of a builder-vendor.” Tyus v. Resta, 476 A.2d 427,

433 (Pa. Super. 1984). An implied warranty may be waived by clear and

unambiguous contract language; however, “such language must be

sufficiently particular to inform the home purchaser of the right he or she is

waiving.” Pontiere v. James Dinert, Inc., 627 A.2d 1204, 1206 (Pa.

Super 1993) (quoting Tyus, 476 A.2d at 432 (Pa. Super. 1984)). “To supply

proper notice, language of disclaimer must refer to its effect on specifically

designated, potential latent defects.” Tyus, 476 A.2d at 432. Latent

defects are those “which would not be apparent to an ordinary purchaser as

a result of a reasonable inspection.” Tyus, 476 A.2d at 433.

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In 1000 Grandview Assoc’n v. Mt. Washington Assoc’n, 434 A.2d

796 (Pa. Super. 1981), our Court concluded that a condominium association

did have standing under PUCA’s predecessor statute, the Unit Property Act, 16

to assert such warranty claims, stating:

[A]n association may have representational standing to assert

the rights of its individual members, if it alleges an immediate,

direct and substantial injury to any one of them. The allegations

of the second count of the complaint, which are admitted for the

purposes of the demurrer, . . . state that the appellees failed to

comply with their implied and express warranties for the

common areas resulting in, inter alia, cracked masonry, water

leakage, a defective sewage pump, etc. Surely these are

allegations of a direct injury to the interests of the

association's members which permit the association to

claim standing.

Id. at 798 (emphasis added). Notably, the Grandview panel specifically

stated that PUCA was not applicable to its case;

In concluding the discussion on the standing issue, we note that

since this appeal was taken, the Pennsylvania legislature has

repealed the Unit Property Act and has adopted the Uniform

Condominium Act [PUCA], 68 Pa.C.S. § 3101 et seq. (Adopted

on July 2, 1980, effective in 120 days). The new act specifically

states that the condominium association, even if

unincorporated, may "[i]nstitute, defend or intervene in litigation

. . . ." 68 Pa.C.S. § 3302(a)(4). Moreover, even if the unit

owners' association was formed before the effective date of the

act, the association would still have standing to sue under the

new statute if the complained of injury occurred after the act's

effective date. 68 Pa.C.S. § 3102(a). Of course, the Uniform

Condominium Act is not applicable to [the] instant case.

Id.

____________________________________________

16 68 P.S. § 700.101, et seq.

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Here the Association’s complaint, filed pursuant to PUCA, alleges that:

As a result of the blow-out and shifting of the tendons, the

tendons lost their necessary and designed tensioning, and thus

failed to provide the concrete with the necessary and designed

support. As a result of the aforesaid failure and the undermined

structural integrity of the concrete floor, the habitability of all

Units in The Building was compromised and posed a serious risk

of harm, including the risk of potential collapse of the entire 10th

floor, with the consequent impact upon all other floors above and

below.

The defects in the construction of the post-tensioning system

posed a substantial risk of harm and undetermined the structural

integrity of the entire Building. The aforesaid structural defect

and consequent blow-out of the post-tensioning cables seriously

and dangerously compromised and negatively impacted the

habitability of The Building and all of the Units therein.

Association’s Complaint, 2/3/2014, at ¶¶ 20, 22, 41-42. However, the

Association stated in its complaint that pursuant to section 3302(a)(4) of

PUCA, it was “acting in its own name[,] . . . independent of any right of any

individual Unit owner, past or present,” and it did so “on a matter affecting

the condominium.” Association’s Complaint, 2/3/2014, at ¶ 3. Cf. Valley

Forge Towers South Condominium v. Ron-Ike Foam Insulators, Inc.,

574 A.2d 641 (Pa. Super. 1990) (condominium association, acting as legally

authorized representative of unit owners under section 3302(4) of PUCA,

sued roofing membrane manufacturer to honor its warranty; court reinstated

association’s cause of action under Pennsylvania’s UTPCPL); see 68 Pa.C.S.

§ 3302(a)(4) of the Act, a condominium association may “[i]nstitute, defend

or intervene in litigation . . . in its own name on behalf of itself or two or

more unit owners on matters affecting the condominium.”).

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Thus, where the Association clearly chose not to assert the individual

rights of any of the unit owners, but merely pursued its own interest in

litigating the matter as explicitly stated under section 3302(4) of PUCA, we

cannot apply the standing analysis announced in Grandview. We also

decline to extend the implied warranty to an association in its own right

where the Association had the opportunity to sue on behalf of the unit

residents as their legally authorized representative and chose not to.

With regard to the Trust, we note that the implied warranty of

habitability is not limited to first purchasers. See Spivack v. Berks Ridge

Corp., 586 A.2d 402 (Pa. Super. 1990). Rather, it is limited to first user-

purchasers. Conway v. Cutler Group, Inc., 99 A.3d 67 (Pa. 2014).

To prove that it was the first purchaser of Unit 10, the damaged unit,

David Rasner, Esquire, testified on behalf of the Trust. Rasner testified that

he is the co-trustee of the Trust which was established by his co-trustee’s

grandmother. He testified that the only asset that the Trust has is the 10 th

floor unit at the Beaumont and that the unit was rented out to tenants.

Rasner testified that he thought he had been the co-trustee of the Trust

since the unit was established and that he was co-trustee at the time of the

blowout. N.T. Waiver Trial, 2/1/2016, at 69. The tenants renting the unit at

the time of the blowout vacated the premises in March 2013, concluding that

“the unit was uninhabitable and that they were concerned for their safety.”

Id. at 70-71. The Trust did not secure a new tenant until April 2014. Id. at

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71. The Association paid the Trust approximately $19,000 to make the

needed repairs to the damaged unit. Id. at 73-73.

Instantly, the Trust attached a copy of its agreement of sale for Unit

10 to its petition to intervene in the underlying matter. The agreement,

entered into on March 9, 2007, indicates that The Bergamo Trust, c/o Laura

Zarett, is purchasing “Unit 1000” at Beaumont Condominiums for

$1,725,000.00. The agreement lists the Beaumont Corporation as the seller

of the unit. However, as the trial court acknowledges, not only does that

agreement purport to waive any implied warranty of habitability, Pontiere,

supra; Tyus, supra, the statute of limitations on an action to enforce any

warranty within the agreement had run by the time the Association sued

JMB and the Trust intervened. Thus, we reluctantly agree with the trial

court that neither the Association nor the Trust had a valid cause of action

for breach of implied warranty against JMB.

Judgment and order affirmed.

Judge Ott joins this Memorandum.

Justice Fitzgerald files a Concurring and Dissenting Memorandum.

Judgment Entered.

Joseph D. Seletyn, Esq.

Prothonotary

Date: 11/3/2017

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