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Keywords

contractlawsuitdamagesappealtrialpleawillcompensatory damagesrescissionjury trialtreble damages
contractplaintiffdamagestrialwillconsumer protectionrescissiontreble damages

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Schwartz v. Rockey, 593 Pa. 536, 932 A.2d 885

Facts

In March 2001, Buyers Richard and Melanie Schwartz initiated a lawsuit against Sellers William and Connie Rockey, alleging common-law fraud and violations of the UTPCPL due to the sellers' failure to disclose significant water infiltration issues in the property. The sellers had experienced multiple flooding incidents and made minimal disclosures about these issues during the sale process. After a non-jury trial, the court awarded the buyers $26,000 in compensatory damages but denied their request for rescission and treble damages, leading to an appeal.

Within the period in which Sellers owned the subject property located on Stafford Drive in Peters Township, the property experienced several instances of substantial water infiltration.

Issue

The main legal issues were whether the purchasers' initial demand for compensatory damages constituted an election of remedies that precluded rescission, and whether a finding of outrageous or egregious conduct is necessary to support an award of treble damages under the UTPCPL.

The questions presented concern whether the purchasers/plaintiffs made an election of remedies that foreclosed rescission, and whether a finding of outrageous or egregious conduct is required to support an award of treble damages in a private action under the Unfair Trade Practices and Consumer Protection Law.

Rule

The court held that the commencement of an action does not definitively foreclose subsequent amendments invoking rescission, but purchasers must pursue rescission with sufficient promptitude. Additionally, the court found that the discretion to award treble damages under the UTPCPL should not be constrained by common-law punitive damage requirements.

The court noted, however, that once a party elects a remedy, he is bound by it.

Analysis

The court analyzed the facts surrounding the buyers' delay in seeking rescission, noting that they had been aware of the flooding incident for nearly two years before filing their original complaint. The court concluded that the buyers did not act promptly enough to maintain their claim for rescission, as they had effectively affirmed the contract by living in the house for six years without seeking rescission until after the trial. The court also determined that the common pleas court's decision to allow the amendment to the complaint did not negate the requirement for prompt action.

Applying these principles, the court held that Buyers were not entitled to rescind the sales contract, because they had effectively affirmed the contract by living in the house for six years and by not promptly seeking to rescind once they became aware of the undisclosed water damage.

Conclusion

The Supreme Court affirmed in part and reversed in part, holding that the buyers failed to pursue rescission with sufficient promptitude and that the trial court's discretion regarding treble damages under the UTPCPL should not be closely constrained by common-law requirements.

The Supreme Court affirmed in part, reversed in part, and remanded.

Who won?

The prevailing party was the sellers, William and Connie Rockey, as the Supreme Court upheld the trial court's decision to deny rescission and treble damages, finding that the buyers did not act promptly.

The prevailing party was the sellers, William and Connie Rockey, as the Supreme Court upheld the trial court's decision to deny rescission and treble damages.

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