J-S47018-15


NON-PRECEDENTIAL DECISION - SEE SUPERIOR COURT I.O.P. 65.37

JEFFREY MCCULLON AND MARIA                        IN THE SUPERIOR COURT OF
MCCULLON, HUSBAND AND WIFE                              PENNSYLVANIA

                            Appellant

                       v.

ERIC PICCOTTI AND MARGARET
PICCOTTI, HUSBAND AND WIFE,
INDIVIDUALLY AND, T/D/B/A JILLY'S;
BERNADETTE PICCOTTI; AND, EBD, INC.

                            Appellee                   No. 2186 MDA 2014


              Appeal from the Order Entered November 18, 2014
             In the Court of Common Pleas of Lackawanna County
                      Civil Division at No(s): 14-CV-2656


BEFORE: ALLEN, J., OTT, J., and STRASSBURGER, J.*

MEMORANDUM BY OTT, J.:                           FILED SEPTEMBER 04, 2015

        Jeffrey McCullon and Maria McCullon (“the McCullons”), husband and

wife, appeal the order entered November 18, 2014, in the Lackawanna

County Court of Common Pleas sustaining the preliminary objections of Eric

Piccotti and Margaret Piccotti, husband and wife, individually and, T/D/B/A

Jilly’s, Bernadette Piccotti, and EBD, Inc. (collectively “the Piccottis”), to the

McCullons’ complaint, and dismissing the complaint with prejudice.            The

McCullons sought damages for breach of contract and unjust enrichment

after they failed to purchase a bar owned by the Piccottis. On appeal, the

____________________________________________


*
    Retired Senior Judge assigned to the Superior Court.
J-S47018-15



McCullons argue the trial court erred and abused its discretion in considering

information and documents outside the complaint, and in dismissing their

claim for unjust enrichment. Based on the following, we affirm.

      The facts underlying the McCullons’ claims are aptly summarized by

the trial court as follows:

      According to the Complaint filed on May 5, 2014, Defendant Eric
      and Margaret Piccotti owned a tavern/restaurant formerly known
      as Jilly’s and later known as McCullon’s Bar and Grill.1
      Defendants, Eric Piccotti, Bernadette Piccotti, and EDB, Inc.,
      owned the liquor license attached to the subject property.
      Plaintiff Maria McCullon (“McCullon”) was allegedly listed on the
      liquor license as the Manager of the premises.

      __________
      1
       It was represented at oral argument that the property at issue
      has been sold to a third party.

      __________

            [The McCullons], allege that they entered into an
      agreement in November of 2013 with [the Piccottis], in which
      [the McCullons] would operate the subject bar, would invest
      cash and time into the business, and would, at a future
      unspecified date, purchase the property from [the Piccottis].
      [The McCullons] allege that they then made numerous
      improvements to the property with the understanding that [the
      Piccottis] would not actively seek another buyer since they had
      allegedly expended over $100,000 into improving the property.
      [The McCullons] also allege that this agreement was
      memorialized in a “Sales Agreement,” which is attached as
      Exhibit A to the Complaint. The “Sales Agreement” is a hand-
      written restaurant slip/Guest Check and lays out various
      potential payment amounts and/or durations, starting with a
      price of $299,000 for cash or conventional financing. The pricing
      options then increase in the following increments:

          • $330,000 total—$100,000 down and $230,000 over 10
          years at 5% interest ($2,975/month);



                                    -2-
J-S47018-15


        • $360,000 total—$50,000 down and $290,000 over 10
        years at 6% interest ($3,280/month);

        • $390,000 total—$25,000 down and $365,000 over 10
        years at 7% interest ($5,150/month).

           Then, on or about March of 2014, [] Eric Piccotti allegedly
     informed [] Maria McCullon that there was a deadline of May 1,
     2014 for [the McCullons] to purchase the property from [the
     Piccottis].   In anticipation of purchasing the property, [the
     McCullons] state that they had made an application to Peoples
     Security Bank & Trust to seek financing. On April 4, 2014, [the
     McCullons] entered into an “Agreement of Sale” with [the
     Piccottis] for the subject property in the amount of $279,000.
     [The Agreement is attached to the Complaint as Exhibit B.] This
     Agreement included a “time is of the essence” clause and was
     contingent upon the closing occurring on or before May 1, 2014.
     A footnote was included in the “Agreement of Sale,” stating as
     follows:

        It is understood that the closing date may be extended an
        additional thirty days for good cause.         However, this
        Agreement is expressly contingent upon Buyers providing
        Seller with written verification from the financial institution
        providing the mortgage of a firm commitment that Buyers’
        application for a mortgage has been approved.

            On April 30, 2014, [the McCullons] caused a letter to be
     sent to [the Piccottis] from Peoples Security Bank & Trust. [The
     letter is attached to the Complaint as Exhibit C.] The letter
     stated as follows:

        To Whom it May Concern:

        Maria McCullon has an application in for financing at
        Peoples Security Bank & Trust Co.

          The sale of the subject property between the parties never
     materialized.

Trial Court Memorandum and Order, 11/18/2014, at 1-3 (record citations

omitted).




                                     -3-
J-S47018-15



       On May 5, 2014, the McCullons filed the instant complaint stating

causes of action for breach of contract and unjust enrichment, and seeking

to prohibit the sale of the property to a third party. Thereafter, on July 15,

2014, the Piccottis filed preliminary objections in the nature of a demurrer.

Following oral argument and briefs submitted by both parties, the trial court

entered a Memorandum and Order on November 18, 2014, sustaining the

Piccottis’ preliminary objections and dismissing the complaint with prejudice.

This timely appeal followed.1

       Our review of an order sustaining preliminary objections in the nature

of a demurrer is well-established.

       A preliminary objection in the nature of a demurrer is properly
       granted where the contested pleading is legally insufficient.
       Cardenas v. Schober, 783 A.2d 317, 321 (Pa.Super.2001)
       (citing Pa.R.C.P. 1028(a)(4)). “Preliminary objections in the
       nature of a demurrer require the court to resolve the
       issues solely on the basis of the pleadings; no testimony
       or other evidence outside of the complaint may be
       considered to dispose of the legal issues presented by the
       demurrer.” Id. at 321-22 (citation omitted). All material facts
       set forth in the pleading and all inferences reasonably deducible
       therefrom must be admitted as true. Id. at 321.

          In determining whether the trial court properly sustained
          preliminary objections, the appellate court must
          examine the averments in the complaint, together
          with the documents and exhibits attached thereto, in
          order to evaluate the sufficiency of the facts averred. The
          impetus of our inquiry is to determine the legal sufficiency
____________________________________________


1
  The trial court did not direct the McCullons to file a concise statement of
errors complained of appeal pursuant to Pa.R.A.P. 1925(b).




                                           -4-
J-S47018-15


          of the complaint and whether the pleading would permit
          recovery if ultimately proven. This Court will reverse the
          trial court’s decision regarding preliminary objections only
          where there has been an error of law or abuse of
          discretion. When sustaining the trial court’s ruling will
          result in the denial of claim or a dismissal of suit,
          preliminary objections will be sustained only where the
          case is free and clear of doubt.

       Brosovic v. Nationwide Mutual Insurance Co., 841 A.2d
       1071, 1073 (Pa.Super.2004) (citation omitted).

Hess v. Fox Rothschild, LLP, 925 A.2d 798, 805-806 (Pa. Super. 2007)

(emphasis added).

       On appeal, the McCullons challenge only the trial court’s dismissal of

their cause of action for unjust enrichment.2      They first assert the court

improperly considered a document, the Commercial Lease Agreement

(“Commercial Lease”), outside its scope of review in sustaining the Piccottis’

preliminary objections.        A review of the record reveals the Commercial

Lease, relied upon by the trial court in its memorandum opinion, was not

attached to the Complaint, but rather was included as an attachment to the

Piccottis’ Memorandum of Law in support of their preliminary objections.

____________________________________________


2
  With respect to the breach of contract claim, the trial court concluded: (1)
the statute of frauds requires that a transfer of property be evidenced in a
writing; (2) the “Sales Agreement/Guest Check” attached to the complaint
did not constitute “an agreement between the parties[;]” and (3) the
McCullons did not aver that the Piccottis breached any duty owed to them in
the April 2014 Agreement of Sale. See Trial Court Memorandum and Order,
11/18/2014, at 5-7. On appeal, the McCullons’ argument focuses solely on
their claim for unjust enrichment. Therefore, we find any challenge to the
court’s dismissal of their breach of contract claim waived.




                                           -5-
J-S47018-15



Because a court’s scope of review in ruling on a demurrer is limited to the

complaint, the McCullons argue the court erred as a matter of law “[b]y

exercising consideration of matters beyond [the] Complaint.”              McCullons’

Brief at 14.

      The McCullons also contend the court erred in concluding they were

entitled to no relief on their claim of unjust enrichment as a matter of law.

They assert that, “[h]ad the trial court resigned itself to [an] evaluation of

the allegations in the Complaint, as it was required to do by law, the record

supported a finding that [they] possessed an agreement or an expectation of

an opportunity to purchase the subject property, which caused them to

make extensive improvements, where they operated McCullon’s Bar and

Grill.” McCullons’ Brief at 15. The McCullons also argue, however, that even

if the trial court were permitted to consider the terms of the Lease, a

“factual dispute exists on what occurred, what the expectations of the

[McCullons] actually were and whether the [Piccottis] were unjustly

enriched.” Id. at 19. Accordingly, the McCullons claim the trial court erred

when it sustained the Piccottis’ preliminary objections to their claim of unjust

enrichment and dismissed their complaint with prejudice.

      In   sustaining   the   Piccottis’    demurrer   to   the   claim   for   unjust

enrichment, the court, preliminarily, reiterated its finding that the November

2013 “Sales Agreement/Guest Check” did not constitute an “enforceable

contract between the parties for the sale of the business premises.”             Trial

Court Memorandum and Order, 11/18/2014, at 8-9. As further support, the

                                           -6-
J-S47018-15



trial court referenced Paragraph 25 of the parties’ Lease, which included

“language contemplat[ing] the possibility that the subject premises could be

sold to a third party during the term of [the McCullons’] lease[.]” Id. at 9.

The court explained: “Given this information, [the McCullons’] allegations

that they expended money into the property in anticipation of purchasing it

is unsupported by the facts.” Id.

     The trial court also concluded the McCullons’ did not demonstrate,

through their pleadings, that “any benefits conferred to [the Piccottis] have

been unjust.”   Trial Court Memorandum and Order, 11/18/2014, at 7-8

(emphasis in original). The court provided the following rationale:

     First, the Commercial Lease requires that [the McCullons] make
     repairs to the property. Paragraph 9 of the Commercial Lease
     states that “The Lessee agrees to keep the premises in a good
     condition of repair.” Second, though [the McCullons] do allege
     that they made repairs and/or improvement to the property,
     they were also leasing the space for the purpose of operating a
     business within that space. Repairs are necessary in maintaining
     a successful business and, presumably, [the McCullons’]
     business would have benefitted from the repairs and/or
     improvements that they allegedly made. Furthermore, there is
     nothing in the [Commercial Lease] to suggest that [the
     McCullons] would be compensated or reimbursed for any repairs
     and/or improvements that they made to the property. [The
     McCullons] made repairs and/or improvements for the benefit of
     their business, undertaking them knowing that the lease could
     end and the property could be sold to a third party.

Id. at 9. Therefore, the trial court concluded the McCullons’ pleadings did

not support a cause of action for unjust enrichment.

     First, we agree with the McCullons that the trial court erred when it

considered the term of the parties’ Commercial Lease.       As noted supra,


                                    -7-
J-S47018-15



when ruling on preliminary objections in the nature of a demurrer, a trial

court must “resolve the issues solely on the basis of the pleadings; no

testimony or other evidence outside of the complaint may be

considered to dispose of the legal issues presented by the demurrer.”

Hess, supra, 925 A.2d at 806 (citation omitted and emphasis added). See

also Mellon Bank, N.A. v. Fabinyi, 650 A.2d 895, 899 (Pa. Super. 1994)

(finding trial court erred in considering “factual matters beyond the

complaint” when ruling upon preliminary objection in nature of a demurrer).

      Here, only three exhibits were attached to the complaint:         (1) the

undated “Sales Agreement/Guest Check;” (2) the April 4, 2014, Agreement

of Sale; and (3) the April 30, 2014, letter from Peoples Security Bank,

stating Maria McCullon had applied for financing. See Complaint, 5/5/2014.

The parties’ Commercial Lease is not mentioned in the Complaint, nor was it

attached as an exhibit.    Accordingly, we conclude the trial court erred in

considering the Commercial Lease when determining whether the McCullons

sufficiently pled a cause of action for unjust enrichment.

      Nevertheless, we still find the McCullons are entitled to no relief, as we

agree with the trial court’s ultimate determination that the McCullons cannot

maintain an action for unjust enrichment against the Piccottis as a matter of

law. We do so, however, on a different basis than that relied upon by the

trial court. See Richmond v. McHale, 35 A.3d 779, 786 (Pa. Super. 2012)

(“[W]e are not bound by the rationale of the trial court and may affirm on

any basis.”).

                                     -8-
J-S47018-15




     When considering whether a plaintiff has stated a claim for unjust

enrichment, we must bear in mind the following:

     A claim for unjust enrichment arises from a quasi-contract. A
     quasi-contract imposes a duty, not as a result of any agreement,
     whether express or implied, but in spite of the absence of an
     agreement, when one party receives unjust enrichment at the
     expense of another.

        The elements of unjust enrichment are benefits conferred
        on defendant by plaintiff, appreciation of such benefits by
        defendant, and acceptance and retention of such benefits
        under such circumstances that it would be inequitable for
        defendant to retain the benefit without payment of value.
        Whether the doctrine applies depends on the unique
        factual circumstances of each case. In determining if the
        doctrine applies, we focus not on the intention of the
        parties, but rather on whether the defendant has been
        unjustly enriched.

        Moreover, the most significant element of the
        doctrine is whether the enrichment of the defendant
        is unjust.     The doctrine does not apply simply
        because the defendant may have benefited as a
        result of the actions of the plaintiff.

Stoeckinger v. Presidential Fin. Corp. of Delaware Valley, 948 A.2d

828, 833 (Pa. Super. 2008) (citations and internal punctuation omitted;

emphasis added).

     The McCullons include the following factual averments in their

complaint:

     8. On or about November 2013, [the McCullons] and [the
     Piccottis] entered into an agreement in that [the McCullons]
     would be operating the bar formerly known as JILLY’S now
     known as McCULLON’s BAR AND GRILL, and entered into a
     tentative sales agreement in November of 2013 wherein the

                                   -9-
J-S47018-15


     [McCullons] would invest cash and time into the business and
     then, at a future date, which was not formally produced in the
     Sales Agreement … the price to be paid was Two Hundred
     Ninety-nine    Thousand    ($299,000.00)   Dollars   cash   or
     conventional …

     9. Since the entry of the Agreement, [the McCullons] have
     made improvements to the premises …

     10. In making these improvements, [the McCullons] did so with
     the understanding that the [Piccottis] would not actively seek
     another buyer as they had expended in excess of One Hundred
     Thousand ($100,000.00) Dollars in improving the premises and
     building the business known as McCULLON’S BAR AND GRILL.

     11. On or about March of 2014, Plaintiff, MARIA McCULLON, was
     approached by the Defendant, ERIC PICCOTTI, and he instructed
     her that he was now putting a deadline of May 1, 2014 in which
     the closing would occur.

     12. [The McCullons] were always under the understanding that
     they would be given the right of first refusal in purchasing the
     property as they had expended vast amounts of money that the
     [Piccottis] knew they were doing in anticipation of purchasing
     the business.

     13. Sometime in March or April of 2014, the [McCullons] found
     out that the [Piccottis were] actively seeking buyers for the
     premises and liquor license after [Maria McCullon] had expended
     various amounts of money and the property was being listed by
     a real estate company to pursue a purchaser for the property.

     14. [The McCullons], in anticipation of purchasing the property,
     had made application to Peoples Security Bank & Trust to try to
     seek financing for [their] loan to purchase the premises,
     contents and liquor license …

     15.     Plaintiff, MARIA McCULLON, has been the operating
     manager of the premises and business known as McCULLON’S
     BAR AND GRILL since November of 2013 and is listed on the
     liquor license as the running manager of the tavern.

     16. [The McCullons] are seeking to purchase the premises from
     the [Piccottis] and prevent them from selling it to anyone else as
     [they have] expended various and diverse sums of money and
     personal time in endeavoring to purchase the business and the


                                   - 10 -
J-S47018-15


      premises located at 524 Court Street, Scranton, Pennsylvania,
      now operating as McCULLON’s BAR AND GRILL.

      17. It is believed and therefore averred that the [Piccottis] have
      now entered into an active contract with an alternative
      purchaser for the business and is not allowing [the McCullons] to
      purchase the bar and grill after they have expended various and
      diverse sums of money and has operated in good faith trying to
      secure financing and the [Piccottis] did agree in a contract,
      which is attached hereto and marked as Exhibit “B”, that the
      contract could be extended beyond May 1st for a period of thirty
      (30) days for good cause shown.

      18. The [McCullons] have operated as reasonable as possible in
      trying to secure financing, per the letter attached hereto and
      marked as Exhibit “C”, showing their good faith application to a
      financing company to purchase the premises.

                                   ****

      22. [The McCullons] have expended various and diverse sums of
      money to the [Piccottis’] benefit and [the Piccottis] are now
      preventing the [McCullons] from purchasing the property.

Complaint, 5/5/2014, at ¶¶ 8-18, 22.

      Based on these factual averments, we agree with the conclusion of the

trial court the McCullons failed to demonstrate that any benefit the Piccottis

received from the improvements the McCullons made to the property was

“unjust.” The McCullons averred they made improvements to the property

after entering into a “tentative agreement” to purchase the property “at a

future date,” and with the “understanding that they would be given the right

of first refusal in purchasing the property.”   Id. at ¶¶   8, 12.   While not

specifically averred, it is clear the McCullons were given the opportunity

to purchase the property, as they attached to the complaint an agreement of

sale executed by the parties on April 4, 2014.        See id. at Exhibit B.



                                    - 11 -
J-S47018-15



However, as is also evident from the attachments, the Agreement of Sale

included a “time is of the essence” clause mandating closing occur on or

before May 1, 2014. See id. at Exhibit B, Agreement of Sale, 4/4/2014, at

¶ 3. Although the Agreement permitted a thirty-day extension of the closing

date “for good cause,” it also made the contract contingent upon the

McCullons providing written verification that they had secured financing for

the sale. See id. at ¶ 3 n.1. Clearly, McCullons were not able to secure the

requisite financing in the allotted time as is evident by the Peoples Security

Bank’s April 30, 2014, letter, attached as Exhibit C, stating that the

McCullons had “an application for financing.” Id. at Exhibit C.

        Accordingly, accepting all well-pleaded facts as true, we find the

McCullons are unable to state a claim for unjust enrichment.      Indeed, the

McCullons averred they made improvements to the property with the

expectation that they would be provided the first opportunity to purchase

the bar. Moreover, the attachments to the complaint demonstrate they were

provided with that right, but were unable to secure the requisite financing in

the time allotted under the agreement of sale.     While the McCullons claim

the Piccottis are “preventing [them] from purchasing the property[,]” 3 the

McCullons have pled no facts to support that assertion.           Rather, the

complaint and attachments clearly demonstrate the Agreement of Sale fell

____________________________________________


3
    Complaint, 5/5/2014, at ¶ 22.




                                          - 12 -
J-S47018-15



through because of the McCullons’ own failure to secure financing.

Therefore, we detect no error or abuse of discretion in the ruling of the trial

court sustaining the Piccottis’ preliminary objections and dismissing the

McCullons’ complaint with prejudice.

      Order affirmed.

Judgment Entered.




Joseph D. Seletyn, Esq.
Prothonotary



Date: 9/4/2015




                                    - 13 -
