J-A02009-19


NON-PRECEDENTIAL DECISION - SEE SUPERIOR COURT I.O.P. 65.37

 CHARTER HOMES AT MILL CREEK,            :   IN THE SUPERIOR COURT OF
 INC.                                    :        PENNSYLVANIA
                                         :
                                         :
              v.                         :
                                         :
                                         :
 CHARLAN GROUP, L.P.                     :
                                         :   No. 1113 MDA 2018
                   Appellant             :
                                         :
                                         :
                                         :
                                         :
              v.                         :
                                         :
                                         :
 CHARTER HOMES BUILDING                  :
 COMPANY                                 :

             Appeal from the Judgment Entered June 11, 2018
     In the Court of Common Pleas of Lancaster County Civil Division at
                           No(s): CI-15-01375


BEFORE: LAZARUS, J., DUBOW, J., and NICHOLS, J.

MEMORANDUM BY LAZARUS, J.:                           FILED APRIL 26, 2019

      Charlan Group, L.P. (“Charlan”), appeals from the judgment entered in

favor of defendant Charter Homes at Mill Creek, Inc., and additional defendant

Charter Homes Building Company (collectively, “Charter Building”), following

a bench trial, the Honorable Leonard G. Brown, III, presiding. The underlying

dispute between Charlan, a real estate developer, and Charter Building, a

residential builder, arises out of a Lot Purchase Agreement (“Agreement”) and

the parties’ subsequent oral modifications. Following trial, the court entered
J-A02009-19



judgment in favor of Charter Building in the amount of $1,054,033.95.

Charlan filed this appeal, raising three issues:

       1.    Did the trial court commit an error of law in failing to follow
       the requirements set out in [Fine v. Checcio,] 870 A.2d 850 (Pa.
       2005),[1] when it determined an applicable statute of limitations
       was tolled?

       2.    Did the trial court abuse its discretion in inferring an
       affirmative act of misrepresentation justifying a tolling of the
       statute of limitations?

       3.    Did the trial court commit an error of law or abuse of
       discretion in not finding Charter Building was estopped from
       changing its acceptance that $8.6 million in Improvement Costs
       had been paid by Charlan?

Appellant’s Brief, at 4. After our review of the parties’ briefs, the record and

the relevant law, we affirm based on Judge Brown’s August 6, 2018 Pa.R.A.P.

1925(a) order, which incorporates his comprehensive findings of fact and

conclusions of law, filed on May 7, 2018.2

       We first note our limited scope of review following a non-jury trial:

During a non-jury trial, the trial court acts as the finder of fact and has the

authority to make credibility determinations and resolve conflicts in evidence.

Ruthrauff, Inc. v. Ravin, Inc., 914 A.2d 880, 888 (Pa. Super. 2006). The

court may believe all, part or none of the evidence. Id.


____________________________________________


1In portions of its brief, Charlan refers to this case as “Checo v. Fine.” See
Appellant’s Brief, at iv, 10.

2We refer to the order and findings/conclusions as the court’s May 7, 2018
opinion.


                                           -2-
J-A02009-19




       Issues of credibility and conflicts in evidence are for the trial court
       to resolve; this Court is not permitted to reexamine the weight
       and credibility determinations or substitute our judgment for that
       of the factfinder. Furthermore, the findings of the judge in a non-
       jury trial are given the same weight and effect as a jury verdict
       such that the court’s findings will not be disturbed on appeal
       absent an abuse of discretion, error of law, or lack of support in
       the record. We will not disturb the court’s factual findings merely
       on the basis we would have reached a different conclusion; rather,
       our task is to determine whether there is competent evidence in
       the record that a judicial mind could reasonably have determined
       to support the finding.

Id. at 887 (citations and quotations omitted).

       The underlying facts are as follows: Charlan purchased undeveloped

property in Lampeter Township, Lancaster County for $1.3 million, intending

to develop it into a residential neighborhood. Charlan, which had a business

relationship with Charter Building, entered into the Agreement with Charter

Building pertaining to the development of the property, known as Mill Creek.

The Agreement, dated September 19, 2002, contemplated that Charlan would

complete the land improvements,3 estimated at $8.6 million, and then sell the

237 lots to Charter Building.4

____________________________________________


3  The improvements included, inter alia, installation of streets, sidewalks,
walking paths, storm water management systems, site grading and street
lighting. See infra, at n. 3.

4Mill Creek originally had five phases, but Phase 4 was eliminated because
Charlan sold the land to Charter Building for $670,000.00. Charlan, therefore,
was relieved of its obligation to complete the improvements associated with
Phase 4.


                                           -3-
J-A02009-19



       Thereafter, disputes arose as to the duties and obligations of the parties

under the Agreement. Charlan contended it was required to complete

improvements up to $8.6 million, and that any additional required

improvements would be the responsibility of Charter Building.            Charter

Building contended that if improvements cost less than $8.6 million, Charlan

was required to remit one-half the savings to Charter Building, and if

improvements cost more than $8.6 million, Charter Building and Charlan

would evenly share the additional costs. Charter Building would pay its 50%

share of the additional costs in 237 installments, as it purchased lots from

Charlan.5

       Further, according to Charter Building, the Agreement provided that,

depending upon which pricing method was used (aggregate-sum pricing or

fixed-price method), Charter Building might be obligated to pay an additional

amount for the purchase of each lot if the improvements totaled more than

$8.6 million. In other words, Charter Building would be required to reimburse

Charlan for one-half of the “excess” improvement costs if the aggregate-sum

pricing method were used. If the fixed-price method were used, then Charter

Building would have no obligation to reimburse Charlan for any portion of the

improvement costs overruns. At trial, Charlan’s representative testified that

Charter Building was responsible for 100% of the costs in excess of $8.6

million, regardless of which method was used.
____________________________________________


5As stated above, the development was to consist of 237 lots. See supra,
at p. 2.

                                           -4-
J-A02009-19



       In 2006, Charlan informed Charter Building that it had spent $8.6 million

on improvement costs and thereafter claimed that it had exceed the Adjusted

Improvement Costs Budget (AICB).6 Trial Court Opinion, supra at 10, citing

N.T. Bench Trial, 1/4/18, at 90-92; N.T. Bench Trial, 1/5/18, at 183-84, 237.

At the beginning of the 2008 housing crisis, sales of lots and homes in Mill

Creek essentially ground to a halt, and Charlan, which had a mortgage on the

undeveloped property, was concerned about foreclosure.               Charlan was no

longer in a position to continue paying for improvements in accordance with

the Agreement. Thus, Charter Building agreed to pay for improvements with

the understanding that, once the economy improved and sales picked up,

Charlan would reimburse Charter Building for one-half the costs in excess of

the AICB.

       Between 2008 and 2010, the height of the housing crisis, only a few lots

sold; zero lots sold in 2009 and only two lots sold in 2010. In 2012, as the

economy began to improve, lot sales began to pick up.

       As of October 31, 2012, Charter Building provided an accounting to

Charlan, showing that Charlan’s share of the excess improvement costs

beyond the AICB was $592,122. Charter Building indicated to Charlan that it

would accept $325,000 in settlement of $592,122 amount. Charlan, in a May

15, 2013 email to Charter Building, agreed to “reimburse” Charter $325,000.

Charter     presented    Charlan     with      an   Amendment   to   the   Agreement,
____________________________________________


6The cost of Phase 4 improvements that Charlan was not required to complete
was $605,576.24; $8.6 million less that amount is the AICB - $7,994,423.76.

                                            -5-
J-A02009-19



memorializing this agreement, but Charlan never signed it. See Trial Court

Opinion, supra at 9, 25; N.T. Bench Trial, 1/4/18, at 72-73.

      In July 2013, Charlan instructed its Comptroller, Julie Landis, to shred

the last seven (7) years of invoices relating to Mill Creek, thus destroying

documentation of what Charlan allegedly spent on improvements in 2005 and

earlier. See Order, 6/11/18 (amending findings of fact). In a September 4,

2013 email from Charlan to Charter Building, Charlan stated that it was

obvious the parties “can’t work this out. You have our last offer so do what

you feel you need to.” Email from Doug Desmond [of Charlan] to Rob Bowman

[of Charter Building], 9/4/13, Charlan’s Exhibit 29.

      On February 13, 2015, Charter Building filed suit against Charlan,

alleging breach of contract and related claims, and seeking to recover

improvement costs pursuant to the Agreement. Charter Building filed an

amended complaint on April 10, 2017, based on post-complaint discovery,

that Charlan had not actually reached the AICB amount (of $7,994,423.76).

      In its complaint, Charter Building alleged that after the Agreement was

signed, “Charlan did not have the funds to pay for all of the Improvements

and requested that [Charter Building] pay for the Improvements.” Complaint,

2/13/15, at ¶ 20. Charter Building also alleged that Charlan assured it “that

it would reimburse [Charter Building] for the amount it had to spend to

complete the Improvements up to the $8.6 million threshold[, and o]nce the

costs exceeded $8.6 million, Charlan would reimburse [Charter Building] for

half the amount spent by [Charter Building] thereafter.” Id. at ¶ 21. See

                                     -6-
J-A02009-19



also id. at ¶ 33. In reliance on Charlan’s promise, Charter Building averred

that it incurred costs in the amount of $1,246,891.00. Id. at 22.

      Charter Building claimed that it had agreed to use its own funds for

improvements, “based on its expectation and the understanding between [the

parties] that Charlan would reimburse [Charter Building] for one hundred

percent of the amount it spent up to the $8.6 million specified in the

Agreement, and fifty percent of the amount spent by [Charter Building] above

and beyond the $8.6 million threshold specified in the Agreement.” Id. at ¶

29. Further, Charter Building averred that “Charlan failed to pay for the first

$8.6 million in Improvements Costs and [Charter Building] was required to

pay for some of the Improvements that were clearly Charlan’s responsibility.”

Id. at 34.

      Robert P. Bowman, President of Charter Building, testified why it was

Charter Building’s position that Charlan had not paid the threshold $8.6 million

in improvement costs:

      [W]hen we asked for information, backup, this detailed report was
      provided, say, I think a handful of invoices. There is no – primarily
      no backup to this document. All we really have are these
      headings, what we assume are costs are under those headings
      that were spent at Mill Creek. But if I were just to take out the
      ones that are not improvement costs, the number falls
      dramatically from totals that are here to an amount that we
      believe were paid for improvement costs. So those are two
      reasons I believe that they didn’t hit that. One, I don’t have any
      verification of whether there were Mill Creek invoices or not. The
      second point is that the typical improvement costs which are
      contemplated under the [A]greement, there are a lot of costs on
      this list that aren’t considered improvement costs.



                                      -7-
J-A02009-19



N.T. Bench Trial, 1/4/18, at 91. Additionally, Bowman testified that he first

came to the conclusion that Charlan had not paid $8.6 million in improvement

costs “[a]fter we got this detailed summary,” which was in response to a

discovery request, after the original complaint had been filed in 2015. Id. at

92-93. He clarified that between 2007 and 2015, he had no reason to doubt

that Charlan had paid $8.6 million in improvement costs, because George

Desmond, general partner of Charlan, with whom he had had a business

relationship since 1999, had told him so. Id. at 92 (“George told me $8.6

million and I believed him.”). At trial, Charlan admitted that the Agreement

stated that it was required to complete all improvements shown on the

development plans.7



____________________________________________


7   The Agreement provides, as follows:

        5. RESPONSIBILITIES OF SELLER AND BUYER

        Seller [Charlan] shall be responsible for completion of all
        improvements required in connection with the Land Use Plan,
        recorded Subdivision Plan or Plans, and other plans submitted to
        and approved by all governmental entities having jurisdiction
        thereof (hereinafter collectively referred to as the “Development
        Plans”), in accordance with all requirements of all governmental
        entities having jurisdiction thereof, including all grading, streets,
        curbs, storm water system (excluding individual Lot storm water
        detention facilities, if any), common facilities including (but not
        limited to) the neighborhood center, recreational facilities, walking
        path, street lighting, common area landscaping, and public water
        and sanitary sewer lines, underground electric, telephone and
        other required utilities.



                                           -8-
J-A02009-19



       Following trial, the court issued findings of fact and conclusions of law.

In particular, the court found as follows:


       1. Charlan spent a total of $7,052,519.88 on Improvements;

       2. Charter Building incurred costs of $1,166,164.02 for Improvements;

       3. The total Charlan and Charter Building spent on Improvement Costs
          is $8,218,683.90;

       4. Charlan was solely responsible for paying the Adjusted Improvement
          Costs Budget of $7,994,423.76;

       5. The difference between the $8,218,683.90 and the Adjusted
          Improvement Costs Budget of $7,994,423.76, is $224,260.14;

____________________________________________


Lot Purchase Agreement, 9/19/02, at § 5. The Agreement also provided that
in the event the improvements totaled less than $8.6 million, Charlan would
pay half of the difference/savings to Charter Building:


       6. COSTS OF SELLER RESPONSBILITIES                     AND BUYER
       CREDIT

       Seller’s [Charlan’s] direct costs for the responsibilities of Seller as
       forth in Section 6 of this Agreement, including the development of
       all phases of Mill Creek, are estimated to total Eight Million Six
       Hundred Thousand and no/100 Dollars ($8,600,000.00)
       (“Improvement Costs”). . . . Upon the completion of the
       responsibilities of [Charlan] as set forth in Section 5 of this
       Agreement, if the Improvement costs shall be less than Eight
       Million    Six   Hundred      Thousand      and    no/100      Dollars
       ($8,600,000.00), [Charlan] shall pay to [Charter Building] one
       half of the difference between the final Improvement Costs and
       Eight Million six Hundred Thousand and no/100 Dollars
       ($8,6000,000.00).

Id. at ¶ 6.




                                           -9-
J-A02009-19


        6. Under section 3(a)(ii) of the Lot Purchase Agreement, Charter
           Building had to pay 50% of the Improvement Costs in excess of the
           budget to Charlan.8 This amounted to $112,130.07; [and]

        7. Since Charter Building had paid $1,166,164.02 for Improvements in
           place of Charlan, when it was only supposed to have paid
           $112,130.07, Charlan owed Charter Building the difference, which
           amounted to $1,054,033.95.


Trial Court Opinion, 5/7/18, at 12, 22-23. As noted above, the court entered

judgment in favor of Charter Building for $1,054,033.95. Charlan filed a post-

trial motion on May 17, 2018 and this timely appeal followed.
____________________________________________


8   Section 3(a)(ii) of the Agreement provides:

        a. For all Lots, [Charter Building] shall pay to [Charlan] as the
           Purchase price for each Lot[:]

              ii.    The aggregate sum of:

                     (1)    Twenty Three percent (23%) of the Base Price
                            of each home and Lot sold by [Charter Building]
                            as Builder to a Homebuyer; and

                     (2)    Fifty percent (50%) of the Lot Premium, if any,
                            paid by the Homebuyer; and

                     (3)    Fifteen percent (15%) of the price of Options
                            incorporated into the home sold by [Charter
                            Building] as Builder to the Homebuyer, and

                     (4)    In the event that Improvement Costs (as
                            defined in Section 6 of this Agreement exceed
                            the sum of $8,600,000, one two hundred thirty
                            sevenths (1/237) of fifty percent of the
                            difference between the total Improvement costs
                            and $8,600,000.

Lot Purchase Agreement, supra at 3(a)(ii).




                                          - 10 -
J-A02009-19



       We address Charlan’s first two claims together.           Charlan argues the

court erred in finding that the statute of limitations9 was tolled and in inferring

that Charlan misrepresented that it had paid $8.6 million in improvement

costs. Charlan argues that Charter Building’s cause of action accrued in 2006,

when Charlan first told Charter Building that it had satisfied the relevant

portion of the Agreement. See Trial Court Opinion, supra at 7, 10. Charlan

claims that Charter Building’s 2015 lawsuit, amended in 2017, is time-barred

as to the contract claim, and that the trial court erred in allowing the discovery

rule to toll the statute, thereby improperly increasing Charter Building’s

damages. Charlan relies on Fine, supra, to support its argument.

       In Fine, the Court stated “the discovery rule applies to toll the statute

of limitations in any case where a party neither knows nor reasonably should

have known of his injury and its cause at the time his right to institute suit

arises.” Id. at 859. Charlan is not entitled to relief under Fine.

       The    trial   court   found    that    Charlan   told   Charter   Building   in

“approximately 2006,” and “[i]n late 2007,” that it had spent $8.6 million

improvement costs and thereafter consistently claimed it had exceeded the

AICB. See id. at 7, 10.            Charlan produced a document entitled “Job

Transaction Detail Report,” which listed costs Charlan purportedly incurred at

Mill Creek; however, Charlan produced no invoices, bills, payments requests,

checks or evidence to support its claims, contending all documentation from
____________________________________________


9 Pennsylvania’s statute of limitations requires lawsuits upon a contract to
commence within four years. See 42 Pa.C.S.A. § 5525(a).

                                          - 11 -
J-A02009-19



2005 and earlier was destroyed in 2013.         See Order, 6/11/18 (amending

findings of fact).   Since Charlan destroyed its evidence, and presented no

evidence in support of its claims, the trial court, sitting as finder of fact, found

its witnesses not credible. The court found Charter Building credibly testified

that it was never provided with detailed invoices for amounts it was charged

by Charlan for improvements prior to 2008. See N.T. Bench Trial, 1/4/18, at

91-93 (Testimony of Robert Bowman).

      Significantly, the court concluded that Charter Building’s cause of action

against Charlan arose on September 4, 2013, when Charlan indicated it would

not be paying the previously-agreed reimbursements (for improvements paid

for by Charter Building during the height of the housing crisis).          Further,

Charlan indicated that if Charter Building would not accept reimbursement in

lots, Charlan essentially invited Charter Building to file suit, “[D]o what you

feel you need to.” Charter Building then filed its suit on February 13, 2015,

within the four-year statute of limitations.

      As the court reasoned, “it is not unusual for a party to agree to pay

money on another’s behalf based on agreement that the debt will be repaid

at an unspecified later time.” Trial Court Opinion, supra at 23. Here, the

court concluded that Charlan’s “obligation to repay the debt” arose, based on

the facts and circumstance here, “when the housing market rebounded.” Id.

at 23-24. In particular, it was not until after Charter Building filed suit and it

obtained Charlan’s Job Transaction Detail Report, that Charter Building’s claim

for the excess improvement costs accrued. The court determined that Charter

                                      - 12 -
J-A02009-19



was previously unaware that Charlan “did not actually incur costs up to the

[AICB] as Charlan told Charter Building in 2006 that it had spent $8.6 million

and thereafter consistently claimed that it had exceeded the [AICB]. Id. at

24, citing N.T., 1/4/18, at 90-92, N.T. 1/5/18, 183-84, 237.       Thus, the court

concluded, Charter Buildings’ claim for Charlan’s share of the excess

improvement costs was timely. Id. at 24.

      We also find Charlan’s argument that the court erred in “inferring an

affirmative act of misrepresentation” to justify tolling the statute of limitations,

misplaced. The trial court based its conclusion on the discovery rule-- that

the statute was tolled because Charter Building did not know, or could not

reasonably have known, of its damages until (a) Charlan indicated it would

not reimburse Charter, and (b) Charter Building received Charlan’s Job

Transaction Detail Report after the original complaint was filed.        Charlan’s

attempt to cast the trial court’s tolling of the statute as based on a “finding”

of misrepresentation, is a red herring. Fraudulent concealment is a separate

ground that may toll a statute of limitations. Charlan attempts to conflate the

two, arguing that a showing of fraud is required in order for the court to apply

the discovery rule to toll the statute. Fraud need not be shown in order for a

party to invoke the discovery rule.       As we noted in Gustine Uniontown

Assocs., Ltd. v. Anthony Crane Rental, Inc., 892 A.2d 830 (Pa. Super.

2006):

      The discovery rule is distinct from the issue of whether a party is
      equitably estopped from invoking the statute of limitations. Fine
      v. Checcio, 582 Pa. 253, 870 A.2d 850 (2005). The discovery

                                      - 13 -
J-A02009-19


      rule operates to toll the statute of limitations during the period the
      plaintiff’s injury or its cause was neither known nor reasonably
      knowable to the plaintiff. Id. The separate doctrine of fraudulent
      concealment tolls the statute based on an estoppel theory and
      provides that a defendant may not invoke the statute of limitations
      if through either intentional or unintentional fraud or concealment,
      the defendant causes the plaintiff to relax his vigilance or deviate
      from his duty of inquiry into the facts. Id. Thus, the former
      doctrine involves a plaintiff’s lack of knowledge and the latter
      doctrine pertains to a defendant’s conduct after the cause of
      action arose.

Id. at 835.n.2.

      Here, the court did not make a finding of misrepresentation; it

determined that the discovery rule applied. As the record supports the trial

court’s findings, we find no error. See Gleason v. Borough of Moosic, 15

A.3d 479 (Pa. 2011) (where complaining party is reasonably unaware that his

or her injury has been caused by another party’s conduct, discovery rule

suspends, or tolls, running of statute of limitations). See also Ruthrauff,

supra at 888; John B. Conomos, Inc. v. Sun Co., Inc., 831 A.2d 696, 703

(Pa. Super. 2003) (our task is to “determine whether there is competent

evidence in the record that a judicial mind could reasonably have determined

to support the finding.”).

      Charlan’s final claim, that the court erred in not finding Charter Building

was estopped from changing its “acceptance that $8.6 million in Improvement

Costs had been paid by Charlan,” is waived. Charlan did not raise this claim

in its May 17, 2018 motion for post-trial relief. See Chalkey v. Roush, 805

A.2d 491, 496 (Pa. 2002); Pa.R.C.P. 227.1.



                                     - 14 -
J-A02009-19



     We, therefore, affirm the judgment entered in favor of Charter Building,

and we direct the parties to attach a copy of Judge Brown’s comprehensive

opinion in the event of further proceedings in this matter.   See Pa.R.A.P.

1925(a) Order, 8/6/18; Findings of Fact/Conclusions of Law, 5/7/18.

     Judgment affirmed.


Judgment Entered.




Joseph D. Seletyn, Esq.
Prothonotary



Date: 4/26/2019




                                   - 15 -
                                                        Filed 7/25/2018 12:30:00 P�fMlJ+9,�Nt9tl� District
                                                                  ·          PROTHONOTA'RY1S OF1i11Tli:2018
                                                                                  LANCASTER, PA
                                                                           ***Electronlcally Flied*****
  IN THE COURT OF COMMON PLEAS OF LANCASTER COUNTY,                         PEm/si��:a:sAM ,
                         CIV JL ACTION - LAW

CHARTER HOMES AT MILL CREEK,
INC.,
               Plaintiff,

               vs.                                   No. Cl-15-01375

CHARLAN GROUP, L.P.,
               Defendant.

               &

CHARTER HOMES BUILDING CO.,
               Additional Defendant.

                     FINDINGS OF FACT AND CONCLUSIONS OF LAW
               AND NOW, this 4th day of May 2018, after trial of this case and the submissions

of the parties suggesting their proposed findings of fact and conclusions of law, the court makes

the following findings and conclusions.

                                          BACKGROUND

        1.    Charlan Group, L.P. ("Charlan") owned undeveloped property in West I .ampeter

Township which it purchased for $1,309,893.60. (N.T. 230, G. Desmond; N.T. 134, Grupe).

        2.    Charlan intended to develop the property into a residential neighborhood

consisting of approximately 90 home sites. (N.T. 9-10, Rowman; N.T. 230, G. Desmond).

        3.     Robert P. Bowman is the President of Charter Homes Building Company

("Charter Building") ("Charter.. used generally throughout for entities in which Bowman has I 00

percent ownership interests), which he started in J 998. (N.T. 8-9, Bowman}.

        4.    George Desmond is the general partner of Charlan and his two sons, Doug

Desmond and Greg Desmond, are limited partners in Charlan. (N.T. 9, Bowman; N.T. 230, G.

Desmond).
                              CHARLAN AND CHARTER DECIDE TO
                             DEVELOP MILL CREEK INTO A UNIQUE
                                RESIDENTIAL DEVELOPMENT

       5.      Charlan and Charter had a business relationship from having worked on a nearby

neighborhood called "Hunter's Ridge," where an entity owned by George Desmond was the

subdivision developer and lots were sold to Charter, who built homes on the lots. (N.T. 8-9,

Bowman). This lawsuit has arisen due to the breakup of the business relationships the parties

had established over the years.

       6.      In early 2000, Charlan talked to Charter Building about purchasing lots and

building homes at a nearby property that Charlan owned. This would later become known as the

Mill Creek Community ("Mill Creek"). (N.T. 8-9, Bowman; N.T. 230, G. Desmond).

       7.      Charlan and Charter approached West Lampeter Township about developing the

site so that it would be comprised of 237 lots or home sites. (N.T. 10, Bowman; N.T. 231, G.

Desmond).

       8.      The plan that Charlan and Charter Building prepared required Charlan to make

improvements that were needed for the residential neighborhood ("Improvements"). Lots would

then be sold to Charter Building, who would build homes on the lots for sale to consumers.

(N.T. 17-19, Bowman; N.T. 234, G. Desmond).

       9.      Charlan and Charter estimated that the cost of the Improvements ("Improvement

Costs'') would be $8.6 million. (N.T. 19, Bowman; N.T. 234, G. Desmond).

       IO.     Charter and Charlan (specifically Robert Bowman and George Desmond) had

land development plans prepared showing all the work that West Lampeter Township required,

such as grading, streets, water, sewer, curbs, lights, and similar items ("Development Plans").

(N.T. 234-236, G. Desmond; N.T. 12-13, Bowman; Exs. P-22-28).



                                                2
        11.     Six (6) phases were contemplated at Mill Creek, but two (2) were eventually

combined so there were a total of five (5) phases. (N.T. 15, Bowman; N.T. 231, G: Desmond).

        12.     The Development Plans showed Improvements that Charlan would be required to

make. (N.T. 18-19, Bowman; Exs. P-22-28).

               Cl IARLAl\ AND CHARTER ENTER INTO A LOT PURCHASE AGREEMENT
              CONCER..XING THE MILL CREEK DEVELOPMEKT AND THE SALE Of LOTS

       13.      Charter and Charlan also entered into a contract titled "Lot Purchase Agreement,"

which outlined their respective duties and obligations for the development of Mill Creek. (Ex. P-

1; Ex. D-1; N.T. 2ff, Bowman; N.T. 232, G. Desmond).

       14.      The Lot Purchase Agreement was signed by Robert Bowman on behalf of Charter

Building and George Desmond on behalf of'Charlan, (Ex. P-1; Ex. D-1).

       15.      The Lot Purchase Agreement contemplated that there would be 23 7 lots that

Charlan would sell to Charter Building. (Ex. P-1; Ex. D-1).

       16.      The Lot Purchase Agreement permitted Charter Building to assign its interest in

the Agreement, without Charlan's authorization, to any entity owned 100 percent by Robert P.

Bowman, and provided as follows in that regard:

       Except as specified herein, this Agreement may not be assigned or transferred by
       Duyer or Seller without the prior written consent, which consent shall not be
       unreasonably withheld, of the other party to this Agreement, No assignment shall
       relieve or discharge the assignor of its obligations pursuant to this Agreement. As
       to permitted assignments, this Agreement shall benefit and bind Seller and Buyer
       and their respective successors and assigns. Any assignment to a business
       entity of which Robert P. Bowman is a principal holding an ownership
       interest of not less than one hundred percent (100%) shall be deemed a
       permitted assignment.

(Ex. P-1; Ex. D-1, Section 9, Assignment) (emphasis added).

       17.      On October 10, 2002, Charter Building entered into a written assignment of the

Lot Purchase Agreement in which it assigned all of its rights and interest in the Lot Purchase


                                                3
Agreement with Charlan to Charter Homes at Mill Creek, Inc. ("Charter Mill Creek"). Robert P.

Bowman owns I 00 percent of both Charter Building and Charter Mill Creek, and assigned the

Lot Purchase Agreement for financing and accounting reasons. (Ex. P-2; N.T. 21, Bowman).

       18.    The Lot Purchase Agreement required Charlan to complete all Improvements

required by the Development Plans, specifically providing as follows:

       5. RESPONSIBILITIES OF SELLER AND BUYER

       Seller shall be responsible for completion of all improvements required in
       connection with the Land Use Plan, recorded Subdivision Plan or Plans, and other
       plans submitted to and approved by all governmental entities having jurisdiction
       thereof (herein a Iler collectively referred to as the "Development Plans"), in
       accordance with all requirements of all governmental entities having jurisdiction
       thereof, including all grading, streets, curbs, storm water system (excluding
       individual Lot storm water detention facilities, if any), common facilities
       including (but not limited to) the neighborhood center, recreational facilities,
       walking path, street lighting, common area landscaping, and public water and
       sanitary sewer lines, underground electric, telephone and other required utilities.

(Ex. P-1; Ex. D-1, Section 5; N.T. 19, Bowman).

       19.    Charlan contends that it was not required to complete all the Improvements.

Rather, Charlan's principal George Desmond testified that he believed Charlan was only

required to complete Improvements up to a maximum cost of $8.6 million, and that Charter

would be responsible for completing (and paying for) Improvements after that point. (N.T. 234,

239, G. Desmond).

       20.    During trial, Charlan's George Desmond admitted that the Lot Purchase

Agreement at Section 5, Responsibilities of Seller and Buyer, discussed above, provides that

Chari an is required to complete all Improvements shown on the Development Plans and

Desmond admitted that there is no limitation on the amount Charlan was required to spend in

order to do so. (N.T. 246-247, G. Desmond).




                                                4
        21.      The Improvements contemplated by the Lot Purchase Agreement are, by the

express language of Section 5, those that are shown on Exs, P-22 through P-28 which are the

Development Plans. (Exs, P-22-28; N.T. 234-236, G. Desmond). The parties' course of dealing

after the housing crisis hit in 2008, however, indicates that other costs were acquiesced to in the

scope of' 'improvements."

        22.      The Lot Purchase Agreement also provides that, in the event the Improvement

Costs total less than $8.6 million, Charlan must pay half of the savings to Charter. (Exs. P-1; D-

1, Section 6).

        23.      The Lot Purchase Agreement also addresses the prices at which Charter would

purchase lots from Charlan. It provides that Charter·would pay to Charlan the greater of fixed

prices (which increased on an annual basis), or prices comprised of 23 percent of the base price

of each home and lot, 50 percent of the lot premiums paid by the hornebuyers, and 15 percent of

the options purchased by the homebuyers. This is known as the aggregate sum method of price

calculation. (Ex. P-1; Ex. D-1; N.T. 232, G. Desmond).

        24.      Pursuant to the Lot Purchase Agreement, if the aggregate sum pricing method was

used, and in the event that the Improvement Costs exceeded $8.6 million, Charter was to pay an

additional amount for the purchase of each lot. Specifically, Charter was to pay one two-

hundred-thirty-seventh (1/237) of 50 percent of the difference between the total Improvement

Costs and $8.6 million. (Ex. P-1; Ex. D-1, Section 3(a){i i)( 4 )).

        2 5.     In other words, Charter was required to reimburse C harlan for 5 0 percent of the

excess Improvement Costs.




                                                   5
       26.     If the fixed price method of lot pricing was used pursuant to Section 3(a)(i) of the

Lot Purchase Agreement, Charter would have no obligation to reimburse Charlan for any portion

of the cost overruns incurred by Charlan to complete the lmprovements.

       27.     Although the fixed price method does not require Charter to pay any excess

Improvement Costs and the aggregate sum method requires Charter to pay half the excess

Improvement Costs, Charlarr's George Desmond testified that Charter was responsible for I 00

percent of the excess costs regardless of which method was used. (N.T. 255·256, G. Desmond).

       28.     Though the parties reduced their agreement to writing regarding the purchasing of

lots and the development of the property, their course of dealing over the following years was

inconsistent with some provisions of their written agreement.

       29.     The Lot Purchase Agreement contemplated that all of the Improvements would be

completed prior to Charter purchasing lots from Charlan, but that did not occur due to significant

interest in the development by home buyers, and Improvements were constructed concurrent

with the purchase of lots by Charter.

       30.     Mill Creek proved to be very attractive to the public, and Charter purchased 21

lots from Charlan soon after the Lot Purchase Agreement was signed. (N.T. 26, Bowman). -

       31.     Dy the end of 2006, and into early 2007, Charter had purchased approximately

150-175 lots from Charlan as Mill Creek was proving to be popular, with sales prices increasing

during that time frame.· (N.T. 26-27, Bowman).

       32.     Improvements were being constructed by Charlan while all these lot sales were

OCCUJTing.




                                                 6
       33.     Although Mill Creek was originally comprised of five phases, Phase 4 was

eliminated (because Charlan sold the land to Charter for $670,000) and Charlan was relieved of

its obligation to complete the Improvements associated with Phase 4. (N.T. 125, Grupe).

       34.     The cost or value of the Phase 4 Improvements that Charlan was not required to

complete was $605,5 76.24. (N .T. l 26, Grupe).

       35.     When this amount is deducted from the $8.6 million budget to complete the

Improvements, the resulting figure is $7,994,423.76 (the "Adjusted Improvement Costs

Budget"). (N.T. 126, Grupe; Ex. P-5).

       36.     In late 2007, Charlan informed Charter that it had spent $8.6 million on

.Improvement Costs. (N.T. 32, Bowman).

       37.     2008 also marked the beginning of the housing crisis, at which point sales of lots

and homes in Mill Creek essentially ground to a halt (N.T. 28, Bowman).

       38.     Charlan had a mortgage on the remaining undeveloped property issued by

Sovereign Bank, and George Desmond was concerned that the housing crisis and the lack of

sales at Mill Creek might result in a foreclosure on the property by the bank. (N .T. 244-245, G.

Desmond; N.T. 29-30, Bowman). Desmond was also concerned about having to pay taxes, HOA

fees, and costs for upkeep. (N.T. 244-245, G. Desmond).

       39.     George Desmond told Rob Bowman at that time that Charlan was no longer in a

position to continue paying for Improvements as required by the Lot Purchase Agreement.

Charter agreed to pay for Improvements and to reimburse Charlan for any costs Charlan incurred

with the understanding that once the economy improved and lot sales picked up, Charlan would

pay Charter back or reimburse Charter for half the Improvement Costs in excess of the Adjusted

Improvement Costs Budget. (N.T. 30, Bowman).



                                                  7
        40.    Between 2 0 0 8 and 2 0 l 0, there we re very few lot sales due to the housing crisis,

with zero lots sold in 2009 and only two in 2010. (N.T. 37-38, Bowman; Ex. D-18).

       41.     There were no lot sales at all for almost two years between May 7, 2008, and

March 5, 2010. (Ex. D-18). This was the height of the housing crisis.

       42.     Chari an sent statements to Charter and Charter reimbursed Charlan during this

time in accordance with the modification for Charter to pay the Improvement Costs until the

economy recovered. (Exs. D-9-17; N.T. 33-35, Bowman).

       43.     Charter paid the statements sent to it by Char Ian, which included financing costs,

legal fees, engineering fees, and township fees, (Exs, D-9-17). No evidence was presented that

Charter contested these financing costs, legal fees, engineering fees, and township fees by

asserting that Charter was not responsible as the costs were not defined as "improvements" under

the Lot Purchase Agreement

       44.     Charter also paid for Improvement Costs directly during this 2008-2010 time

frame. (Ex. P-4; Ex. P-6; N.T. 122-123, Grupe).

       45.     In 2012, lot sales finally began to pick up at Mill Creek as the economy improved,

and Rob Bowman requested that Charlan pay its share of the cost overrun and Improvement

Costs advanced by Charter, (N.T. 41-43, Bowman).

       46.     By 2012, Doug Desmond had become very active in Charlan. (N.T. 42, Bowman;

N.T. 270-271, D. Desmond).

       47.     Rob Bowman provided an accounting to Charlan's Doug Desmond showing that

as of October 31, 2012, Charlan's share of the excess Improvement Costs beyond the Adjusted

Improvement Costs Budget was $592, 122, and indicated that Charter would accept $325,000

from Charlan. (Ex. D-25; N.T. 43-44, Bowman; Ex. D-26).



                                                  8
        48.    On May 1 5, 2013, Char Ian agreed in writing to "reimburse" Charter $325, 000 for

expenses incurred by Charter Mill Creek up to that point. (Ex. D-27). Charlan also indicated

that in the future, all invoices for Improvement Costs would be pre-approved by both Charlan

and Charter and "split 50/50." (Ex. D-27; N.T. 47-48, Bowman),

       49.     Specifically, that email provided as follows:

          Rob, spoke with Pop and we agreed to wrap this up based on our last
          conversation:
          Reimburse Charter for $325,000 worth of value to settle carried expenses up to
          date of settlement.
          From date of settlement forward, invoices for included phases will be pre-
          approved by both parties, split 50/50 and paid monthly.
          Additional lot premiums will be split 50/50 and paid at settlement.
          These arc the current lot prices good though April 2014.
          Please respond with the premiums you will be adding for each lot and I will
          work with you to settle this out ASAP.

          Thanks,
          Doug

(Ex. D-27).

       50.     Charter presented Charlan with an Amendment to Lot Purchase Agreement to

memorialize the agreement for Charlan to reimburse Charter, but Charlan never signed it. (Ex.

D-28; N.T. 73, Bowman).

       5L     .. On September 4., 2013, Charlan's Doug Desmond emailed Robert Bowman,

essentially advising that if Charter was unwilling to accept payment in lots, Charter must "do

what you feel you need to." (Ex. D-29).

       52.     In July 2013, Julie I .and is, the Comptroller for George Desmond, was instructed·

to shred the last seven (7) years of invoices relating to Mill Creek. (N.T. 177, .180-182, Landis).

That meant that all invoices that would show what Char Ian allegedly spent on Improvement

Costs since 2005 were destroyed. (N.T. 199-200, Landis).



                                                 9
                                                                    .            �



                                                                                                               l
                                                                        -�




                                                                                                               I
'l   _/                                                                                                        I
                  53.     Julie �ndis began working forthe Desmonds in 2002, and 2013 was the first

          time they had shredded documents. (N.T. 199-200, Landis).
I
(
i                 54.     On January 30, 2015, Charter filed suit against Charlan, seeking damages

          representing Char Ian's share of the excess improvement Costs.

                  55.     George Desmond of Charlan acknowledged that where lot purchases are based on

          the aggregate sum calculation-Charlan and Charter are required to equally split excess

          Improvement Costs beyond the Adjusted lmprov_ement Costs Budget. (N.T. 249-250, G.

          Desmond)."

                  56.     Charlan never sold lots to Charter using the base price method. Rather, only the
                         ;,                                                              .
          aggregate sum method was used until 2008. (Ex. D-18). After that, George Desmond set lot
           '114               •           • •• -         J
                                                                             1       •
          prices based on what he thought was reasonable based on market conditions. (N.T. 261-202, G.
          •.
          Desmond).

                  57.     When the housing crisis occurred in 2008 and lot sales came to a halt, Charter and

          Charlan ser lot prices based upon amounts that Charlan determined would be sufficient to

          generate lot sales. (N.T. 261-262, G. Desmond).

                  58.     George Desmond provided lists of lots and the corresponding prices to Charter. ·
                                  '\

          (N.T. 262, G. Desmond). There is noevidence that the parties used the base price method of

          calculating lot prices.

                  59.     Charlan told Chart�r in 2006 that it had spent $8.6 million and thereafter
                   I

          consistently
                    I
                       claimed that it had exceeded the Adjusted Improvement Costs Budget. (N.T. 90-92,

          Bowman; Exs. D-9-17; N.T. 183-184, Landis; N.T. 237, G. Desmond).

                  60.     After filing suit in February 2015, Charlan produced� document entitled "Job

          Transacti�n o·�tail Report" listing all the costs that Charlan purportedly incurred at Mill Creek.



                                                             10
                b. Interest costs of $409,683.83

                c. Settlement costs of $22,362.10

        67.     The Job Transaction Detail Report also lists significant attorneys' fees but no

testimony or evidence of any invoices were submitted to allow the court to decode the invoices

referenced.

       68.     The total Charlan spent on Improvements is therefore $7,052,519.88.

       69.     In addition, Charter incurred Improvement Costs totaling $'1, 166, 164. 02. (Ex. P-

32; N.T. 141-142, Grupe).

       70.     The total Charlan and Charter spent on Improvement Costs is thus $8,218,683.90.

       71.     The Adjusted Improvement Costs Budget is $7 ,994,423. 76. The difference

between the $8,218,683.90 Charlan and Charter spent on Improvement Costs and the Adjusted

Improvement Costs Budget of $7,994,423.76 is $224,260.14. Assigning 50 percent to both

Chari an and Charter is $112, 13 0. 07 each.

       72.     Prior to receiving and having the opportunity to examine the Job Transaction

Detail Report, Charter had no reason lo know or suspect that Charlan was not telling the truth

when representing to Charter that the Improvement Costs actually exceeded the budget. (N.T.

91-92, Bowman) (testifying that until the Job Transaction Detail Report was produced, he

believed and had no reason to doubt George Desmond's statements that Charlan had spent $8.6

million).

                                   CHARLAN'S DA1\1AGE CLAlMS

       73.     Charlan seeks three categories of damages. The first is "Job Cost Reimbursement

owed for Mill Creek development from January 2013 (four years prior to filing counterclaim)

through November 30, 2017: $141,103.22." (Ex. P-33).



                                                   12
       74.     Charlan did not introduce a single invoice, bill, payment request, or check

representing any job costs incurred. Rather, Charlan introduced only Exhibit P-11 entitled "Job

Costs Post 4-28-2011" in support of this claim. However, neither Julie Landis nor anyone else

from Charlan was able lo identify which entries in Exhibit D-21 constitute the $141, 139.22

Charlan is seeking in this case.

               Q:      Have you yourself ever added up the January '13 and later entries
                       to calculate the figure of $141,139.22 or not?
               A:      I'm not sure where that figure comes from.
                       I don't have documents here.
               Q:      Understood, but do you have a recollection of ever having
                       calculated that figure yourself using these documents?
               A:      No.

(N.T. 215:18-24, Landis).

       75.     The second category of damages being sought by Char Ian is entitled "HOA Fees

Paid by Charlan from January 2013 (four years prior to filing counterclaim) through November

30, 2017: $51,244." (Ex. P-33).

       76.     Charlan did not introduce a single invoice, bill, payment request for HOA fees or

check representing payment of any HOA Fees.

       77.     In support of this claim, Charlan introduced only Exhibit D-22 entitled "Mill

Creek HOA fees Paid By Chari an Post 4-28-2011." (Ex. D-22; N.T. 210-211, Landis).

       78.     However, neither Julie Landis nor anyone else from Charlan could identify which

entries in Exhibit D-22 are included in the $51,244 being sought by Charlan. (N.T. 210-211,

Landis).

               Q:      Which ones constitute the 51,244 then?
                       Which arc not included, whichever is easier.
               A:      I'm not sure where that figure came from.

(N.T. 211:13-15, Landis).



                                                13
        79.       Third, Chari an asserts dam ages of $1, 172,00 0 as a resu l l of nine bui Id ing I ots that

Charter did not purchase.

        80.       Charlan contends that Charter breached the Lot Purchase Agreement by

announcing in 2016 that it would not purchase the remaining lots in Mill Creek. (Ex. P-33).

        81.       At trial, however, Charlan did not introduce any evidence regarding the

unpurchased lots or the price of those lots.

        82.       Also, Charter introduced a letter dated October 29, 2015, from Charlan's counsel

at the time, Brandon Harter, Esq. of Hartman Underhill & Brubaker, advising Charter that it was

relieved of the obligation to purchase any more Jots at Mill Creek. (Ex:P-30; N.T. 105-106,

Bowman). That letter stated in pertinent part as follows:

              My client hereby accepts that Charter Homes' proposal to immediately terminate
              the Jot purchase agreement dated September 19, 2002. As a result of this
              termination, effective immediately, Charter Homes is relieved of any further
              obligations to purchase and my client is relieved of any further obligations to sell any
              remaining lots in Mill Creek Development.

(Ex. P-30).

        83.       Charlan also testified that it sold some of the Jots to another builder, but no

evidence was introduced about the sales prices or any other aspect of the transactions.

(N.T. 241, G. Desmond).

                                           CONCLUSIONS OF LAW

        1.        The Lot Purchase Agreement is a valid and binding contract.

        2.        Contract interpretation is a matter for this court to decide and where a contract is

not ambiguous, a court must enforce it as written no matter how unjust one party feels it is.

        3.        Also, failure to read or understand a contract is not a defense lo its enforcement.

Wilson Area Sch. Dist. v. Skepton, 895 A.2d 1250 (Pa. 2006); Mormellow v. Monnellow, 682



                                                       14
A.2d 824, 826 (Pa. Super. 1996) (a party is bound by what it signs regardless of whether it

believes it is a good bargain).

        4.      It is well settled under Pennsylvania law that, in interpreting a contract, the

manifest intentions and purposes of the parties are of the utmost importance. Frickert v. Deiter

Bros. Fuel Co., 34 7 A.2d 701 (Pa. 1975).

        5.      The intention of the parties must be ascertained from the agreement itself, and the

court's inquiry should focus on what the agreement itself expressed and not on what the parties

may have silently intended. Empire Sanitary Landfill, lnc. v. Riverside Sch. Dist., 739 A.2d 651,

654 (Pa. Cm with. 1999) (citing Del. Co. v. Del. Co. Prison Employees Indep. Union, 713 A.2d

1135 (Pa. 1998)).

        6.      The law requires a court to ascribe a reasonable interpretation to an agreement. A

court must interpret an agreement in a way that is consistent with, and gives effect to, the

agreement as a whole. Mowry v. McWherter, 74 A.2d 154, 158 (Pa. I 950) (holding that it is

"necessary to consider all of [a contract's] parts in order to determine the meaning of any

particular part as well as of the whole"); Gaffer Ins. Co. v. Discover Reinsurance Co., 936 A.2d

1109, 1113 (Pa. Super. 2009) (holding that a "contract must be interpreted as a whole, and an

interpretation that gives effect to all of the contract's provisions is preferred"); Meeting House

Lane. Ltd. v. Melso, 628 A.2d 854, 857-58 (Pa. Super. 1993) (holding that "[o]ne part of a

contract cannot be interpreted so as to annul another part, and a contract must be construed, if

possible, to give effect to all of its terms"),

        7.      A fully integrated contract that requires all subsequent amendments be made in a

writing executed by all parties, however, may be amended orally upon a showing of clear and

convincing evidence. Rrinich v. Jencka. 757 A.2d 388, 399 (Pa. Super. 2000) (holding that a



                                                  15
written contract may be modified orally, even when the written contract provides that

modifications may only be made in writing, provided that the subsequent oral modification is

"proved by clear, precise and convincing evidence"), appeal denied. 771 A.2d 1276 (Pa. 2001);

accord Universal Builders, lnc. v. Moon Motor Lodge, Inc., 244 A.2d 10 (Pa. 1968).1

         8.       "In cases involving contracts wholly or partially composed of oral

communications, the precise content of which are not of record, courts must look to the

surrounding circumstances and course of dealing between the parties in order to ascertain their

intent." Prieto Corp. v. Gambone Constr. Co., 100 A.3d 602, 609 (Pa. Super. 2014) (citations

and internal quotation marks omitted).

         9.       Surplusage is unnecessary or excessive wording, and Pennsylvania courts will not

treat words as mere surplusage. Courts have consistently held that "our rules of construction do

not permit words in a contract to be treated as surplusage ... if any reasonable meaning

consistent with the other parts can be given to it." Tenos v. State Farm lns. Co., 716 A.2d 626,

63 l (Pa. Super. 1998); accord Clarke v. MMG lns. Co., 100 A.3d 27 l (Pa. Super. 2014); Gralka

v. Isaacson, 556 A.2d 888, 889 (Pa. Super. 1989).

         I 0.     Additionally, it is a fundamental principle of contract interpretation that where a

contract lists certain items, and states that it includes but is not limited to these items, other items

can fall within the scope of the section or provision, provided they are of a type the same or




 I
   Both Charter and Charlan agree the parties orally modified the Lot Purchase Agreement. The results are the same
in this case regardless of whether the court characterizes the parties' actions as {I) oral modifications; or (2) waivers
of their rights, followed by retractions of those waivers. See Daniel� v. Phi la. Fair Hous. Comm'n, 513 A.2d 501,
502 (Pa. Cmwlth. 1986) ("With respect to the question of whether the landlord waived her right to enforce the lease
provision concerning payment of utilitybills, we note that, under the general principles of contract law, a party who
has made a waiver affecting an cxeeutory portion of a contract may retract the waiver by notifying the other party
that strict performance will be required of any term waived, unless such a retraction would be unjust because ofa
material change of position made in reliance on the waiver.").

                                                            16
similar to the specifically included items. Dep't ofEnvtl. Prot. v. Cumberland Coal Res .• L.P.,

102 AJd 967, 972 (Pa. 2014).

         11.        Under the Lot Purchase Agreement, Charlan was responsible to perform all of the

Improvements in connection with Mill Creek.

         ! 2.   The Improvements that Char Jan was required to make arc identified in the

Agreement as the following items:

                •     grading                               •   street lighting
                •     streets                               •   common area landscaping
                •     curbs                                 •   public water
                •     storm water system                    •   sanitary sewer lines
                •     neighborhood center                   •   underground electric
                •     recreational facilities               •   telephone
                •     walking path                          •   other required utilities

         13.        While the items enumerated in Section 5 of the Lot Purchase Agreement are not

the only items that constituted Improvements, only work that is similar to the enumerated items

are included. Cumberland Coal, 102 A.Jd at 972 (stating the word "including" followed by a list

docs not mean the term is limited to items enumerated in the list, but items not listed must be

similar in nature to those listed).

         14.    Under the Lot Purchase Agreement, it was estimated that the Improvement Costs

would be $8.6 million.

         15.        However, the Improvement Costs included Phase 4, which was removed from the

development, and Charlan was relieved of the obligation to complete the Improvements for that

phase.

         16.    The parties agreed that the $8.6 million budget had to be _reduced to the Adjusted

Improvement Costs Budget of$7,994,423.76.




                                                   17
           17.      Charlan was therefore solely responsible for paying the Adjusted Improvement

Costs Budget of $7,994,423.76.

           18.      After analyzing Charlan's Job Transaction Detail Report, and considering the Lot

Purchase Agreement and the parties' course of dealing, the court concludes Chari an spent

$ 7, 0 52 ,519 .8 8 on Improvement Costs.

        19.         Charlan 's Job Transaction Detail Report aggregates total costs by phase as

follows:

                    a. Phase 1:            $7, 194,037.00

                    b. Phase 2:            $2,605,221.94

                    c. Phase 3:            $156,029.69

                    d. "Overages":         $541, 732.17

       20.          While Charlan's Job Transaction Detail Report purports to indicate that Charlan

spent more than the Adjusted Improvement Costs Budget of $7,994,423 .76, not every cost

constitutes an Improvement Cost under the Lot Purchase Agreement

       21.          For example, Charlan incorrectly asserts that loan interest, letter of credit fees and

interest, costs to purchase the land, legal fees, and fees to prepare the plans depicting the

Improvements are Improvement Costs.

       22.          The court's interpretation is consistent with the West Lampeter Subdivision and

Land Development Ordinance and the definition of Improvements contained in Section 240�7,

which defines subdivision improvements as follows:

                 Physical changes to the land, including, but not limited to, grading, paving,
                 curbs, gutters, storm sewers, draining improvements to existing water courses,
                 sidewalks, street signs, monuments, water supply facilities, and sewage
                 disposal facilities that may be necessary to produce usable and desirable
                 de"'.elopment



                                                      18
(Ex. P-31, Section 240-7).

       23.      Improvement Costs under the Lot Purchase Agreement equate to the costs of

physical improvements to the land and the course of dealing of the parties that also included

lraffic study related costs, interest costs, and settlement costs.

       24.     George Desmond of Char Ian incorrectly believed that Improvement Costs were

"everything that we needed to put together in order to get to final subdivision and to get in and

start doing the mechanical work." (N.T. 234, G. Desmond). Mr. Desmond also incorrectly

believed that Improvement Costs included "anything having to do with Mi 11 Creek." (N.T. 257-

258, G. Desmond).

       25.     Mr. Desmond admitted, however, that the Lot Purchase Agreement does not state

that Improvement Costs consist of "anything having to do with Mill Creek" and he stated that he

does not know why that is:

       Q:      Do you believe that anything that you spent, any money that you spent that
               had anything to do with the Mill Creek Development qualified as an
               improvement cost as for purposes of the seller's obligation?
       A:      Basically, yes. We looked at it that way.
       Q:      Does the agreement also say that anything having to do with Mill Creek
               Development constitutes an improvement cost?
       A:      Basically does, yes, through direct costs, indirect costs and --
       Q:      Please turn to the deposition transcript, if you sti 11 have it in front of you.
               Go to Page 86.
       A:      Yes.
       Q:      I ask you to look at Line 2.
               The question I put to you: Why doesn't the agreement simply say that
               seller shall complete all improvements that have anything to do with the
               deve I opm ent?
               The answer was, well I don't know why it doesn't say that.
               That is the answer you gave at this deposition in November 2016.
       A:      Apparently so, yes.

(N.T. 257:14-258:11, G. Desmond).




                                                   19
       26.     While the items listed in Section   j    of the Lot Purchase Agreement are not the

only items constituting Improvements, it must be a physical improvement to the land to

constitute an Improvement.

       27.     The Lot Purchase Agreement provides that if the Improvement Costs exceed the

budget, and if the lot prices are based on the aggregate sum calculation, Charter is responsible to

pay 50 percent of the Improvement Costs in excess of the budget. (Ex. P-1, Section 3(a)(ii)).

       28.     According to the Lot Purchase Agreement, Charter was to pay its 50 percent share

of the Improvement Costs overrun in 237 increments as it purchased lots from Charlan. This

amount was to be added to the other three components of the purchase price: the base price, the

lot premium and the options.   hL.
       29.     The parties modified the Agreement relating to the mechanics by which they

shared the excess Improvement Costs. They did so because Mill Creek proved to be popular and

Charlan sold lots to Charter before Charlan completed the Improvements.

       30.     The Lot Purchase Agreement contemplated that Charlan would complete the

Improvements and that the Improvement Costs would be known before Charlan sold any lots to

Charter. Thus, any excess costs would be known before any lots were sold so that Charter's 50

percent share could be divided into 237 increments and paid as part oflot purchases.

       31.     Because that proved to be infeasible since Improvements were being made

concurrently with lot sales, Charter and Chari an modified the Lot Purchase Agreement such that

Charter's share of the additional costs for Improvements would not be paid as part of lot

purchases.

       32.     The Lot Purchase Agreement clearly contemplates a sharing of savings and a

sharing of any excess Improvement Costs,



                                                   20
         33.      Whether Charlan may have believed that Charter was responsible for all excess

improvement Costs is irrelevant Empire Sanitary 1.andfilL 739 A.2d at 654 (parties' subjective

beliefs about contract are irrelcvanl). The relevant inquiry is the language of the agreement

         34.      Charter and Charlan agreed that Charter would begin paying Improvement Costs

directly and Charlan would reimburse Charter Mil I Creek when the economy improved. This

was due to the downturn in the housing market and the fact that very few lot sales were occurring

beginning in late 2007 as a result of economic condiLions.

         35.      In 2007, Charter began paying Improvement Costs and ultimately spent

$1, 166, 164.02 and did so with the expectation that Charlan would pay its share of the

Improvement Costs overrun when economic conditions improved and lot sales picked up.

         36.      It is not unusual for parties to a contract to deviate from the strict adherence to the

mechanics of the agreement, or to modify an agreement insofar as timing and logistics are

concerned, and such modifications are enforceable. Universal Builders. 244 A.2d at 10; Brinich,

757 A.2d at 388.

         37.      In this case, the parties modified the agreement as a result of the fact that lot sales

occurred before completion of all Improvements, a housing downturn in late 2007-2011 resulted

in Charter paying Improvement Costs during the downturn to be repaid for Charlan's share later,

and to include additional costs in the understanding of Improvements.

         38.      While the Lot Purchase Agreement provides that modifications must be in

writing, the law is clear that the requirement for written modifications can be waived. Universal

Builders, 244 A.2d at 1 O; Brinich, 757 A.2d at 3 88. 2



; See Daniels, 513 J\.2d at 502-03 ("In the case at bar, the record shows that, for a period of time, the landlord
voluntarily assumed responsibility for paying the utility hills of the leased premises, and therefore waived the lease
provision requiring Appellant to pay such bills. However, when the landlord informed Appellant that, as of January
 1, 1983, Appellant would be required to pay her own utility bills, the prior waiver of the lease term was effectively

                                                          2[
         39.      Charlan admits that the Lot Purchase Agreement was orally modified and is

judicially estopped from arguing that it was not capable of oral modification. (Ex. D-33).

         40.      A court must construe an agreement as a whole and here, it is clear that the

Agreement contemplates a sharing of any savings and a splitting of costs in excess of the

Improvement Costs budget. Mowry, 74 A .2d at 158 (holding that it is "necessary to consider all

of [a contract's] parts in order to determine the meaning of any particular part as well as of the

whole"); Gaffer, 936 A.2d al 1113 (holding that a "contract must be interpreted as a whole, and

an interpretation that gives effect to all of the contract's provisions is preferred"); Melso, 628

A.2d at 857-58 (holding that "lo ]ne part of a contract cannot be interpreted so as lo annul another

part, and a contract must be construed, if possible, to give effect to all of its terms").

         41,      The Lot Purchase Agreement required the parties to equally share any savings and

to split excess Improvement Costs. The fact that they decided to modify the mechanics or details

of the way in which the costs were shared does not extinguish the cost sharing requirement.

         42.      The court concludes the total Charlan spent on Improvements is $7,052,519.88.

         43.      Charter incurred costs of$1,166,164.02 for Improvements.

         44.      The total Charlan and Charter spent on Improvement Costs is thus $8,218,683.90.

         45.      The Adjusted Improvement Costs Hudget is $7,994,423.76.

         46.      Charlan was solely responsible for paying the Adjusted Improvement Costs

Budget of $7,994,423.76.




retracted and Appellant was responsible for the utility expenses. In light of the fact that Appellant initially agreed to
assume such cxpen.�es when she entered into the lease, it is not now unjust to impose upon her the duty to pay her
utility bills, especially when there is no indication that she has in any way changed her position in reliance on the
belief that the landlord would continue to assume responsibility for those bills.").

                                                           22
        84.      The difference between the $8,2.18,683.90 Charlan and Charter spent on

Improvement Costs and the Adjusted Improvement Costs Budget of $7,994,423.76 is

$224,260.14.

        85.      Under Section 3(a)(ii) of the Lot Purchase Agreement, Charter had to pay 50

percent of the Improvement Costs in excess of the budget to Charlan. This amount is

$112,130.07.

       86.       Because Charter paid $1, 166, 164.02 for Improvements in place of Chari an, when

it was only supposed to have paid $112,130.07, Charlan owes Charter the difference of

$1,054,033.95.

       47.       Charter's cause of action against Charlan seeking to recover reimbursement from

Charlan of Charlan's share of the excess Improvement Costs arose on September 4, 2013, when

Charlan indicated it would not be paying the previously agreed reimbursement and that if Charter

would not accept reimbursement in lots, Charlan essentially invited Charter to file suit, which

Charter did on February 13, 2015.

       48.       The statute of limitations for actions on a contract is four years. 42 Pa. C.S.A.

§5525(a). A cause of action accrues when a party knows or should reasonably know that the

other party breached the contract. Packer Soc'y Hill Travel Agency, Inc. v. Presbvterian Univ.

of Pa. Med. Or., 635 A.2d 649, 652 (Pa. Super. 1993); Thorp v. Schoenbrun, 195 A.2d 870, 872

(Pa. Super. 1968) {breach of contact cause of action accrues at time of breach).

       49.       1t is not unusual for a party to agree to pay money on another's behalf based on

agreement that the debt will be repaid at an unspecified later time. In that situation, the

ob ligation to repay the debt arises after the passage of a reasonable time based on the facts and




                                                  23
circumstances of the situation. Wilker v. Jenkins, 88 Pa. Super. 177.(1926). Here, the parties

agreed that Chari an would reimburse Charter for its share when the housing market rebounded.

        50.     Charter's claim for Charlan' s share of the excess T mprovement Costs did not

accrue until after the lawsuit was filed and Charter obtained Char Ian's Job Transaction Detail

Report. Previously, Charter was not aware that Char Ian did not actually incur costs up to the

Adjusted Improvement Costs Budget as Chari an told Charter in 2006 that it had spent $8.6

million and thereafter consistently claimed that it had exceeded the Adjusted Improvement Costs

Budget. (N.T. 90-92, Bowman; Exs. D-9-17; N.T.183-184, Landis; N.T. 237, G. Desmond).

        51.     Under Pennsylvania law, Charter had four years from the date of the discovery of

Charlans breach of the contract to institute legal action. Pontiere v. Dinert, 627 A.2d 1204 (Pa.

Super. 1993); Med-Mar. Tnc. v. Dilworth, 257 A.2d 910 (Pa. Super. 1969).

        5 2:    Charter's claim for Charlan' s share of the excess lmprov ement Cos ls is timely.

        53.     Chari an is not entitled to recover damages for "Unpurchased Lots" for several

reasons. First, it did not introduce any evidence to support the damages, such as lot prices.

Second, Charlan released Charter from the obligation lo purchase any more lots in Mill Creek by

virtue of its October 29, 2015, letter to Charter, expressly indicating that Charter is relieved of

any further obligations to purchase any lots in Mill Creek and Charlan is relieved of the

obligation lo sell lots to Charter.

        54.     Chari an seeks $141, 103 .22 for "Job Cost Reimbursements Owed for Mill Creek

Development from January 2013 through November 30, 2017." However, Charlan failed to

introduce any documentation to substantiate these costs, such as invoices, bi I ls, requests for

payment, or checks.




                                                 24
        55.    Charlan produced only a list of Improvement Costs that Charlan claims it has

been incurring, but Charlan could not identify which entries on the list are the job costs for which

it seeks damages in this action. (Ex. D-21).

       56.     Charlan also seeks damages of $51,244 for "HOA Fees Paid by Charlan from

January 2013 through November 30, 2017."

       57.     Once again, however, Charlan produced no documentation to substantiate the

HOA fees such as invoices, bills or requests for payment of HOA fees, or checks showing

payment of such fees.

       58.     In addition, Charlan produced an exhibit entitled "Mill Creek HOA fees paid by

Charlan post 4-28-2011." However, Charlan was unable to identify which entries on this chart

comprise the $51,244 that Char Ian seeks in this action.

       59.     The court finds that Charlan has not proven its damages for HOA fees or job cost

reimbursements with reasonable certainty, and such claims are denied.

       60.     On May 15, 2013, Charlan acknowledged its obligation to reimburse Charter for

Improvement Costs that Charter incurred as a result of the Charter-Chari an modification to the

Lot Purchase Agreement.

       61.     In September 2013, Char Ian offered to reimburse Charter for costs incurred by

reimbursing Charter in building lots, and stated that if that offer was unacceptable to Charter,

Charter would do what it had to do.

       62.     Charter filed suit in 2015, approximately two (2) years following Charlan's

September 2013 email declining to pay Charter $325,000 in cash.

       63.     Charlan's breach of the Lot Purchase Agreement occurred when it advised

Charter in September 2013 that it was not willing to pay Charter in cash and telling Charter "to



                                                 25
do what it needed to do," and Charter's breach of contract suit filed approximately two (2) years

later was timely.

          64.   Charter did not become aware that Char Ian did not actually incur Improvement

Costs up to the threshold until after it filed suit in 2015 and obtained documents from Charlan.

          65.   The court therefore finds that Charter Mill Creek is entitled to judgment in its

favor and against Charlan in the amount of$ l,054,033.95.



                                                      BY THE COURT:



                                                          �
                                                      LEONARD G. BRO\VN, III, JUDGE

Copies:         Timothy Woolford, Esq.G".$G:"R.\Jbb
                C. Edward Browne, Esq. Mt\-lL- .- \

ATTEST:��·




                                                      N011CE c;: ENTRY VF ORr,�R OR !)!:CREE
                                                      PURSUANT TO PA. R.C.P NO �J'J
                                                      NOTIFICATIOI'!. THE ATIACHED DOCUMENT
                                                      HAS BEEN FILED It; THE CASE
                                                      PROTHONOTAiW Of u\NCAST;"!fCC., PA
                                                      DATE:   S-� -\ <[       �




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