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“The less [she] knew, the better” are the actual words uttered by a listing agent, upon her clients’ inquiry concerning the extent of their disclosure obligations. Trusting their astute realtor and obviously feeling justified, the husband and wife sellers, William and Connie Rockey, took the liberty of omitting an indubitably critical chuck of information. Simply put, their Washington County residence had been plagued by water infiltration. And in an obvious effort to satisfy the threshold requirements of the commonwealth’s Disclosure Law, the Rockeys did put prospective purchasers on notice of that water damage (sort of). Eventually, Richard and Melanie Schwartz took a serious liking to the Rockey property. Mind you, the disclosure did in fact reveal the prior water infiltration issue; the Schwartzes were on notice of something. The water issues were described as “storm drain backup” and “storm drain plugged causing water backup.” Additionally, remediation in the form of an external sump pump was made. Most notably, however, what could only be characterized as a major flooding event occurred just two months prior to listing. Unbelievably, that activity was never disclosed to the Schwartzes. So they entered into the deal under the false impression that prior water penetration, which had occurred, was resolved � there could be nothing further from the truth. Some $214,000 and one home inspection later (during which the sellers artfully maintained at least some degree of obscurity), the Schwartzes bought it, “home sweet home.” But just how long would it be before the sweetness inevitably soured? As fate would unfortunately have it, shortly after settlement, the Schwartzes got wind of the most recent and major flooding. As it turned out, there was a glaring omission from the disclosure. Only a couple months prior to listing, the outside stairwell experienced a substantial accumulation of water. In an effort to alleviate pressure, the deluge of water was discharged into the finished basement (the water level actually rose to about 2 feet). Well aware of the appeal of a finished basement and desirous of maximizing any and all equity, the Rockeys saw to it that the “big one,” if you will, was essentially reduced to a non-event. So they took it upon themselves to immediately and personally make the necessary repairs. Naturally these included purely aesthetic ones, painting, carpeting, wallboard replacement and the like. Justifiably peeved, the Schwartzes did the only thing they could do: Take it to the courts. After all, had they realized that water infiltration issues persisted even after prior remediation efforts had been made, the Schwartzes very well might have passed altogether. There is also the distinct possibility that their offer would have been significantly lower, in light of the home’s true unconcealed value. Yet they never got that chance. Simply put, they were defrauded. Originally they proceeded upon common law fraud and Unfair Trade Practices and Consumer Protection Law (UTPCPL) claims, seeking compensatory damages under both theories, as well treble damages and counsel fees under the UTPCPL. The Schwartzes altered the course of their attack, though, by amending to substitute a demand for rescission and restitution. They were relatively successful at the county level, achieving a nonjury verdict, with an award for compensatory damages of $26,000, representing the diminution in value. Yet the court refused to award rescission, restitution, treble damages and attorney fees. As for relief under the UTPCPL, the lower court adhered to an extremely conservative interpretation of the statute. More specifically, that court felt it incumbent to heed instruction from the general principles governing punitive damages. Nevertheless, how does such a narrow approach comport with the express edicts contained within the statute itself? As all of us are well aware, the UTPCPL charges a court with discretion in the face of an aggrieved consumer who qualifies for relief: “Any person who purchases or leases goods or services primarily for personal, family or household purposes and thereby suffers any ascertainable loss of money or property, real or personal, as a result of the use or employment by any person of a method, act or practice declared unlawful by Section 3 of this act may bring a private action to recover actual damages or $100, whichever is greater. The court may, in its discretion, award up to three times the actual damages sustained, but not less than $100, and may provide such additional relief as it deems necessary or proper. The court may award to the plaintiff, in addition to other relief provided in this section, costs and reasonable attorney fees.” Now if a court balks at the idea of exercising that discretion, even in the presence of a clear-cut fraud, this key facet of the statute appears to have been rendered superfluous. Assuredly the General Assembly did not intend such a result. On appeal, the Superior Court addressed the contours of relief under the UTPCPL, in addition to reviewing prerequisites to attaining rescission. Firstly, the intermediate court recognized a litigant’s right to amend to pursue rescission as additional information becomes available via discovery. And in the case at bar, the lower court granted leave to amend, satisfied with the plaintiffs’ due diligence. As such, that court’s decision to deny such relief necessitated additional consideration. Secondly, the Superior Court took issue with the lower court’s UTPCPL analysis; a finding of fraud, standing alone, does warrant treble damages. The state Supreme Court ultimately addressed the election of remedies and UTPCPL issues, making pronouncements not to be taken lightly by transactional attorneys and litigators alike. As to the availability of rescission, the plaintiffs here were penalized for what some might perceive to be justifiable delay. That is, the Schwartzes contended that they declined to seek equitable relief ab initio without the benefit of thorough discovery. Eventually, however, such a remedy became fitting and it was then that they decided to amend. At bottom, the key issue involves whether the plaintiffs acted promptly enough, once they deemed rescission to be an appropriate remedy. Did they act with sufficient promptitude? Logically, after all, unnecessary delay makes restoring the parties to the status quo ante less feasible. Additionally, sellers argued that the Schwartzes were even foreclosed from pursuing rescission; an original election should be binding. Without concluding whether inconsistent remedies may be pursued, the court decided that disturbing the common pleas court’s holding would be inappropriate (appellate review of equity matters is especially limited). There was no material change in the buyers’ understanding of the circumstances that even justified amending to assert rescission. The lesson learned from this court is that the substitution of an inconsistent remedy might be permissible where it is alleged that a plaintiff lacked knowledge of material facts and it cannot be said that the opposing party detrimentally relied. Query as to whether the Schwartzes would have fared better had they pled inconsistently from the outset, imprudently, shooting from the hip if you will. On the question of treble damages, the court wasted little time in affirming the Superior Court. Quite significantly, it posited that “it is best to adhere as closely as possible to the plain language of the statute. � The courts’ discretion to treble damages under the UTPCPL should not be closely constrained by the common law requirements associated with the award of punitive damages.” Although the courts must still consider the presence of intentional or reckless wrongful conduct, there is no doubt that this decision has accentuated the statute’s remedial nature, given it some much needed teeth. One can only hope that puffing with reckless disregard for the truth will become pass�, prohibitively expensive at a minimum. Harper J. Dimmerman represents clients in real estate matters and is the principal of his firm and president of DST Land Transfer, Inc., a title insurance company licensed in Pennsylvania and New Jersey. He may be reached via e-mail: [email protected] or telephone 215-545-0600. He is co-chairman of the Philadelphia Bar Association’s Solo and Small Firm Committee and an Executive Committee member of the Law Practice Management Committee and YLD.

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