Monday, October 29, 2007

damages/remedies - election of remedies; rescission - need for prompt action

Schwartz v. Rockey - Pennsylvania Supreme Court - October 17, 2007

majority http://www.aopc.org/OpPosting/Supreme/out/J-4A&B-2007mo.pdf
concurring/dissenting http://www.aopc.org/OpPosting/Supreme/out/J-4A&B-2007codo.pdf

election of remedies
Held, filing a complaint seeking contract-related damages (e.g., money damages) does not, by itself, foreclose a subsequent amendment seeking an inconsistent, equitable remedy (e.g., rescission), at least where it is alleged that the plaintiff lacked knowledge of material facts at the time of filing, and in the absence of demonstrated detrimental reliance by the opposing party. The court noted "confusing congeries of doctrines [which] have been lumped together under the election of remedies label." A majority of jurisdictions, including the federal courts, apply modern rules of pleading to permit the simultaneous pleading of inconsistent claims for relief.

rescission - need for prompt action
Held, the Superior Court should not have disturbed the trial court holding that buyers of real property "failed to pursue rescission with sufficient promptitude* to support an award of such remedy." Buyers effectively affirmed the contract by living in the house for 6 years and by not promptly seeking to rescind once they became aware of previously undisclosed water damage. Prompt action is a prerequisite to the remedy of rescission. Fichera v. Gording, 227 A.2d 642, 643-4 (Pa. 1967).

* Yes, it's in the dictionary.

consumer protection - treble damages - standard for award

Schwartz v. Rockey - Pennsylvania Supreme Court - October 17, 2007

majority http://www.aopc.org/OpPosting/Supreme/out/J-4A&B-2007mo.pdf
concurring/dissenting http://www.aopc.org/OpPosting/Supreme/out/J-4A&B-2007codo.pdf

Stating that it was "best to adhere as closely as possible to the plain language of the statute, which on "on its plan terms, does not provide any standard pursuant to which a trial court may award treble damages," the state supreme court held that the discretion of a trial court to award treble damages under sec. 9.2 of the state Consumer Protection Law, 73 P.S. sec. 201-9.2, "should not be closely constrained by the common-law requirement associated with the award of punitive damages" i.e., "outrageous and egregious conduct," which might include an "evil motive" or "reckless indifference to the rights of others."

The Court said that question was a "very close one." It contrasted this decision with that in Johnson v. Hyundai Motor America, 698 A.2d 631 (Pa. Super. 1997), where the court mentioned a "heightened standard for assessing the availability of treble damages" and said that courts should be guided by punitive damages cases.

The statute mentions only the trial court's "discretion," which the court said "is not limitless, as we believe that awards of treble damages may be reviewed by appellate courts for rationality, akin to appellate review of the discretionary aspect of equitable awards...." Trial courts "should focus on the presence or absence of intentional or reckless, wrongful conduct, as to which an award of treble damages would be consistent with, and in furtherance of, the remedial purposes of the" Consumer Protection Law."

The chief justice dissented on this issue, stating that "the case law regarding the nature of punitive damages is well reasoned and evidences the common-law principle applied on Pennsylvania. The plain language of the statute does not expressly alter this principle. Thus, absent such express direction from the Legislature to the contrary, I believe that the UTPCPL was intended to preserve the requirement that an award of treble damages be predicated upon a punitive damage analysis."

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