Friday, September 04, 2009

mortgages - HEMAP - reasonable prospect - speculative income

Smeal v. PHFA - Cmwlth. Court - August 5, 2009 - unreported memorandum decision

The court upheld PHFA's decision that the applicant for HEMAP assistance from PHFA did not have a reasonable prospect of resuming full mortgage payments within the statutorily specified time -- in that case, 24 months.

The agency found that the applicant was "financially overextended" and that her expenses had exceeded her income for some time. Most pertinent, it found that her claims of future income from a personal business were "purely speculative" and did not establish the required "reasonable prospect" . The court thus approved of the agency's consideration of the applicant's "actual income history without considering...speculative income" that she claimed she would receive.

consumer - gist-of-the-action doctrine - contract v. tort

DeFebo v. Anderson Windows Inc. - ED Pa. - September 3, 2009

Consumer's tort claims against window manufacturer and seller dismissed under the gist-of-the-action doctrine. The court characterized this as follows: "Something like a gathering storm, this is one in an increasing number of cases where the plaintiff attempts to turn straightforward breach of contract and warranty claims into tort claims. Pennsylvania law is not hospitable to such attempts. " The court dismissed plaintiff's tort claims in a complaint which alleged breach of contract, misrepresentation, breach of express warranty, breach of implied warranties, and violation of the Pennsylvania Unfair Trade Practices and Consumer Protection Law

"Under Pennsylvania law, the gist of the action doctrine “precludes a plaintiff from recasting a breach of contract claim into a tort claim.” (citations omitted) For the tort action to survive, “‘the wrong ascribed to [the] defendant must be the gist of the action, the contract being collateral.’”...The doctrine specifically bars claims on extra-contractual statements regarding duties or obligations of parties that are later outlined in the contract....

Notably, fraud-in-the-inducement claims are not always barred by the gist of the action doctrine....(“[F]raud in the inducement of a contract would not necessarily be covered by [the gist of the action] doctrine because fraud to induce a person to enter into a contract is generally collateral to (i.e., not ‘interwoven’ with) the terms of the contract itself.”). However, the type of fraud is not necessarily dispositive, , and courts have applied the doctrine to claims for fraud-in-the-inducement.

Rather, a tort claim is generally barred by the doctrine if (1) it arises solely from a contract between the parties; (2) the duties allegedly breached were created and grounded in contract itself; (3) the liability stems from a contract; or (4) the tort claim essentially duplicates a breach of contract claim or the success of which is wholly dependent on the terms of a contract.”