Weir Greenblatt Pierce (WGP) partners, Walter Weir, Jr., Susan Verbonitz and Alan L. Yatvin, recently secured a complete victory for their clients, Concert Golf Partners and its principal, Peter Nanula, in a fraud action brought against them by developer North Penn Towns (NPT), when United States District Court Judge Karen Spencer Marston granted summary judgment in favor of WGP’s clients on all claims.
The action arose from Concert’s purchase of the Philmont Country Club in 2017. NPT had been a suitor for purchase of a 61-acre portion of the Club’s property for development of residential homes. The deal fell apart in September of 2016, and Concert, which purchases distressed golf clubs, infuses capital and manages them back to financial viability, ultimately purchased the entire Club. Concert agreed to pay off the Club’s debts of nearly a million dollars, make a set of specific capital improvements, estimated to cost approximately $4 million dollars, and agreed to make a further capital improvements of about $5 million upon sale of the development parcel.
NPT sued Philmont Country Club, the non-profit that had owned the Club of the same name, Concert, Nanula and others in the Montgomery County Court of Common Pleas over the sale. NPT then settled with Philmont, part of which included assignment of Philmont’s non-contractual claims to NPT. NPT then filed suit in district court against various Concert entities and Ridgewood, a developer working with Concert, alleging violations of federal antitrust law, fraud, breach of contract and conspiracy, On August 12, 2021, Judge Marston dismissed the federal antitrust and conspiracy claims, some of the fraud claims, and claims of aiding and abetting fraud.
NPT then filed an amended complaint asserting fraud, fraudulent nondisclosure, and fraudulent concealment under Restatement (Second) of Torts §§ 550 and 551, and aiding and abetting fraud. The suit asserted that Concert and Nanula never intended to make the agreed capital improvements and that Concert’s collaboration with developer Ridgewood somehow compromised the sale price of the Club. There was also a breach of contract claim against Ridgewood arising from an alleged breach of a confidentiality agreement.
In her July 28, 2022, Opinion granting summary judgment as to all defendants on all counts, except the breach of contract claim against Ridgewood, Judge Marston agreed with WGP that the fraud claim asserting misrepresentations as to the capital improvements was barred by the gist of the action doctrine, because the allegations of fraud involved duties that were outline in the sales agreement. Because the action sounded in contract, not tort, the fraud claims were barred.
NPT’s fraudulent concealment and non-disclosure claims under the Restatement (Second) of Torts related to alleged failure to disclose and actively concealing that Concert and Ridgewood were working together. Judge Marston dismissed these claims after concluding that Concert and Nanula had no duty to disclose their relationship which was neither material nor basic to the transaction and that Ridgewood was not a party to a business transaction with Philmont. Finally, because the fraud claims were dismissed as to all defendants, the aiding and abetting fraud claims were also dismissed.
Commenting on the decision, Walter Weir, Jr., said: “This was an astounding victory for the defendants and represents the best of our judicial system to ferret out and make simple what was an unnecessarily complicated case.”
Read the Full Opinion here: Summary Judgment Memorandum Opinion
Read more about the case in the Legal Intelligencer here: Fraud Claim Over Sale of Philmont Country Club Dismissed