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Weir Greenblatt Pierce Team Secures Dismissal of Fraud Action Over Sale of Philmont Country Club

By: devweb

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

Weir Greenblatt Pierce LLP Secures Summary Judgment For Client In COVID-19 Breach of Contract Case

By: devweb

            Weir Greenblatt Pierce LLP partners Walter Weir, Jr. and Steven E. Angstreich secured a significant victory for their client in an action against a commercial tenant for breach of lease due to the tenant’s failure to pay rent during the COVID-19 pandemic.  In granting summary judgment in favor of their client, the Superior Court of New Jersey rejected the tenant’s argument that the COVID-19 pandemic relieved the tenant of its obligation to pay rent under the doctrines of frustration of purpose and impracticability.

          The action arose from the tenant’s breach of a 10-year commercial lease when it refused to pay rent claiming that the pandemic frustrated its purpose for entering the lease, and that it was unable to perform under the lease terms. The issues in the case involved questions of whether a party may cite the effects of the COVID-19 pandemic to void its obligations under a contract, and whether the contract itself included provisions that would allow a party to do so.

            The tenant, who was a provider of medical services, alleged, among other things, that because the pandemic caused an increase in demand for remote services and a decrease in demand for in-person services, the agreement became less profitable and its primary purpose for entering the agreement had been frustrated. The tenant further alleged that performance became impracticable for the same reason and argued that it should no longer have to pay rent.

            In granting summary judgment, the New Jersey Superior Court found that the lease clearly states that the premises would be used for “medical services” as provided by the tenant and included no language regarding contingencies. The Court also noted that the lease clearly indicated that any failure to pay rent would amount to a material breach of the agreement. The Court ultimately held that although the COVID-19 pandemic was an unforeseeable circumstance, “[n]o rational fact finder could find that the performance here was literally impossible or made inordinately more difficult by COVID-19, as the only performance required by Defendant tenant was to pay their rent.” The change in demand for in-person medical services, according to the Court, did not frustrate any purpose contemplated in the language of the agreement between the Parties, and did not render the tenant unable to perform its obligation to pay rent under the lease. Accordingly, the Court granted summary judgment in favor of the landlord.

            The full Opinion may be read here.