
    Navarra v. Navarra
    
      C.P. of Lawrence County,
    No. 10282 of 2013 CA
    
      
      Frank G. Verterano, for plaintiff.
    
      Jonathan Solomon, for defendant.
    March 17, 2015
   HODGE, J.,

Before the court for disposition is a motion for judgment on the pleadings filed on behalf of the plaintiff, Chrystie Clarke as Agent under a durable power of attorney for her mother, Sandra Navarra (hereinafter, “plaintiff”)- Defendant, Richard E. Navarra, is the step-sibling of plaintiff. Defendant, Paula R. Navarra, is Richard E. Navarra’s wife, and Navarra Insurance Associates, Incorporated is an insurance agency owned by Richard and Paula jointly.

The instant action commenced on March 20, 2013 when plaintiff filed a civil complaint against defendants, Richard Navarra and Paula Navarra, setting forth claims for contribution and breach of an implied-in-law contract. Plaintiff also set forth claims against Navarra Insurance Associates, Incorporated alleging breach of an implied-in-law contract, unjust enrichment and breach of an implied-in-fact contract.

According to the facts alleged in plaintiff’s complaint, on October 31,2002, PaulaNavarra, as president ofNavarra Insurance Associates, Incorporated (hereinafter, “Navarra Insurance”) obtained a loan from First Commonwealth Bank on behalf of the corporation. The principle amount of the loan equaled $550,000.00. The loan was guaranteed by Richard’s father and step-mother, Fred Navarra and Sandra Navarra, in addition to Richard Navarra and Paula Navarra.

On May 11,2010, First Commonwealth Bank demanded full payment of the outstanding loan balance. At that time, Fred Navarra and Sandra Navarra owned a certificate of deposit worth $200,000.00, which deposit was held at First Commonwealth Bank. When full payment of the loan balance was not received by First Commonwealth Bank, the bank applied the certificate of deposit against the balance and then obtained a judgment in the amount of $86,093.14 against Fred Navarra and Sandra Navarra on May 20, 2010. The $86,093.14 judgment was comprised of the loan’s remaining balance after application of the certificate of deposit, equaling $64,432.05, plus interests and costs, equaling $21,661.07. Thereafter, First Commonwealth Bank agreed to accept $55,000.00 in satisfaction of the judgment entered against Fred Navarra and Sandra Navarra. Fred Navarra paid $55,000.00 to First Commonwealth Bank using funds held by Fred Navarra and Sandra Navarra as tenants by the entireties.

On April 19, 2013, the defendants filed an answer and new matter to plaintiff’s complaint, as well as a complaint against Chrystie Clarke (“Clarke”) as an additional defendant. Chrystie Clarke filed preliminary objections to defendants’ complaint and new matter on May 13, 2013. Following oral argument, this court sustained the preliminary objections, and granted the defendants leave to file a more specific complaint against Chrystie Clarke individually within twenty days. The defendants were also directed to attach the applicable written agreements pertaining to the facts alleged in their amended answer to plaintiff’s original complaint, which also was to be filed within twenty days. On March 10, 2014, the twenty-day time period elapsed without the defendant having filed an amended complaint against Chrystie Clarke individually, or having attached the applicable written agreements to an amended answer. Chrystie Clarke was subsequently dismissed from the instant actions as an additional defendant.

On June 10, 2014, plaintiff presented a motion to strike defendant’s answer and new matter premised on their failure to file an amended pleading within the time requirements prescribed by this court’s February 18,2014 order. The court granted plaintiff’s motion that same date. On June 23, 2014, plaintiff filed the instant motion for judgment on the pleadings. Instead of filing a response as directed, the defendants filed an answer to plaintiff’s motion to strike defendants’ answer and new matter. In their answer [], defendants requested the court re-open the pleadings and provide defendants with an opportunity to amend the complaint against Chrystie Clarke, which was previously dismissed by the court. F olio wing oral argument on this issue, the court denied defendants’ request to reopen the pleadings, and defendants’ new matter filed on July 10, 2014 was stricken from the record. Presently, the only issue pending before the court is plaintiff’s motion for judgment on the pleadings.

In deciding a motion for judgment on the pleadings, the court may consider only the pleadings and any documents properly attached thereto. Pa.R.C.P. 1034; Bata v. Central-Penn National Bank of Philadelphia, 224 A.2d 174, 179 (Pa. 1966). Pleadings include: “(1) a complaint and an answer thereto, (2) a reply if the answer contains new matter, a counterclaim or cross-claim, (3) a counter-reply if the reply to a counterclaim or cross-claim contains new matter, (4) a preliminary objection and a response thereto.” Pa. R.C.P. 1017. The moving party must “admit the truth of all the allegations of his adversary and the untruth of any of his own allegations that have been denied by the opposing party. Pfister v. City of Philadelphia, 963 A.2d 593, 597 (Pa.Commw.Ct. 2009) (internal citation omitted). “All material facts set forth in the pleading and all inferences reasonably deducible therefrom must be admitted as true.” Hill v. Ofalt, 2014 Pa. Super. 17, 85 A.3d 540, 547 (2014) (citing Lugo v. Farmers Pride, Inc., 967 A.2d 963, 966 (Pa. Super. 2009)). Only where there are unknown or disputed issues of fact after review of the pleadings should the court not grant a motion. See Del Quadro v. City of Philadelphia, 293 Pa.Super. 173, 176, 437 A.2d 1262, 1263 (1981).

Plaintiff correctly argues that the only pleading pending before this court is plaintiff’s complaint. Although defendants did file an answer and new matter on April 19, 2013, the same was stricken from the record following defendants’ failure to amend their pleadings as directed by this court on February 18, 2014. Thus, this court is bound to accept as true all material facts contained in plaintiff’s complaint, as well as all inferences reasonably deducible therefrom. In her brief to the court, plaintiff succinctly outlines the facts pled as follows:

1. The plaintiff is Sandra Navarra, an adult individual currently residing at 2250 Shenango Freeway, Hermitage, PA, 16148 (“Sandra”).

2. Sandra was married to Fred Navarra (“Fred”), an adult individual who, prior to his death, resided at 877 Phillips School Road, New Wilmington, PA, 16142, (“the Marital Residence”).

3. Fred died on July 24,2012.

4. Chrystie Clarke is the natural daughter of Sandra and her agent under a durable power of attorney, a true and correct copy of which is attached and identified as Exhibit “A”.

5. The defendants, Richard E. Navarra (“Richard”) and Paula R. Navarra (“Paula”), husband and wife, are adult individuals residing at 711 Trillium court, Wexford, PA, 15090.

6. The defendant Navarra Insurance Associates, Inc. is a corporation organized and existing under the laws of the Commonwealth of Pennsylvania, with its principal place of business formerly located at 16055 Perry Highway, Wexford, PA, 15090, and now located at 711 Trillium court, Wexford, PA, 15090 (“Navarra Insurance”).

8. On or about October 31,2002, Paula, in her capacity as President of Navarra Insurance, made, executed and delivered to First Commonwealth Bank (“the Bank”) in Lawrence County, Pennsylvania, a certain note in the principal amount of $550,000 (“Note”). Atrae and correct copy of the note is attached and marked as Exhibit “B”.

9. On or about October 31, 2002, Fred, Sandra, Richard and Paula executed and delivered to the Bank, an Unconditional Guaranty (“Guaranty”), pursuant to which Fred, Sandra, Richard and Paula unconditionally agreed to guarantee payment of the note to the bank. A true and correct copy of the guaranty is attached and marked as Exhibit “C”.

10. Navarra Insurance defaulted under the terms of the Note, having failed to make payments when due.

11. On May 11, 2010, the bank demanded under the Guaranty of Fred, Sandra, Richard and Paula payment of all amounts due.

12. Fred, Sandra, Richard and Navarra failed to make payment as required by the Guaranty and on May 20, 2010, the Bank confessed judgment against Fred and Sandra in the amount of $86,093.14 at No. 10754 of 2010, C. A. in the court of Common Pleas of Lawrence County, Pennsylvania.

13. Fred and Sandra maintained a tenancy by the entirety certificate at the Bank in Lawrence County, Pennsylvania, No. 01113000001912 (“the bank account”), in which there was deposited $200,000.

14. On or about May 10, 2010, the Bank in Lawrence County, Pennsylvania, set off $200,000 from the bank account and applied it to the note.

15. The principal balance due on the note after application of the $200,000 set off against the bank account was $64,432.05 together with interest and costs of $21,661.07 (“Note Balance”).

16. The Bank in Lawrence County agreed to accept $55,000 in full payment of the balance on the Note.

17. Prior to his death, Fred obtained $100,000 from tenancy by the entireties certificates of deposit in Huntington Bank, Lawrence County, Pennsylvania. Copies of the two certificates of deposit are attached hereto marked as Exhibits “D” and “E”.

18. Those funds were used to purchase two (2) annuities (“Annuities”), copies of which are not in the possession of the plaintiff.

19. When Fred died, the annuities, pursuant to order of court, were paid in trust to David Acker, Esquire, an attorney whose office is located in New Castle, Lawrence County, Pennsylvania.

20. $55,000 of the annuities were applied to the Bank’s accepted offer of settlement to extinguish the line of credit and paid to the Bank in Lawrence County, Pennsylvania.

24. Fred and Sandra paid a total sum of $255,000 ($200,000 set off against the bank account and $55,000 from the Annuity) on the Note as guarantors and as payment in full to the Bank.

25. Richard and Paula paid nothing.

32. Navarra Insurance was the beneficiary of the proceeds of the Loan.

33. Navarra Insurance was the beneficiary of the payment of the Note Balance.

34. Navarra Insurance and the plaintiff agreed that the guaranty obligation would be incurred but that Navarra Insurance would pay the loan.

35. The plaintiff and Navarra Insurance intended that plaintiff would not pay any part of the loan.

36. The plaintiff signed the Guaranty as a condition of the loan, not with the intent that it would be paid with tenancy by the entirety funds and without repayment from Navarra Insurance.

39. The plaintiff did not agree that tenancy by the entirety funds would be used to pay the entire amount required to pay off the loan.

42. Navarra Insurance benefitted from the payment of the funds from the tenancy by the entirety bank account and the annuity.

43. Navarra Insurance made no effort to and has not repaid any part of the funds paid for its benefit as set forth above.

Plaintiff’s Claim for Contribution (Count I)

Plaintiff’s claim for contribution is based on the allegation that Richard Navarra and Paula Navarra failed to pay one-half of the balance owed on the loan from First Commonwealth Bank. Plaintiff claims that, as co-guarantors of the loan, Richard Navarra and Paula Navarra were responsible for their proportionate share. Instead, Sandra and Fred Navarra paid the entire sum required to liquidate the loan upon Navarra Insurance’s default. Contribution permits such recovery when “[a] guarantor who has paid the full amount of a debt which also was guaranteed by another may obtain from the co-guarantor an amount sufficient to make the payment of both on the debt equal. In re Brueckner, 147 B.R. 685, 687 (Bankr.W.D. 1992) (citing Hoff v. Kauffman, 282 Pa. 471, 475-476, 128 A. 120, 121 (1925)).

As previously stated, the loan in question was guaranteed by Fred and Sandra Navarra, as husband and wife, and Richard and Paula Navarra, as husband and wife, in the event of a default by Navarra Insurance. Thus, each couple’s proportionate share of the loan was fifty percent.

Plaintiff’s Claims for Contract Implied-In-Law and Unjust Enrichment (Counts 2, 4 and 5)

A plaintiff may establish the existence of a contract implied-in-law or “quasi contract” by showing that (i) benefits were conferred on the defendant by plaintiff, (ii) there was an appreciation of such benefits by the defendant, and (iii) there was an acceptance and retention of such benefits which, under the circumstances, would be inequitable for the defendant to retain the benefit without payment of value. Wiernik v. PHH U.S. Mortg. Corp., 736 A.2d 616, 622 (Pa. Super. 1999). “A quasi-contract imposes a duty, not as a result of any agreement, whether express or implied, but in spite of the absence of an agreement, when one party is unjustly enriched at the expense of another. An action based on a party being unjustly enriched is one sounding in quasi-contract (or a contract implied-in-law). Sevast v. Kakouras, 591 Pa. 44, 915 A.2d 1147, 1153, n. 7 (2007).

Unless specifically precluded by the written guaranty, the promise to answer for the debt of another is one of suretyship. 8 P.S.§1. The fundamental difference between a guarantor and a surety is the timing of when performance is required by the obligee. A surety is liable immediately upon default of the principal obligor, but a guarantor’s duty does not arise until reasonable efforts have been made by the creditor to collect the guaranteed debt from the principal. Keystone Bank v. Flooring Specialists, Inc., 518 A.2d 1179, 1184 (Pa. 1986). Furthermore, the legal implication which results from the existence of a suretyship is the implied promise of the surety to pay to the other that portion of the surety’s proportionate share paid by his co-guarantor or principal. Id. The implied promise rises to the level of a contract implied-in-law and is enforceable as such. Id.

The applicability of the doctrine of unjust enrichment is contingent upon the unique facts of the case. Discover Bank v. Stucka, 33 A.3d 82, 88 (Pa.Super. 2011) (quoting Stoeckinger v. Presidential Fin. Corp. of Delaware Valley, 948 A.2d 828, 833 (Pa. Super. 2008)). The question is not focused on the intention of the parties, but instead is whether or not the defendant has been unjustly enriched. Schenck v. K.E. David, Ltd., 666 A.2d 327, 328 (Pa.Super. 1995). The recipient is unjustly enriched whenever the benefits received “have been obtained under circumstances where reason, common sense and justice dictate that payment should be made. Colish v. Goldstein, 73 A.2d 749, 750 (Pa. 1961) (internal citations omitted). Thus, a principal debtor is deemed unjustly enriched if he avoids the obligation to reimburse a guarantor-surety of his underlying debt. Upon the finding of unjust enrichment, the law implies a contract requiring the defendant to pay the equivalent value of the benefit conferred. Schenck, 666 A.2d at 327.

In the instant case, count two and count five of plaintiff’s complaint pertain to Navarra Insurance. Plaintiff asserts that the funds used by Fred Navarra and Sandra Navarra satisfied Navarra Insurance’s obligations under the loan with First Commonwealth Bank. Plaintiff further contends that Navarra Insurance was the sole beneficiary of this transaction. This arrangement permitted Navarra Insurance to benefit from the payments rendered by Fred Navarra and Sandra Navarra, without fulfilling the expectation that Navarra Insurance would ultimately repay the debt to Fred Navarra and Sandra Navarra. Thus, Navarra Insurance breached an implied contract and became unjustly enriched.

Count Four of plaintiff’s complaint applies to Richard Navarra and Paula Navarra. Richard and Paula Navarra are sureties to the original loan, and are therefore obligated to repay their proportionate share of the principle, which was originally paid by Fred Navarra and Sandra Navarra. Because the law permits recovery under the theory of an implied contract, plaintiff is entitled to relief.

Plaintiff’s Claim for Contract Implied-In-Fact (Count 3)

Lastly, plaintiff makes a claim for contract implied-in-fact against Navarra Insurance. The necessary elements of a contract implied-in-fact are the same as an express agreement. Matter of Penn Cent. Transp. Co., 831 F.2d 1221, 1228 (3d Cir. 1987) (citing 1 S. Williston on Contracts § 3 (3d ed. 1957)). A contract implied-in-fact exists where the parties agree upon duties or obligations incumbent upon each, irrespective of a written agreement, as their intentions are expressed by their acts in light of the surrounding circumstances. Rissi v. Cappella, 918 A.2d 131, 140 (Pa. Super. 2007); Tyco Electronics Corp. v. Davis, 895 A.2d 638, 640 (Pa. Super. 2006). The test for determining whether a contract implied-in-fact is enforceable is that both parties must “have manifested an intention to be bound by its terms and . . . the terms are sufficiently definite to be specifically enforced.” ATACS Corp. v. Trans World Communications, Inc., 155 F.3d 659, 665 (3d Cir. 1998) (internal citations and quotations omitted).

Navarra Insurance was the beneficiary of the funds borrowed from the First Commonwealth Bank, as well as the funds expended by Fred Navarra and Sandra Navarra to satisfy the loan. Fred Navarra and Sandra Navarra executed a guarantee for the loan, but maintained the expectation that Navarra Insurance would pay First Commonwealth Bank under the terms of the loan. Thus, plaintiff sufficiently alleges a contract implied-in-fact.

Based upon the foregoing analysis, the court will enter the attached order of court granting plaintiff’s motion for judgment on the pleadings.

And now, this 17th day of March, 2015, with this matter being before the court for argument on plaintiff’s motion for judgment on the pleadings, with Frank G. Verterano, Esq., appearing on behalf of the plaintiff, and with Jonathan Solomon, Esq., appearing on behalf of the defendants, and with the court considering the arguments contained in plaintiff’s brief, as well as completing a thorough review of the record in the above captioned case, the court hereby orders and decrees as follows:

1. Plaintiff’s motion for judgment on the pleading is granted.

2. Judgment is hereby entered in plaintiff’s favor against the defendants, Richard Navarra and Paula Navarra and Navarra Insurance Associates, Incorporated, in the amount of $255,000.00.

3. Defendants shall be joint and severely liable for payment of the judgment entered pursuant to paragraph two of this order of court.

4. Plaintiff shall be entitled to interest at the legal rate accruing from March 20,2013.

5. The Prothonotary shall properly serve notice of this order of court upon counsel of record for the parties. 
      
      . The facts alleged are numbered by the court in the same manner as in plaintiff’s Complaint.
     