IN THE COURT OF COMMONPLEAS OF ALLEGHENY COUNTY, PENNSYLVANIA
`
`WALNUTCAPITAL ACQUISITIONS
`INC.,
`
`Plaintiff,
`
`v.
`
`DANIEL PALMIERIetal.
`
`Defendants.
`
`Counsel for Plaintiff:
`Jonathan M. Kamin, Esq.
`David A. Wolf, Esq.
`Deborah R. Erbstein, Esq.
`Goldberg, Kamin & Garvin, LLP
`1806 Frick Building
`437 Grant Street
`Pittsburgh, PA 15219
`
`jonathank@ekgattorneys.com
`davidw@gkgattorneys.com
`
`derbstein@gkgattorneys.com
`
`Counsel for Alfio A. Pasquarelli
`and Anna Marie Pasquarelli:
`Samuel J. Pasquarelli, Esq.
`Sherrard, German & Kelly, P.C.
`535 Smithfield Street, Suite 300
`Pittsburgh, PA 15222
`sjp@sgkpc.com
`
`Preliminary Objections and Briefin
`Support served on 7/31/23 via email.
`
`CIVIL DIVISION
`
`G.D. 23-002442
`
`DEFENDANTS’ PRELIMINARY
`OBJECTIONSTO PLAINTIFF’S
`ACTION FOR DECLARATORY
`RELIEF AND BRIEF IN
`SUPPORT
`
`Filed on behalf of: Daniel Palmieri,
`individually, David Palmieri,
`individually, Carmine Philip
`Casciato, individually, Nicola K.
`Casciato, individually, Daniel
`Casciato and Janet Casciato, husband
`and wife, Genesio Palmieri and
`Diane Palmieri, husband and wife,
`Camillo Palmieri, individually, and
`Camillo Palmieri and Aileen
`Palmieri, husband and wife.
`
`Counsel of Record for This Party:
`
`Maurice A. Nernberg
`Pa. I.D. No. 00127
`
`man(@nernberg.com
`Joshua A. Lyons
`Pa. I.D. No. 94301
`jal@nernberg.com
`
`Maurice A. Nernberg & Associates
`301 Smithfield Street
`Pittsburgh, PA 15222
`(412) 232-033
`
`

`

`18601POLYal062123Wey0622231062323\0710239071323nan7042310710231072023072223
`
`IN THE COURT OF COMMONPLEAS OF ALLEGHENY COUNTY, PENNSYLVANIA
`
`WALNUTCAPITAL ACQUISITIONS
`INC.,
`
`Plaintiff,
`
`Vv.
`
`DANIEL PALMIERIetal.
`
`Defendants.
`
`CIVIL DIVISION
`
`G.D. 23-002442
`
`DEFENDANTS’ PRELIMINARY OBJECTIONS TO PLAINTIFF’S ACTION FOR
`DECLARATORY RELIEF AND BRIEF IN SUPPORT
`
`1.
`
`These Preliminary Objections are filed on behalf of Defendants, Daniel Palmieri,
`
`individually, David Palmieri, individually, Carmine Philip Casciato, individually, Nicola K.
`
`Casciato, individually, Daniel Casciato and Janet Casciato, husband and wife, Genesio Palmieri
`
`and Diane Palmieri, husband and wife, Camillo Palmieri, individually, and Camillo Palmieri and
`
`Aileen Palmieri, husband and wife, referred to herein as “collectively “Palmieri and Casciato”.
`
`2.
`
`On February 23, 2023, Plaintiff, Walnut Capital Acquisitions, Inc. (“Walnut”),
`
`filed an Action for Declaratory Relief that purports to declare the parties’ rights and obligations
`
`under a written contract (CountI) and seeksto hold the Defendants liable for breach of contract.
`
`3.
`
`The contract at issue, titled an Agreement of Sale and Purchase (“Agreement”)
`
`wasentered into on July 18, 2021 and, by its express terms, which required that a closing occur
`
`on or before December 15, 2021, expired and/or was terminated.
`
`4.
`
`Walnut admitsthat it failed to close by December 15, 2021. See Complaint,
`
`Paragraph 25.
`
`

`

`5.
`
`Importantly, the Agreement also facially includes parties and property sellers that
`
`Walnut has notidentified or served as Defendants in this matter, including Robert G. Laird and
`
`Jean M.Laird, his wife, Giuseppe Palmieri and Lidia P. Palmieri, his wife, Leo D. Pasquarelli
`
`and Sandra L. Pasquarelli, his wife, and Diane Melchitzky (collectively the “Non-Defendant
`
`Sellers”). See Plaintiffs Exhibit A, Agreement ofSale, p. 1.
`
`6.
`
`In fact, both Walnut’s “Notice of Intent to Close” (Exhibit B) and “Notice of
`
`Default” (Exhibit C) were sent to the Non-DefendantSellers, yet they were notlisted as
`
`Defendants in this matter.
`
`7.
`
`By excluding the Non-DefendantSellers as parties, Walnut is apparently
`
`attempting to retain the benefit of the Agreementasit relates to some parties but disclaim the
`
`Agreementas it relates to other parties.
`
`Pa.R.C.P. 1028(a)(1), (a)(5) and 1032(b) — Failure to Join a Necessary and
`Indispensable Party (Counts I and IJ)
`
`8.
`
`Pa.R.C.P. 1032(b) states that if there has been a failure to join an indispensable
`
`party, then the Court shall dismiss the action.
`
`9.
`
`Asit relates to declaratory judgmentactions suchasthis one, “the failure to join
`
`an indispensable party deprives a court of subject matter jurisdiction.” ESP Enters., LLC v.
`
`Garagozzo, 2005 Phila. Ct. Com.Pl. LEXIS 289, *3-5 (Pa. Com.Pl. 2005) citing Vale Chemical
`
`Co v. Hartford Accident and Indemnity Co., 516 A.2d 684, 685 (Pa. 1986).
`
`10.
`
`In fact, the Declaratory Judgmentstatute itself (42 Pa.C.S. § 7540(a)) states that
`
`all interested parties must be joined, as follows:
`
`“Generalrule. -- When declaratory relief is sought, all persons shall be made
`parties who haveorclaim any interest which would be affected by the declaration,
`and no declaration shall prejudice the rights of persons not parties to the
`proceeding.”
`
`

`

`11.
`
`Similarly, Pa.R.C.P. 2227(a) requires that parties that have “only a joint” interest
`
`in the subject matter of the litigation must be joined.
`
`12.
`
`Here, as evidenced by Walnut’s admissionthat it sent both a Notice of Intent to
`
`Close and a Notice of Default to the Non-DefendantSellers, it is clear that Walnut itself
`
`recognizesthatall of the parties to the Agreement, including the Non-DefendantSellers, are
`
`necessary and mustbe included.
`
`13.
`
`Anyverdict against fewer than all of the parties to the agreement would impact
`
`those whoarenotjoined, either by res judicata or collateral estoppel. Not only that but, by its
`
`very terms, the Agreementis “conditioned uponall of the parcels of Real Estate [including the
`
`Non-DefendantSellers’] being simultaneously conveyed”, with Paragraph 2(E) stating as
`
`follows:
`
`“All Real Estate Parcels Are Included: The Parties acknowledge thatis their
`express understandingthat each parcel of Real Estate is to be conveyed to and
`acquired by Buyer simultaneously, and Buyer’s obligations to close on the
`purchase ofany parcel of Real Estate is expressly conditioned uponall of the
`parcels of Real Estate being simultaneously conveyed to Buyer by eachSeller.”
`
`14.
`
`In fact, Walnut’s “Notice of Intent to Close” (Exhibit B), which wassentto the
`
`Non-DefendantSellers, readily acknowledges that “[p]ursuant to Paragraph 2(E)of the
`
`AgreementofSale,it is required thatall of the Properties be simultaneously conveyedto the
`
`Buyer.”
`
`15.
`
`And, Walnut’s “Notice of Default” (Exhibit C), also sent to the Non-Defendant
`
`Sellers, cites 2(E) and contendsthat “[c]losing did not occur because a few of the Sellers have
`
`refused to convey their respective properties.”
`
`16.
`
`Thus, if this Court accepts Palmieri and Casciato’s argumentthat the Agreement
`
`is void and unenforceable, and denies Walnut’s requested relief, the Non-DefendantSellers will
`
`

`

`not be able to separately enforce the Agreement against Walnut given Clause 2(E), even though
`
`the Non-Defendant Sellers may disagree with Palmieri and Casciato’s position as to the
`
`enforceability of the Agreement. Said another way,if Palmieri and Casciato win here, the Non-
`
`Defendant Sellers can never enforce the Agreement against Walnut.
`
`17.
`
`Finally, although prejudice to named Defendantsit not a necessary element for
`
`this Court to find that the Non-DefendantSellers are indispensable parties, not havingall
`
`defendants in this case could affect the named Defendants’ rights because Walnutis claiming
`
`entitlement to reimbursement ofpre-closing expenses and legal fees in this case as well. If
`
`Walnutis successful, these defendants, owning 12 separate properties, could be liable for all of
`
`the losses incurred due to an allegation involving 19 separate properties. Alternatively, these
`
`defendants would havea right of contribution against the Non-Defendant Sellers, who were not
`
`participants in the action.
`
`18.
`
`A similar factual scenario wasset forth in the ESP Enters., LLC v. Garagozzo,
`
`2005 Phila. Ct. Com. Pl. LEXIS 289, *5 (Pa. Com. Pl. 2005) case where the Plaintiff asked for a
`
`declaration regarding an agreementofsale and did not include as defendantsall of the parties to
`
`the agreement and the Court stated:
`
`Here, in its Complaint, plaintiffs are asking the Court to declare that the
`Agreementof Sale contract is void. However, notall of the parties to the
`Agreementof Sale are parties to this litigation, namely Fante and Disco. Fante
`and Disco, along with Garagozzo, are the ownersandthesellers of the property in
`the Agreementof Sale. Since the Court's determination of the enforceability of the
`Agreementof Sale will affect Fante's and Disco's rights andinterests, they are
`necessary parties to the current litigation.
`
`19.
`
`The sameis true here. No matter what this Court decides, as set forth above,it
`
`will necessarily affect the Non-DefendantSellers.
`
`

`

`20.
`
`Byfailing to name the Non-DefendantSellers as Defendants in this matter, after
`
`admittedly sending a Notice of Intent to Close and a Notice of Default to the Non-Defendant
`
`Sellers, Walnut has robbed them oftheir ability to argue that the Agreementis unenforceable, or
`
`enforceable, as the case may be, and Walnut could seek to use any decision in this matter to the
`
`detriment of the Non-DefendantSellers, without affording the Non-Defendant Sellers due
`
`process.
`
`21.
`
`The Non-DefendantSellers rights and interest in the Agreementare so integral to
`
`this matter that it cannot proceed without them.
`
`22.
`
` Assuch, Walnut’s action should be dismissed in its entirety for lack of subject
`
`matter jurisdiction and failure to join an indispensableparty.
`
`WHEREFORE,Palmieri and Casciato respectfully request that this Court dismiss Counts
`
`I andII of the Plaintiff's Complaint for lack of subject matter jurisdiction andfailure to join an
`
`indispensable party.
`
`Pa.R.C.P. 1028(a)(2) — Failure of Pleading to Conform to Law (CountI)
`
`Count I of Walnut’s Complaint requests declaratory relief.
`
`The Declaratory Judgment Act requires that “all persons shall be made parties
`
`23.
`
`24.
`
`whohaveor claim any interest which wouldbe affected by the declaration.” 42 Pa.C.S. §
`
`7540(a).
`
`25.
`
`By failing to name the Non-Defendant Sellers as Defendants, Walnut hasfacially
`
`violated the Act.
`
`26.
`
`As such, Count I of Walnut’s action must be dismissed.
`
`WHEREFORE,Palmieri and Casciato respectfully request that this Court dismiss CountI
`
`of the Plaintiff's Complaint for failure to conform to law.
`
`

`

`Pa.R.C.P. 1028(a)(4) — Legal Insufficiency of a Pleading (Counts I and IT)
`
`27.|The Agreementstates that that closing shall occur “‘no later than December15,
`
`2021.” Exhibit A, page 2, Section 5.
`
`28.
`
`In Paragraphs 22 and 25 of its Complaint, Walnut readily admits thatit failed to
`
`close on or before December 15, 2021, that the sellers declared Walnut in default as a result of
`
`that breach of the Agreement, and Walnutdoes not plead any legal or equitable basis for how it
`
`could unilaterally alter the closing date.
`
`29.
`
`Article 4 of the Agreement gave Walnut 120 days from the date of the
`
`Agreement, July 18, 2021, to perform its due diligence investigation. In addition, during that
`
`period Walnut waspermitted to seek development and zoning approvals for the property. At any
`
`time before the 120 days expired, November 15, 2021, Walnut could withdraw from the
`
`transaction and get a refundof its hand money, $100,000.It did not so elect and did not plead
`
`any termination at that time.
`
`30.
`
`Once the 120 days passed, Walnut wasobliged to close on or before December
`
`15, 2021. It did not. Rather, in its Complaint, Walnut alleges (Paragraphs 23 and 24) thatit
`
`continued to seek rezoning and did not obtain the rezoning until June 28, 2022, approximately
`
`195 days later and 225 days after the due diligence period expired.
`
`31.
`
`Closing was required on or before December 15, 2021 and Walnut’s only
`
`allegation for not closing is that it continued to pursue development approval beyondthe 120-day
`
`period under the Agreement.
`
`32.
`
`Essentially, Walnut’s position hereis that it was entitled to a due diligence period
`
`of 345 days despite a clear contract provision granting only 120 days.
`
`

`

`33.
`
`As Walnut cannotpleada legalbasisforrelief, because the Agreement expired by
`
`its terms, it must plead an equitable basis for relief and it did not. While Walnutis likely to argue
`
`that time wasnot ofthe essence for closing, Walnutis actually construing the extension it seeks
`
`for closing as an extension for its own duediligence period. That, being in the form of an option,
`
`expired by its terms. As such, Walnuthad nofurtherright to pursue development and CountII
`
`should be dismissed.
`
`34.
`
`In fact, Walnut admits it was 8 and % months (or 245 days) between the time
`
`period whenit was required to close, i.e., December 15, 2021, and the date that Walnut
`
`unilaterally scheduled a closing after the sellers had already declared Walnutin default,i.e.,
`
`August 17, 2022.
`
`35.
`
`Failure to close by the date identified in the Agreement, or in a reasonable time
`
`thereafter, precludes enforcement of the Agreement by Walnut. Reagan v. D. & D. Builders, Inc.,
`
`419 A.2d 700 (Pa. Super. 1980).
`
`36.
`
`By its own admission, Walnut materially breached the Agreement and a breaching
`
`party loses the legal ability to enforce that contract. Nikole, Inc, v. Klinger, 603 A.2d 587 (Pa.
`
`Super. 1992).
`
`37.
`
`Thus, while Walnut may attempt to sue in equity and seek specific performance,
`
`although it did not plead an equitable basis for the sameas aforesaid, its breach of contract claim
`
`is barred as a matter of law, Walnut is barred from seeking damages under the Agreement, and
`
`Count I should be dismissed.
`
`38.
`
`In addition to the admitted failure to close, it is an express condition of the
`
`Agreementthat all properties covered by the Agreement must be conveyed at the sametime. See
`
`Agreement of Sale, Paragraph 2(E).
`
`

`

`39.
`
`Thus, in order for Walnutto be successful oneitherof its claims, it must plead
`
`and provethat the Non-DefendantSellers are ready, willing, and able to convey their properties
`
`to Walnut. Walnut did not.
`
`40.
`
`Although Walnutpled that it unilaterally set a new closing date of August 17,
`
`2022, Walnutdid not allege that the Non-DefendantsSellers attended this “closing” and were
`
`ready, willing and able to close by conveyingtitle at that time. Instead, Walnut pled: “None of
`
`the Defendants attended the closing on August 17, 2022.” See Complaint, Paragraphs 27-30.
`
`41.
`
`Furthermore,alleging that “no one” attended the closing includes Walnut, so there
`
`could not be a breach by Sellers. See Jamp Dev. v. New Beginnings Church Angely Asset Mgmt.
`
`Co., 2022 Pa. Super. Unpub. LEXIS 2662 (Pa. Super. 2022) citing McKuen v. Serody, 112 A.
`
`460, 461 (Pa. 1921)(“regardingallegationsthat a seller cannot conveytitle, ‘the way to ascertain
`
`whether [a party] could [conveytitle] was to make a tender on orbefore the day named,and,this
`
`not having been done, the court could not decree specific performance.””)
`
`42.
`
`It is important to note for the Court that this objection is not made to take
`
`advantage of a technical quirk in pleadings, but the Defendants wouldplead andprove that
`
`Walnutdid not attend the closing and wasnot prepared to make the requisite payment and take
`
`the deeds. Thus, the purposeofthis allegation is to require Walnutto plead thatit did attend the
`
`scheduled closing and wasready,willing, and able to deliver the requisite consideration on that
`
`date and at that time. That is a necessary element of Walnut’s claim and, according to the
`
`Pennsylvania Supreme Court, Walnut cannot obtain specific performancein its absence.
`
`43.
`
`As such, Walnut’s ownpleadingestablishesthat its claims are barred bytheplain
`
`language of the Agreement and applicablecase law.
`
`

`

`44._In addition, byfiling the Agreementof record in this matter, Walnut breached
`
`Section 23 of the Agreement requiring confidentiality without exception whichis a material
`
`breach. Walnut could havefiled the complaint under seal.
`
`45,
`
` Assuch, Walnut’s action should be dismissed in its entirety as legally insufficient.
`
`WHEREFORE,Palmieri and Casciato respectfully request that this Court dismiss Counts
`
`I and II of the Plaintiff's Complaint as legally insufficient.
`
`Pa.R.C.P. 1028(a)(3) and 1019(a) and (f) — Walnut’s Damage Claims (Counts I_and
`ID
`
`46.
`
`Pa.R.C.P. 1019(a) states that the material facts upon which a claim is made must
`
`be stated in concise form.
`
`47,
`
`Pa.R.C.P. 1019(f) states that special damagesshall be specifically pled.
`
`48. While suing for both breach of contract and specific performance, the Agreement
`
`only permits Walnut one ofthose remedies. So, while Walnut can plead in the alternative,
`
`Walnut can only be successful under Count I or CountII, not both. Despite that, Walnutis
`
`claiming the same exact damages under both Counts.
`
`49.
`
`However, under the Agreement, if seeking damagesfor breach of contract (Count
`
`IL, Walnutis only entitled to “be reimbursed for all direct out-of-pocket costs and expenses
`
`including, but not limited to, title examination; survey, pest, environmental, and other property
`
`examinations; and reasonable attorneys’ fees, and the Parties hereto shall have no furtherrights
`
`or obligations under this Agreement...”. Complaint, Exhibit A, Paragraph B.1.
`
`50.
`
`The category of expense indicates the parties’ intent to allow the Buyer to recover
`
`title and due diligence expenditures. Expenditures for zoning, engineering, and architectural
`
`plansare not recoverable as nothing in the agreement contemplates that anything more than the
`
`

`

`usual pre-closing costs would be recovered. Expensesin rezoning andfor architectural plans
`
`were not contemplated.
`
`51.
`
`If seeking specific performance (CountI), Walnutis only entitled to “receiveits
`
`costs, expenses and reasonableattorney’s fees associated with the pursuit of such remedy...”.
`
`Complaint, Exhibit A, Paragraph B.2.
`
`52.
`
`Despite the foregoing, and in violation of Rule 1019(a), Walnut has made the
`
`identical damage claim under each Count, when by the terms of the Agreement, the agreed
`
`measure of recoverable damagesis explicitly different for each Count.
`
`53.
`
`In each Count, Walnut generally claims damages “in excess of $1,000,000”to
`
`“rezone and/or improve the Halkett Properties” (Complaint, Count I Paragraphs 37 and 47 and
`
`CountII Paragraphs 72 and 81), without specifically identifying what those damages are or how
`
`they were calculated (other than generally describing them as “engineering,legal, and otherfees,
`
`costs and/or expenses andpossible lost financing”) and then further demands “exemplary
`
`damages” under both Counts.
`
`54.
`
`Even if Walnut is permitted to claim more than the normalpre-closing expenses,
`
`such as engineering costs, design fees, zoning related costs, and lost financing, among others,
`
`they are not the usual and ordinary damagesthat flow from a breach of contract, so they must be
`
`specifically pled. Pa.R.C.P. 1019(f).
`
`55.
`
`Moreover, Walnutplead that those expenses were previously paid, so Walnutis
`
`required to separately itemize andidentify them. See General State Authority v. Lawrie & Green,
`
`356 A.2d 851 (Pa. Commw. 1976) holding that a lump sum recitation of damagesis insufficient
`
`in a breach of contract action where those damageshaveallegedly already been paid.
`
`10
`
`

`

`56. Without specificity for each of those figures, it is impossible for Defendants to
`
`know how muchistruly at issue in this matter and whether any of those alleged damagesare
`
`even recoverable under the Agreement.
`
`57.
`
`In addition,it is clear that Walnut’s exorbitant “damages”, with no specificity,
`
`and with exemplary damages added as the cherry on top, were pled not because Walnutbelieves
`
`those amounts are actually recoverable, but instead to “frighten the dickens”out of the
`
`Defendants. Bannar v. Miller, 701 A.2d 242, 247 (Pa. Super. 1997). In affirming a Dragonetti
`
`verdict against the defendant lawyers, the Court stated as follows:
`
`Appellants drafted a complaint that pleaded damages in excess of $1 million
`compensatory and $1 million punitive damages for each named defendanton each count.
`Notonlyis this clearly in violation of the Pennsylvania Rules of Civil Procedure, butit
`bespeaks a settled purposeof frightening the dickens outof citizens exercising their
`constitutional rights.
`
`58.
`
`If Walnut is going to proceed downthis path, this Court shouldat the very least
`
`force Walnutto put someeffort into its shoddy pleading and separately identify what damagesit
`
`is requesting under each Countandspecifically identify the amount of damages requested for
`
`each particular item, i.e., how muchfor legal fees, how much for zoning related costs, how much
`
`for engineering fees.
`
`WHEREFORE,Palmieri and Casciato respectfully request that this Court grant Palmieri
`
`and Casciato’s Preliminary Objection and direct Plaintiff to more specifically plead its damages
`
`in both CountsI and II of the Plaintiff's Complaint.
`
`Pa.R.C.P. 1028(a)(3) — Punitive Damages (Counts I and IT)
`
`59.
`
`Asstated previously, in addition to the exorbitant damage claim Walnutalso
`
`demandsthe recovery of “exemplary”, i.e., punitive damages.
`
`11
`
`

`

`60.
`
`Punitive damagesare not recoverablein a breach of contract action. McSheav.
`
`City ofPhiladelphia, 995 A.2d 334 (Pa. 2010).
`
`61.|The inclusion of such a demand could only be for the purposeof scaring the
`
`defendants (Bannar) and not for any legitimate purpose.
`
`WHEREFORE,Palmieri and Casciato respectfully request that this Court grant Palmieri
`
`and Casciato’s Preliminary Objection and direct Plaintiff to more specifically plead its damages
`
`in both Counts I andII of the Plaintiff's Complaint and order that the claim for exemplary
`
`damagesis ‘stricken from Counts I andII.
`
`Respectfully Submitted,
`
`MAURICE A. NERNBERG & ASSOCIATES
`
`
` Maurice AAVern
`
`
`Counselfor Defendants
`
`
`12
`
`

`

`IN THE COURT OF COMMONPLEAS OF ALLEGHENY COUNTY, PENNSYLVANIA
`
`WALNUT CAPITAL ACQUISITIONS
`INC.,
`
`Plaintiff,
`
`v.
`
`DANIEL PALMIERIetal.
`
`Defendants.
`
`CIVIL DIVISION
`
`G.D. 23-002442
`
`BRIEF IN SUPPORT OF DEFENDANTS’ PRELIMINARY OBJECTIONS TO
`PLAINTIFF’S ACTION FOR DECLARATORY RELIEF AND BRIEF IN SUPPORT
`
`I.
`
`Introduction
`
`Walnut Capital Acquisitions, Inc. (“Walnut”), filed an Action for Declaratory Relief that
`
`purports to declare the parties’ rights and obligations under a written contract (Count I) and seeks
`
`recovery for breach of contract (Count IT). However, there are 19 Sellers in the Agreement and
`
`Walnutis only suing 12 of them. Walnut did not name as Defendantsin this lawsuit Robert G.
`
`Laird and Jean M. Laird, Giuseppe Palmieri and Lidia P. Palmieri, Leo D. Pasquarelli and
`
`Sandra L. Pasquarelli, and Diane Melchitzky (collectively the “Non-Defendant Sellers”).
`
`In addition, and in an attempt to frighten the defendants, (1) Walnut demanded
`
`exorbitant, unspecified damages,in violation of both the terms of the Agreement and the Rules
`
`of Civil Procedure, (2) madeclaimsthat are barred by Walnut’s own admissions and the terms of
`
`the Agreement, and (3) demanded “exemplary” damagesthat are unavailable as a matter of law.
`
`i.
`
`Argument
`
`A.
`
`Failure to Join a Necessary and Indispensable Party — Counts I andIT
`
`Failure to join an indispensable party deprives a court of subject matter jurisdiction and
`
`mayberaised at any stage of the proceedings, even after judgment. DeCoatsworth v. Jones, 607
`
`

`

`A.2d 1094, 1101 (Pa. Super. 1992). Factually andlegally, the Non-Defendant Sellers are
`
`indispensableparties to this action.
`
`The Agreementstates that there is no obligation to close unlessall ofparcels owned by
`all ofthe parties are being sold. See Agreement of Sale, Paragraph 2(E). The Declaratory
`Judgment Actspecifically states that “all personsshall be madeparties who have orclaim any
`interest which would be affected bythe declaration...”. 42 Pa.C.S.§ 7540(a).
`The Agreementis clear that Walnut must purchase all ofthe properties at once:
`“All Real Estate Parcels Are Included: The Parties acknowledgethatis their express
`understanding that each parcel ofReal Estate is to be conveyed to and acquired by Buyer
`simultaneously, and Buyer’s obligations to close on the purchaseofany parcel ofReal
`Estate is expressly conditioned uponall ofthe parcels of Real Estate being
`simultaneously conveyed to Buyerby each Seller,”
`
`Agreementof Sale, Paragraph 2(E).
`
`In fact, Walnut sent Notice of Intent to Close and Notice of Default to the Non-Defendant
`Sellers (See Plaintiff's Exhibits B and C), but did not include them inthislitigation. Importantly,
`Walnut’s “Notice ofIntent to Close” (Exhibit B), sent 226 days after the closing date set by the
`Agreement, was sent to the Non-DefendantSellers and readily acknowledgesthat “[p]ursuant to
`Paragraph 2(E) ofthe Agreementofsale,it is requiredthat all ofthe Properties be
`simultaneously conveyedto the Buyer.” And, Walnut’s “Notice ofDefault” (Exhibit C), which
`wasalso sent to the Non-DefendantSellers, cites 2(E) and contends that “Closing did not occur
`because a few ofthe Sellers have refusedto convey their respective properties.”
`
`Giventhe foregoing,it is readily apparent that the Non-Defendant Sellers’ rights and
`interest in the Agreementare so integral to this matter that it cannot proceed without them.
`“Whethera party is indispensable is viewed from the perspective ofprotecting the rights ofthe
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`absent parties.” Montella v. Berkheimer Assocs., 690 A.2d 802, 803 (Pa. Commw. 1997).
`Relevantcriteria for determining the sameis as follows:
`
`BRYN
`
`Doabsentparties havearight or interest related to the claim?
`If so, whatis the nature ofthe right or interest?
`Is that right or interest essential to the merits of the issue?
`Can justice be afforded withoutviolating due processrights ofabsent parties?
`Montella, 690 A.2d at 803. Here, the Non-Defendant Sellers clearly have an interest in the claim
`as they are parties to the Agreement Walnutis trying to enforce. The Agreement specifically
`states that all properties must be purchased together, and, ifWalnutis successful, Walnut would
`
`owe the Non-DefendantSellers $1.35 million per property.
`
`Mostimportantly, it may be that one or moreofthe Non-Defendant Sellers want the
`
`Agreement enforced as to their properties,i.e., they wantto sell their properties to Walnut and
`get paid what they are due under the Agreement. While Defendants’ contend the Agreementis
`void and unenforceable, ifthe Non-DefendantSellers feel otherwise, they must be given the
`opportunity to be heard now. Any outcomehere could deprive the Non-DefendantSellers of
`their rights due to Paragraph 2(E) ofthe Agreement, whether byres judicata, collateral estoppel,
`or that they are not“all” ofthe Sellers. The reason being, if Palmieri and Casciato are successful
`
`and they are not requiredto sell to Walnut, then Walnutwill certainly argue the Non-Defendant
`Sellers cannot enforce the Agreement, because Walnut can no longer purchase all ofthe
`properties as required by Paragraph 2(E). Said another way, ifPalmieri and Casciato win, the
`Non-DefendantSellers will lose their ability to separately enforce the Agreement.
`
`Conversely, the Non-Defendant Sellers, like Palmieri and Casciato, may no longer wish
`to sell. But, ifWalnut is successful here, and even though the Non-DefendantSellers may have
`raised other defensesnot raised by Palmieri and Casciato, Walnut could arguethat the Non-
`DefendantSellers are bound by the Court’s decision given Section 2(E) of the Agreement.
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`In addition to the foregoing, Pa.R.C.P. 2227/(a) states that parties havingonly a joint
`interest in the subject matter must bejoined. Here, the Non-DefendantSellers clearly have ajoint
`interest in the subject matter as they are signatories to the Agreement. And, ifthe Agreementis
`enforced, the Non-DefendantSellers are entitled to millions ofdollars for their properties; but, if
`not enforced, the Non-Defendant Sellers will lose their right to separately enforceit given that
`the Agreementonly obligates Walnutto closeifit obtains all properties. Thus, their merestatus
`as Sellers under the Agreement renders the Non-DefendantSellers necessary parties to this
`action. See ESPEnters., LLC vy. Garagozzo, 2005 Phila. Ct. Com. Pl. LEXIS 289, *3-5 (Pa.
`Com.Pl. 2005) citing Vale Chemical Coy. HartfordAccident andIndemnity Co., 516 A.2d 684,
`685 (Pa. 1986) and holding as follows:
`
`Here, in its Complaint, plaintiffs are asking the Court to declare that the Agreement of
`Sale contract is void. However, notall ofthe parties to the Agreementof Sale are parties
`to this litigation, namely Fante and Disco. Fante and Disco, along with Garagozzo, are
`the ownersandthesellers ofthe property in the AgreementofSale. Since the Court's
`determination of the enforceability ofthe Agreementof Sale will affect Fante's and
`Disco's rights and interests, they are necessary parties to the currentlitigation.
`Quite simply, the Non-DefendantSellers’ rights and obligations are so integral to this
`matter, and so intertwined with the rights and obligations ofthe other parties, that no decision
`can be madewithout possibly impairing, the Non-Defendant Sellers’ rights.
`Finally, this action is seeking specific performanceof12 properties, but the Agreementis
`for the purchase of 19 properties. As discussed infra, Walnutis claiming entitlement to certain
`fees and costs under the Agreement for pre-purchase costs as well as attorney fees in this case, as
`per Walnut’s interpretation ofthe Agreement. Walnutis claiming all ofits pre-purchasecosts for
`all ofthe parcels, but ifthe Non-Defendant Sellers are not parties, then the Defendantsellers
`would be subject to the risk ofpaying the entire cost without contribution.Ifthe Defendant
`sellers later seek contribution from the Non-DefendantSellers, they mayraise different defenses
`
`4
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`so that there are inconsistent verdicts. Further, Walnutis seeking legal fees for enforcingits
`claim to purchase the 12 properties, but that meansthesellers ofthose properties are being asked
`to bear an extra burden because Walnutis not allocating the fees amongall the properties.
`Quite simply, the only waythis can be sorted outis forall sellers to be joined.
`B.
`Failure to Conform to Law — Declaratory Judgment Act (Count I)
`Count I ofWalnut’s action was brought pursuantto the Declaratory Judgment Act which,
`in pertinent part, states as follows:
`
`“General rule. -- When declaratoryreliefis sought, all persons shall be made parties who
`have or claim anyinterest which would be affected by the declaration, and no declaration
`shall prejudice the rights ofpersons not parties to the proceeding.”
`
`42 Pa.C.S. § 7540(a). As stated previously, the Non-Seller Defendants haveinterests that would
`be affected by the declaration requested by this Court. The Non-Seller Defendants, among other
`scenarios, may want the Agreement enforced and are being robbedoftheir opportunity to say so
`or may want paid ifthe Agreement is enforced, yet the declaration imposes no such obligation on
`Walnut.Atthe very least, pursuant to Pa.R.C.P. 2227(a), the Non-DefendantSellers have ajoint
`interest in the outcomeofthe requested declaratory relief. As such, they must be joined in Count
`I or it must be dismissed.
`
`C.
`
`Demurrer — Walnut’s Claims Barred By ThePlain Languageofthe
`Agreement and Walnut’s Admitted Breach (Counts I and I)
`
`The Agreementstates that closing shall occur “no later than December15, 2021.” Exhibit
`
`A, Page 2, Section 5. Thefact that the Agreementsets a specific closing date to be “no later than
`December 15, 2021”, necessarily implies that time was ofthe essence for this Agreement.
`Despite that, in Paragraph 22ofits Complaint, Walnut readily admits thatit failed to
`
`close by December 15, 2021 and does not plead any legal or equitable basis for howit could
`unilaterally alter the closing date. Instead, Walnut admits it waited 245 daysafter closing date,
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`

`and after the buyers declared that Walnut had defaulted by failing to close by December15,
`2021, to try to unilaterally schedule another closing. Failure to close by the date identified in the
`Agreement, or at the very least within a reasonable timethereafter, precludes enforcementofthe
`Agreement by Walnut. Jamp Dev. v. New Beginnings Church Angely Asset Mgmt. Co., 2022 Pa.
`Super. Unpub. LEXIS 2662(Pa. Super. 2022); Reagan v. D. & D. Builders, Inc., 419 A.2d 700
`(Pa. Super. 1980). Thus, by its own admissions, Walnut breached the Agreement whenit failed
`to close on December 15, 2021 anda breachingparty loses the legal ability to enforce that
`contract. Nikole, Inc. v. Klinger, 603 A.2d 587 (Pa. Super. 1992).
`Importantly, Walnut does notplead thatit attended closing and actually tendered the
`amounts due under the Agreement. As such, Walnutis not entitled to seek specific performance.
`See Jamp Dev. v. New Beginnings Church Angely Asset Mgmt. Co., 2022 Pa. Super. Unpub.
`LEXIS 2662 (Pa. Super. 2022) citing McKuen v, Serody, 112 A. 460, 461 (Pa. 1921). In granting
`a demurrerto Plaintiffs request for specific performance, the Supreme Court in McKuen held as
`follows: “Theallegati