NATIONWIDE LIFE INSURANCE COMPANY v. FRANKLIN MILLS ASSOCIATES LIMITED PARTNERSHIP

Filing 42

MEMORANDUM. SIGNED BY HONORABLE R. BARCLAY SURRICK ON 3/31/2017. 3/31/2017 ENTERED AND COPIES E-MAILED.(amas)

IN THE UNITED STATES DISTRICT COURT
FOR THE EASTERN DISTRICT OF PENNSYLVANIA

NATIONWIDE LIFE INSURANCE COMPANY :
:
v.
:
:
FRANKLIN MILLS ASSOCIATES
:
LIMITED PARTNERSHIP
:

CIVIL ACTION
NO. 13-0038

MEMORANDUM
SURRICK, J.

MARCH 31 , 2017

Presently before the Court are Defendant’s Motion for Partial Summary Judgment (ECF
No. 34) and Plaintiff’s Motion for Summary Judgment (ECF No. 35). For the following reasons,
the Motions will be denied.
I.

BACKGROUND
This action is a dispute over the terms of a purported settlement agreement between

Plaintiff Nationwide Insurance Company (“Nationwide”) and Defendant Franklin Mills
Associates Limited Partnership (“Franklin Mills”).
A.

The Assessment Litigation

This is the second time that these parties have been before this Court to settle a dispute
over a property located at 1933 Franklin Mills Circle, a/k/a 4301 Byberry Road, Unit M3,
Philadelphia, Pennsylvania (the “Property”). The Property is part of a parcel of land that was
developed as the Franklin Mills Mall. (Compl. ¶ 7, ECF No. 1.) In the first action (the
“Assessment Litigation”), Franklin Mills filed a complaint alleging that Nationwide owed it
promotional and maintenance assessment payments (the “Assessments”) related to the Property.
(See Compl., Franklin Mills Assocs., L.P. v. Nationwide Life Ins. Co., No. 09-3045 (E.D. Pa.
July 8, 2009), ECF No. 1.) The parties filed cross-motions for summary judgment at the close of

discovery. We determined that “the covenant to pay Annual Assessments runs with the land and
is binding on subsequent property owners. Accordingly, summary judgment in favor of Plaintiff
on its breach of contract claim is appropriate with respect to Defendant’s liability to pay Annual
Assessments.” Franklin Mills Assocs., L.P. v. Nationwide Life Ins. Co., 836 F. Supp. 2d 238,
250 (E.D. Pa. 2011). Summary judgment with respect to damages was denied pending further
discovery and a trial, if necessary. Id. at 250-51.
B.

The Settlement Agreement

Following our summary judgment decision, the parties engaged in a settlement
conference (the “Settlement Conference”) before then-Magistrate Judge L. Felipe Restrepo. Jay
Kagan, Esq., represented Franklin Mills at the conference, while Paul Scheuritzel, Esq.,
represented Nationwide. Each party also had a corporate representative present for the
negotiations, namely James Owen, Esq. for Franklin Mills and Dana Anthony, Esq. for
Nationwide. At the Settlement Conference, which took place on May 31, 2012, Nationwide and
Franklin Mills reached an agreement (the “Settlement Agreement”) to settle the Assessment
Action, the essence of which was read into the record before Judge Restrepo as follows:
Mr. Kagan: We have resolved the litigation for a total sum of $1,450,000. Of
that amount, $636,000 is to be paid to my client on or before June 10th, 2012. The
remaining $814,000 will be paid at the closing of a real estate transaction which
I’m going to discuss.
As a secondary part of the resolution of this case, Franklin Mills has agreed to
take—take ownership of this particular parcel of land from Nationwide subject to
a couple of conditions. The first: Franklin Mills will be afforded an opportunity
to expect [sic] the premises and Mr. Scheuritzel and I will workout [sic] some
language setting forth the criteria for that inspection and any limitations relating
thereto.
Nationwide has also indicated that it will provide insurable title to Franklin Mills.
We have advised Nationwide that this entire transaction has to be approved by
David Simon, the CEO of Simon Property Group and, also, has to be approved by
Franklin Mills and Simon Property Group’s lenders.
2

Mr. Scheuritzel: And, just, it’s my understanding that these points will be
reduced to a—a settlement agreement with mutual releases according to
customary terms before June 10th.
Mr. Kagan: Yes.
Mr. Scheuritzel: And—and that we would like a confidentiality provision as well.
I imagine you would, too.
Mr. Kagan: Yes.
(May 31, 2012 Hr’g Tr. 3:25-5:1, Compl. Ex. A.) Nationwide alleges that during negotiations
with Judge Restrepo, the parties agreed that Franklin Mills’ right to reject the Property would be
limited to a situation in which the inspection revealed the building to be structurally unsound (the
“Structural Inspection Limitation”). (Compl. ¶ 14.) Nationwide also alleges that it disclosed that
there were issues regarding water infiltration with the Property, and that it would not accept this
as a reason for Franklin Mills to reject the Property. (Id.) On May 31, 2012, understanding that
the matter had been settled, we entered an order dismissing the Assessment Action pursuant to
Fed. R. Civ. P. 41.1(b).
The parties focused on the June 10 date to put the Settlement Agreement in writing
because the trial on damages was scheduled to begin on June 11, 2012. (Compl. ¶¶ 8, 15.) In the
weeks following the Settlement Conference, Nationwide and Franklin Mills engaged in a series
of communications in an attempt to fulfill the terms of the Settlement Agreement. Excerpts from
the email chain between Messrs. Scheuritzel and Kagan read as follows:
June 5, 2012 (1:35 PM):
(Nationwide)

Mr. Kagan (Franklin Mills) to Mr. Scheuritzel

Please forward the [$636,000] check to me on or before June 10 (which I
just realized is a Sunday—so preferably by Friday 6/8). Thank you. Jay

3

June 5, 2012 (2:49 PM): Mr. Scheuritzel to Mr. Kagan
Thanks. Have Mr. Simon and the lenders approved the settlement?
June 7, 2012 (2:20 PM): Mr. Kagan to Mr. Scheuritzel
Paul—we need a current Phase 1. Thereafter, the documentation needed
to close will include an acceptable property condition report, title report,
survey, zoning compliance, no legal violations rep and closing
adjustments for real estate taxes.
Please be reminded that the check for $636,000 should be delivered to my
office tomorrow.
June 7, 2012 (6:26 PM): Mr. Scheuritzel to Mr. Kagan
Please take a look at the attached agreement, which I believe embodies our
discussions. In it, I have tried to address your concerns expressed below.
Zoning compliance will be shown by an ALTA survey. We’ll also need
an L&I cert to transfer the property, so I think the items you raise are
unlikely to cause problems.
My client has yet to review the attached, so I need to reserve their
comments.
(Compl. Ex. C.)
The attachment to this email is a draft of the written Settlement Agreement (“June 7
Proposed Written Agreement”) created by counsel for Nationwide. It contains the following
provision:
2.
Transfer of the property. Subject only to a physical inspection of the
Property by a reputable and independent third-party inspector reasonably
acceptable to Nationwide engaged by Franklin Mills, which inspection shall be
completed within thirty (30) days after execution of this Confidential Settlement
Agreement and Release and documented in a written report, Nationwide shall
transfer and Franklin Mills will accept by quit claim deed insurable title . . . to the
Property. Such transfer shall occur within forty-five (45) days after execution of
this Confidential Settlement Agreement and Release. Simultaneous with the
transfer of title to the Property from Nationwide to Franklin Mills, Nationwide
shall make an additional payment to Franklin Mills in the amount of Eight
Hundred Fourteen Thousand Dollars ($814,000.00), to be paid to Franklin Mills
Associates Limited Partnership by check . . . .
4

The purpose of Franklin Mills’ physical inspection of the Property is to determine
whether the structural elements (those that are load bearing) of the existing
improvements at the Property are sound. Franklin Mills agrees to accept transfer
of the Property unless structural repairs are required and necessary to render such
improvements suitable for occupation and such repairs will cost more than
$1,000,000 to implement . . . .
Except as otherwise provided herein, Franklin Mills shall accept the Property “as
is.”
(Id.)
In a separate June 7, 2012 email exchange between Kagan and Scheuritzel each sought to
clarify his client’s position:
June 7, 2012 (4:14 PM): Mr. Kagan to Mr. Scheuritzel
Thx. Just to clarify--your email to me earlier asked about Mr. Simon and
the lenders approving the “settlement”. Your question was a bit broad.
They have already approved the settlement of the lawsuit for $636,000.
We advised of that at the mediation last week. They are now in the
process of looking at, evaluating and approving the transaction taking the
property into the Simon portfolio. My last email to you contained a list of
items we need to complete that process. Thx.
June 7, 2012 (4:23 PM): Mr. Scheuritzel to Mr. Kagan
As far as we are concerned there is one settlement transaction that needs to
be approved in principle before the $636,000 is paid. Nationwide will pay
the $636,000 subject to a later inspection for structural problems and
delivery of insurable title (which would necessarily require the issuance of
a new title report).
I will have the check in my possession Saturday morning.
Zoning should not present a problem because nothing has occurred at the
property in the last 11 years. I cannot imagine that there is anything
controversial that would be disclosed by a survey. Bob Blue did the last
survey of which I am aware.
(Def.’s Summ. J. Mot., Ex. A 115.)
On June 8, Kagan emailed Scheuritzel asking him to “confirm the $636k is en route to
me.” (Ans. Ex. B, ECF No. 7.) Scheuritzel replied, “I have the check in my possession.” (Id.)
5

The next day, Kagan sent an email stating that he would send someone to pick the check up on
Monday, June 11. (Id.) The following is an excerpt from a subsequent email exchange that
occurred between Scheuritzel and Kagan in which they again attempted to clarify the terms
under which they were moving forward:
June 11, 2012 (8:47 AM): Mr. Scheuritzel to Mr. Kagan
Are you sending over a signed settlement agreement?
June 11, 2012 (11:26 AM): Mr. Kagan to Mr. Scheuritzel
Regarding a settlement agreement, the contemplated transaction
transferring the property from Nationwide to Franklin Mills should not be
included in a settlement document resolving the lawsuit. That is a
separate item. If you want a Settlement Agreement for the lawsuit, then
the key terms are as follows:
1.

Nationwide has paid the compromised and agreed-to amount of
$636,000 which brings its Assessments account current through
May 31, 2012, including interest, attorneys fees etc.

2.

The lawsuit captioned Franklin Mills v. Nationwide pending
before Judge Surrick in the EDPA has been dismissed.

3.

Starting June 1, 2012 and running through December 31, 2012, the
Assessments will accrue at the Base amounts as contemplated in
the PMI Declaration and Supplemental Agreement.

4.

Effective January 1, 2013, the Assessments will be recalculated
and charged to Nationwide based on the actual 2012 expenses
relative to the actual 2008 expenses, as contemplated by the PMI
Declaration and Supplemental Agreement.

5.

Nationwide re-acknowledges the validity of the PMI Declaration
and Supplemental Agreement and its ongoing obligation (for itself
and its successors in title) to pay Assessments.

6.

Provided the separate transaction involving the transfer of title in
the Property from Nationwide to Franklin Mills along with
Nationwide’s additional payment of $814,000 to Franklin Mills
occurs as contemplated (with the requisite lender and corporate
approvals), then Nationwide will owe no further Assessments, as
contemplated in numbers 2, 3 and 4 above.
6

June 11, 2012 (11:51 AM): Mr. Scheuritzel to Mr. Kagan
Thanks. There is new material below that I must discuss with Nationwide.
I am in and out of the office right now, but I will hand deliver the check to
you this afternoon based upon the settlement we put on the record and
then we can resolve the other outstanding issues soon.
June 11, 2012 (12:09 PM): Mr. Kagan to Mr. Scheuritzel
That should be fine as long as I have the check in hand today. I don’t
really think there is new material there. More like clarification so that in
the unlikely event the property transaction cannot occur there is clarity on
what happens.
(Def.’s Summ. J. Mot., Ex. A 136-37.)
Later that same day, Scheuritzel sent a letter to Kagan with an enclosed check for
$636,000. (Pl.’s Summ. J. Mot. 9.) The letter accompanying the check reads in pertinent part:
In accordance with the parties’ agreement, which we placed on the record before
the court on May 31, 2012, I have enclosed with this correspondence a check in
the amount of $636,000 from Nationwide payable to Franklin Mills Associates
Limited Partnership. This amount represents an accord and satisfaction regarding
all outstanding amounts claimed by Franklin Mills in the above-referenced
litigation and the agreed settlement proceeds to settle the litigation in its entirety,
including assessments, interest and costs of collection including attorney’s fees
and costs. If you disagree with the foregoing, please return the check to me.
The settlement terms placed on the record on May 31, 2012 required that Franklin
Mills and Nationwide enter into a written settlement agreement, which so far has
not occurred. I have also enclosed a copy of the draft settlement agreement that I
delivered to you last week. I therefore ask that you hold these proceeds in escrow
until the parties have fully executed an agreed-upon settlement agreement
consistent with the terms we set forth on the record.
If I have misapprehended anything please let me know.
(Compl. Ex. D.) Despite the request to place the proceeds in escrow until the parties reduced the
Settlement Agreement to writing, Franklin Mills deposited the check. (Compl. ¶ 25.)
The June 11 letter also had attached a different proposed written agreement (“June 11
Proposed Written Agreement”). The new written agreement eliminated a proposed process by
7

which Nationwide could also have its own inspection conducted, as well as a proposal for the
parties to negotiate new terms if Franklin Mills failed to take title to the property under a
structural defect exception. (Def.’s Br. Supp. Summ. J. Mot. ¶ 44 n.1.) Nationwide also
removed a clause containing Nationwide’s representations regarding its provision of a Phase I
Environmental report (“Phase I”) and lack of knowledge of conditions at the Property
constituting legal violations. (Id.)
C.

The Property Inspection

On June 25, 2012, Franklin Mills arranged for an inspection and Phase I Environmental
Assessment of the Property by AEI Consultants. (Compl. ¶ 27.) AEI conducted the inspection
on July 2, and prepared a written report, which it transmitted to Franklin Mills on July 17. (Id.
¶¶ 28-29.) The Phase I section of the report revealed “obvious visual signs of mold growth or
conditions conducive for mold growth” and concluded that “[b]ased upon the amount of fungal
growth observed . . . a certified mold remediation contractor [should] be consulted.” (Compl.,
Ex. G, Phase I at ii-iii.) Franklin Mills did not immediately share the report with Nationwide.
(Compl. ¶ 30.) On July 24, Kagan emailed a copy of the report to Scheuritzel. The email stated
that “there are major problems (significantly, but not limited to, the presence of mold) that need
to be remedied. Given the results of the inspection and the Phase I Environmental, my client is
not presently prepared to proceed with the contemplated property transaction.” (Id. ¶ 31; Ex. E.)
Nationwide did not respond to the email until September 2012. (Ans. ¶ 50.)
D.

Procedural History

Nationwide filed this action against Franklin Mills on January 3, 2013, alleging that it
had breached the Settlement Agreement by refusing to complete the Property transfer. (Compl.
¶¶ 36-42.) Nationwide also brings claims for specific performance (id. ¶¶ 43-51) and equitable
8

estoppel (Id. ¶¶ 52-60). Franklin Mills filed a Motion for judgment on the pleadings on April 4,
2013. (Mot. J. Pleadings, ECF No. 9.) We issued a memorandum and order denying the Motion
on September 23, 2014. (ECF No. 19.) Franklin Mills filed a Motion for partial summary
judgment. Nationwide filed a Motion for summary judgment. Both parties have filed responses
and replies to the instant summary judgment Motions. (See Def.’s Br. Opp. Pl.’s Summ. J. Mot.,
ECF No. 36; Pl.’s Br. Resp. Def.’s Summ. J. Mot., ECF No. 37; Def.’s Reply Br., ECF No. 40;
Pl.’s Reply Br., ECF No. 41.) This Memorandum addresses each of the arguments made by the
parties in support of their respective motions.
II.

LEGAL STANDARD
Under Federal Rule of Civil Procedure 56(a), summary judgment is proper “if the movant

shows that there is no genuine dispute as to any material fact and the movant is entitled to
judgment as a matter of law.” A dispute is “genuine” if there is a sufficient evidentiary basis on
which a reasonable jury could return a verdict for the non-moving party. Kaucher v. Cnty. of
Bucks, 455 F.3d 418, 423 (3d Cir. 2006) (citing Anderson v. Liberty Lobby, Inc., 477 U.S. 242,
248 (1986)). “[A] factual dispute is material only if it might affect the outcome of the suit under
governing law.” Id. The court must view the evidence in the light most favorable to the nonmoving party. Galena v. Leone, 638 F.3d 186, 196 (3d Cir. 2011). However, “unsupported
assertions, conclusory allegations, or mere suspicions” are insufficient to overcome a motion for
summary judgment. Schaar v. Lehigh Valley Health Servs., Inc., 732 F. Supp. 2d 490, 493 (E.D.
Pa. 2010) (citing Williams v. Borough of W. Chester, 891 F.2d 458, 460 (3d Cir. 1989)).
Where the nonmoving party bears the burden of proof at trial, the moving party may
identify an absence of a genuine issue of material fact by showing the court that there is no
evidence in the record supporting the nonmoving party’s case. Celotex Corp. v. Catrett, 477
9

U.S. 317, 322 (1986); UPMC Health Sys. v. Metro. Life Ins. Co., 391 F.3d 497, 502 (3d Cir.
2004). If the moving party carries this initial burden, the nonmoving party must set forth specific
facts showing that there is a genuine issue for trial. See Fed. R. Civ. P. 56(c) (“A party asserting
that a fact . . . is genuinely disputed must support the assertion by . . . citing to particular parts of
materials in the record . . . .”); see also Matsushita Elec. Indus. Co., v. Zenith Radio Corp., 475
U.S. 574, 586 (1986) (noting that the nonmoving party “must do more than simply show that
there is some metaphysical doubt as to the material facts”). “Where the record taken as a whole
could not lead a rational trier of fact to find for the non-moving party, there is no ‘genuine issue
for trial.’” Matsushita, 475 U.S. at 587 (citation omitted).
Where, as here, the parties each file motions for summary judgment, “Rule 56(c) does not
mean that the case will necessarily be resolved at the summary judgment stage. The court must
consider the motions separately. Each party must still establish that no genuine issue of material
fact exists and that it is entitled to judgment as a matter of law.” Atl. Used Auto Parts v. City of
Phila., 957 F. Supp. 622, 626 (E.D. Pa. 1997).
III.

DISCUSSION
Nationwide’s Complaint asserts claims for breach of contract (Count One), specific

performance of the Settlement Agreement (Count Two), and equitable estoppel (Count Three).
Franklin Mills’ answer includes counterclaims for breach of contract (Counts One and Two).
Franklin Mills’ Motion for Partial Summary Judgment argues that it is entitled to summary
judgment on all counts in the Complaint. Nationwide’s Motion for Summary Judgment contends
that it is entitled to summary judgment on all counts in the Complaint, as well as on Franklin
Mills’ counterclaims. After a careful review of the entire record, we conclude that there are

10

genuine issues of material fact on all claims. Therefore, summary judgment as to all Counts of
the Complaint and the Counterclaims will be denied.
A.

Nationwide’s Breach of Contract Claim
1.

Statute of Frauds

In its Motion, Franklin Mills contends that the Statute of Frauds bars enforcement of any
oral agreement Franklin Mills may have made with Nationwide to take legal title to the Property.
Franklin Mills asserts that because the terms under which the Property was to be transferred were
never reduced to a signed writing, Nationwide has no legally enforceable contract.
The statute of frauds is a deeply rooted principle of contract law that maintains that
transfers in land title must be in writing. Bayer v. CitiMortgage, Inc., No. 11-02105, 2014 WL
4187556, at *4 (M.D. Pa. Aug. 22, 2014) (citing 33 P.S. § 1; Kurland v. Stolker, 533 A.2d 1370,
1372 (Pa. 1987)). However, the statute of frauds related to land interests “is the type which is
waivable and constitutes a declaration of public policy.” Bethlehem Steel Corp. v. Tri State
Indus., Inc., 434 A.2d 1236, 1239 (Pa. Super. Ct. 1981). Therefore, oral agreements “relating to
interests in land” will not be rendered void. Id. Unless a settlement agreement is made
contingent upon reducing its terms to writing, the statute of frauds defense is waived when
parties participate in settlement talks in an attempt to resolve an underlying dispute. Bayer, 2014
WL 4187556, at *4; Standard Steel, LLC v. Buckeye Energy, Inc., No. 04-538, 2005 WL
2403636, at *13 (W.D. Pa. Sept. 29, 2005); see also Green v. John H. Lewis & Co., 436 F.2d
389, 390 (3d Cir. 1970) (“An agreement to settle a law suit, voluntarily entered into, is binding
upon the parties, whether or not made in the presence of the court, and even in the absence of a
writing.”); Pulcinello v. Consol. Rail Corp., 784 A.2d 122, 124 (Pa. Super. Ct. 2001) (“An oral
settlement agreement may be enforceable and legally binding without a writing.”); Good v. Pa.
11

R.R. Co., 384 F.2d 989, 990 (3d Cir. 1967) (per curiam) (holding that an oral settlement
agreement “was valid and binding despite the absence of any writing or formality”).
Here, Franklin Mills asserts that any agreement to transfer the Property cannot be
enforced because conveyances of real property must be reduced to a signed writing. To avoid
the “settlement exception” to the statute of frauds requirement, Franklin Mills must either
demonstrate that the Settlement Agreement was made contingent upon reducing its terms to a
signed writing or that there is a substantial risk of fraud in its enforcement. See Meadows v.
Harcum Coll., No. 13-2946, 2014 WL 5591035, at *3 (E.D. Pa. Nov. 4, 2014) (“It is well-settled
that settlements of matters in dispute are favored by the law and must, in the absence of fraud
and mistake, be sustained. Otherwise any settlement agreement will serve no useful purpose.”)
(internal quotation marks omitted); see also Flight Sys., Inc. v. Elec. Data Sys. Corp., 112 F.3d
124, 128 (3d Cir. 1997) (“Pennsylvania courts have declared that the purpose of the statute of
frauds is to shield persons with interests in land from being deprived of those interests by
perjury, not to arm contracting parties with a sword they may use to escape bargains they rue.”).
Franklin Mills has not met its burden.
The transcript of the proceedings before Judge Restrepo makes it clear that both Franklin
Mills and Nationwide planned to reduce the terms of the Settlement Agreement to writing before
June 11, 2012. However, there is nothing in the transcript to suggest that the agreement itself
was made contingent upon such a writing. What is clear is that an agreement was reached.
Counsel on behalf of Franklin Mills stated on the record, “[w]e have resolved the litigation for a
total sum of $1,450,00.00.” (May 31, 2012 Hr’g Tr. 3:25.) Counsel further offered, “Franklin
Mills has agreed to take – take ownership of this particular parcel of land subject to a couple of
conditions.” Counsel went on to provide some of the specific conditions of the land transfer.
12

Franklin Mills again acknowledged the validity of the agreement through various emails
sent by its counsel. In his June 11, 2012 (11:26 AM) email, Kagan wrote, “if title in the Property
from Nationwide to Franklin Mills . . . occurs as contemplated . . . then Nationwide will owe no
further Assessments.” In response to an email some thirty minutes later from Scheuritzel, in
which he stated that Nationwide will proceed based upon the oral Settlement Agreement placed
on the record, Kagan responded, “[t]hat should be fine as long as I have the check in hand
today.” (June 11, 2012 (12:09 PM) Kagan email.) This is further evidence that Franklin Mills
was intending to take title to the Property as discussed during the Settlement Agreement. See In
re Beeruk’s Estate, 241 A.2d 755, 758 (Pa. 1968) (“[W]e should always be satisfied with ‘some
note or memorandum’ that is adequate to convince the court that there is no serious possibility of
consummating fraud by enforcement.” (quoting 2 Corbin on Contracts § 498 (1950))).
Franklin Mills asserts that there must be “strict adherence” to the statute of frauds in this
case to prevent any “mischief” that Nationwide is trying to perpetrate. (Def.’s Summ. J. Mot.
15-16.) What Franklin Mills fails to recognize is that the very purpose of placing a settlement
agreement on the record before a magistrate is to prevent that very mischief. We are satisfied
that the transcript of the proceedings before Judge Restrepo and the subsequent emails sent by
Franklin Mills’ counsel provide evidence that the parties entered into a settlement agreement, the
terms of which were not strictly conditioned upon a signed writing. Accordingly, the purpose of
statute of frauds has been satisfied as to the property portion of the Settlement Agreement.
Franklin Mills’ Motion for Partial Summary Judgment based on its statute of frauds defense will
be denied.
2.

Absolute Right of Rejection

13

Franklin Mills next argues that summary judgment should be entered in its favor on
Nationwide’s breach of contract claim because the “entire transaction [had] to be approved by
David Simon, the CEO of Simon Property Group, and, also, [had] to be approved by Franklin
Mills and Simon Property Group’s lenders.” (Def.’s Summ. J. Mot. 29-30.) Therefore, it
contends that Franklin Mills retained an absolute right to reject the Property upon inspection.
Even though neither party contends that no agreement was formed during the Settlement
Conference, the legal effect of the agreement can be called into question by such an absolute
right to reject.
“Settlement agreements are nothing more than contracts, and therefore basic contracts
principles apply.” Calif. Sun Tanning USA, Inc. v. Elec. Beach, Inc., 369 F. App’x 340, 346 n.6
(3d Cir. 2010). The necessary elements of a contract are offer, acceptance, and consideration.
Muhammad v. Strassburger, McKenna, Messer, Shilobod & Gutnick, 587 A.2d 1346, 1349 (Pa.
1991). Acceptance of an offer “must be unconditional and absolute.” O’Brien v. Nationwide
Mut. Ins. Co., 689 A.2d 254, 258 (Pa. Super. Ct. 1997) (citation omitted). An agreement formed
in the context of settlement talks, however, will not be rendered unenforceable simply because
principals to the litigation are required to ratify its terms. See, e.g., A.P. ex rel. Phinisee v.
United States, 556 F. App’x 132, 136 (3d Cir. 2014) (holding that an “implied obligation to use
good faith” keeps ratification requirements from being “illusory”). In such cases, ratification
serves as a condition precedent that must occur for the contract to become legally binding on the
ratifying party. See, e.g., McClure v. Twp. of Exeter, No. 05-5846, 2006 WL 2794173, at *3
(E.D. Pa. Sept. 27, 2006) (“[T]he agreement is still enforceable because [the plaintiff] assented,
and, by ratifying the settlement agreement, [the defendant] satisfied the [] condition precedent.”).

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Here, Franklin Mills asserts that because ratification of the Settlement Agreement was a
condition precedent to the Settlement Agreement’s legal effect, it retained the right to reject the
Property “irrespective of any ‘criteria’ or ‘limitations’ related to the inspection . . . .” (Def.’s
Summ. J. Mot. 30.) Even though the record supports the assertion that Franklin Mills retained an
absolute right to reject the Settlement Agreement, it was not free to reject portions of the
Agreement that it found undesirable while retaining those that it favored. As we discussed in our
September 23, 2014 Memorandum and Order, there is evidence that the parties entered into a
unitary Settlement Agreement. 1 Even if the contract is severable so that the parties may avoid a
total breach, there is sufficient evidence to conclude that it was contemplated as a single and total
arrangement to “resolve[] the litigation for a total sum of $1,450,00.00.” (May 31, 2012 Hr’g Tr.
3:25.) Therefore, Franklin Mills must have rejected the Agreement in its entirety to contend that
it had an absolute right to reject the Property transfer. Its behavior suggests otherwise.
Upon receiving an email from Nationwide’s counsel asking whether “Mr. Simon and the
lenders approved the settlement,” (June 5, 2012 (2:49 PM) Scheuritzel email), Franklin Mills’
counsel responded by requesting a “current Phase 1” for the Property, among other
documentation, with a reminder that payment of the $636,000 was to be delivered the next day
(June 7, 2012 (2:20 PM) Kagan email). In addition, Franklin Mills readily admits that it
“accepted and deposited the payment of $636,000 . . . and it dismissed the Prior Litigation.”
(Def.’s Br. Opp. Summ. J. Mot. 18.) There is a reasonable factual basis upon which to conclude
that such conduct manifests approval and ratification of the Settlement Agreement. See
1

We determined “that neither the Complaint nor the transcript of the proceedings before
Judge Restrepo suggests two independent contracts or that Franklin Mills would only consider
taking title to the Property.” Nationwide Life Ins. Co. v. Franklin Mills Associates Ltd. P’ship,
No. 13-0038, 2014 WL 4722623, at *6 (E.D. Pa. Sept. 23, 2014). We reasoned that a promise
merely to consider something would likely be illusory and unenforceable. Id. at n.3.
15

McGaffic v. City of New Castle, 973 A.2d 1047, 1057 (Pa. Commw. Ct. 2009); Crawford’s Auto
Ctr., Inc. v. Com., Pa. State Police, 655 A.2d 1064, 1067 (Pa. Commw. Ct. 1995) (“A promise
may be stated in words either oral or written or may be inferred wholly or partly from conduct.”)
(emphasis in original). Therefore, Franklin Mills cannot meet its burden by asserting that
through its right to ratify the entire Settlement Agreement, it had a right to reject just the
Property portion of the Agreement irrespective of any contractual “criteria” or “limitations.”
3.

Title Transfer Limitations

Having determined that there is evidence to support the conclusion that the purpose of the
statute of frauds has been satisfied and that Franklin Mills ratified the contract when it deposited
the $636,000 payment from Nationwide and dismissed its prior suit, we now address whether
Franklin Mills breached the contract by failing to take legal title to the Property. To state a claim
for breach of contract under Pennsylvania law, Nationwide must establish: “(1) the existence of
a contract, including its essential terms, (2) a breach of a duty imposed by the contract[,] and
(3) resultant damages.” Ware v. Rodale Press, Inc., 322 F.3d 218, 225 (3d Cir. 2003) (quoting
CoreStates Bank, N.A. v. Cutillo, 723 A.2d 1053, 1058 (Pa. Super. Ct. 1999) (internal quotation
marks omitted, alteration in original)). Settlement agreements, like all contracts, require that
“the minds of the parties should meet upon all of the terms, as well as the subject-matter.”
Mazzella v. Koken, 739 A.2d 531, 536 (Pa. 1999) (citations omitted). “If all of the material
terms of a bargain are agreed upon, the settlement will be enforced; however, if there are
ambiguities and undetermined matters which render the agreement impossible to enforce, the
agreement will be set aside.” Riviello v. First Nat. Cmty. Bank, No. 10-2347, 2013 WL 1348259,
at *1 (M.D. Pa. Apr. 3, 2013). Where an agreement to settle a lawsuit is voluntary and
unambiguous, it is binding upon the parties and they “consent to the exercise of the court’s
16

power to compel compliance.” Cooper-Jarrett, Inc. v. Cent. Transp., Inc., 726 F.2d 93, 96 (3d
Cir. 1984) (citation omitted).
Nationwide argues that the parties agreed to settle the instant matter under the terms of
the Settlement Agreement. It asserts that an agreed upon condition was that “Franklin Mills was
not permitted to reject the Property unless an inspection revealed structural damage to the
building.” (Pl.’s Summ. J. Mot. 13.) In addition, it contends that damage to the Property caused
by water infiltration through the roof membrane was explicitly excluded as a basis upon which to
reject the Property. (Id. at 4.) As evidence for this claim, Nationwide first points to Kagan’s
statements before Judge Restrepo discussing the conditions under which the Property was to
transfer. Nationwide asserts that we should infer that the parties had come to an agreement as to
the Property transfer limitations because Franklin Mills had agreed to take ownership of the
Property “subject to a couple of conditions” with “some language setting forth the criteria” to be
worked out later. (Hr’g Tr. 4:7-10.) Given the reference to limitations, and that only “language”
needed to be worked out between the parties, it is reasonable to infer that there was some
meeting of the minds as to Franklin Mills’ obligation to take title to the Property. The explicit
requirements of those limitations, however, remain a central point of contention.
In an attempt to resolve the ambiguity as to the limitation terms, Nationwide presents an
attachment to an email purporting to offer a written draft of the oral Settlement Agreement. The
writing explicitly states that “Franklin Mills agrees to accept transfer of the Property unless
structural repairs are required and necessary to render such improvements suitable for occupation
and such repairs will cost more than $1,000,000 to implement. . . .” (June 7 Proposed Written
Agreement 3.) It contends that even if the Structural Inspection Limitation was not agreed upon
during the Settlement Conference, Franklin Mills accepted the term in the written draft as a
17

modification when it deposited the $636,000 check into a business account instead of placing it
into escrow. (Pl.’s Summ. J. Mot. 16.)
Even if we were to accept Nationwide’s argument and conclude that the parties agreed to
the Structural Inspection Limitation, we cannot also conclude that it was the only limitation. The
record before us offers evidence to support a reasonable conclusion that environmental
contamination provided another limitation for which the Property transfer could be avoided by
Franklin Mills. In response to the June 5, 2012 (2:49 PM) email from Scheuritzel asking if the
principals had ratified the Settlement Agreement, Franklin Mills’ counsel responded, “Paul—we
need a current Phase 1.” In addition, counsel for Franklin Mills represented that the reason his
client was not “prepared to proceed with the contemplated property transaction” was
“significantly [related to], but not limited to, the presence of mold.” (July 24, 2012 Kagan
email.) Even Nationwide’s counsel asserted that the Property was to be taken “on an ‘As Is
Where Is’ basis provided that it was both structurally sound and free of environmental
contamination . . . .” (Sept. 10, 2012 Scheuritzel letter) (emphasis added).
Nationwide would have us believe that the Property inspector only suspected evidence of
mold in the building. (See Pl.’s Br. Resp. Def.’s Summ. J. Mot. 8.) However, the inspector
conducting the Phase I assessment concluded that “[b]ased upon the amount of fungal growth
observed, AEI recommends a certified mold remediation contractor be consulted to conduct
removal of . . . visible mold within the affected areas.” (Phase I at ii-iii.) Without evidence to
the contrary, it is reasonable to conclude that the presence of the “suspect mold” found during
the inspection could serve as a basis upon which Franklin Mills might avoid taking title to the
property, because it presented a serious concern of environmental contamination. Accordingly,
we cannot conclude at this juncture that there is no issue of material fact as to whether Franklin
18

Mills breached the terms of the Settlement Agreement when it refused to take title to the
Property upon inspection. 2
Conversely, Franklin Mills asserts that the Structural Limitation term cannot be enforced
because Nationwide cannot prove the term “‘beyond a doubt.’” (Def.’s Summ J. Mot. 19-20
(citing Kurland v. Stolker, 533 A.2d 1370, 1373 (Pa. 1987) (emphasis in original)). Franklin
Mills relies on the cases of Kurland and Firetree to argue that Nationwide cannot enforce the
Property transfer provision of the Settlement Agreement unless it meets this heavy burden.
Franklin Mills’ reliance on Kurland and Firetree is misplaced. Both cases stand for the
proposition that a plaintiff has a high burden in overcoming a statute of frauds defense when
attempting to enforce an oral agreement to transfer title to property. See Kurland, 533 A.2d at
1374 (“We ask ourselves, did [the plaintiff] overcome [presumptions in favor of the defendant]
by such ‘indubitable proof,’ proof which is beyond a doubt, as is required to set aside the statute
[of frauds]?”; see also Firetree, 978 A.2d at 1075 (“[W]here a plaintiff seeks to take an oral
contract for real estate out of the statute [of frauds], the plaintiff's evidence must be ‘complete’
and satisfy numerous elements.” (citation omitted)).
We have determined that there is a factual basis upon which to conclude that the purpose
of the statute of frauds has been satisfied with regard to the Property agreement. Therefore,
2

Franklin Mills’ assertion that Nationwide should be precluded from using deposition
testimony regarding the Settlement Conference for violating the state and federal mediation
privilege is without merit. See, e.g., Bank of Am. Nat. Trust & Sav. Ass’n v. Hotel Rittenhouse
Assocs., 800 F.2d 339, 345 (3d Cir. 1986) (“Having undertaken to utilize the judicial process to
interpret the settlement and to enforce it, the parties are no longer entitled to invoke the
confidentiality ordinarily accorded settlement agreements.”); Aetna, Inc. v. Lexington Ins. Co.,
76 Pa. D. & C. 4th 19 (Pa. Ct. Com. Pl. 2005) (applying the reasoning of Bank of America
National Trust & Savings Association in finding that “the confidentiality of the mediation
process, as set out in 42 Pa.C.S.A. § 5949,” is not violated when courts “consider
communications related to [] mediation in order to ascertain the parties’ intent with regard to [a]
Settlement Agreement”).
19

Nationwide need not prove the existence of the terms of the agreement “beyond a doubt.”
Nationwide has produced sufficient evidence to create a triable issue of fact as to whether the
Structural Inspection Limitation was a material term to the Settlement Agreement. 3
Accordingly, the summary judgment motions of Franklin Mills and Nationwide as to Count One
of the Complaint will be denied.
B.

Nationwide’s Specific Performance Claim

Nationwide and Franklin Mills move for summary judgment on Nationwide’s claim for
specific performance of the Settlement Agreement. Specific performance is an equitable remedy
for breach of contract, not an independent cause of action. We therefore construe Nationwide’s
specific performance claim as a request for equitable relief on the breach of contract claim in
Count One of the Complaint. See McHolme/Waynesburg, LLC v. Wal-Mart Real Estate Bus.
Trust, No. 08-961, 2009 WL 1292808, at *3 (W.D. Pa. May 7, 2009) (construing count for
specific performance as request for equitable remedy for breach of contract); accord Benihana of
Tokoyo, Inc. v. Benihana, Inc., 828 F. Supp. 2d 720, 727 (D. Del. 2011) (“Specific performance
is a remedy sought for breach of contract, and not a cause of action in and of itself.”). Franklin
Mills argues that Nationwide is barred from seeking specific performance because it is not an

3

If at trial Nationwide is able to prove that there was an enforceable agreement between
the parties to transfer title to the Property, the burden will shift to Franklin Mills to establish an
exclusion to its contractual obligation. See, e.g., Sabella v. Appalachian Dev. Corp., 103 A.3d
83, 93 (Pa. 2014) (“A defendant asserting an affirmative defense has the burden of proof as to
that affirmative defense.”); see also Wilbert v. Pittsburgh Consolidation Coal Co., 122 A.2d 406,
408 (Pa. 1956) (“Ordinarily, one who asserts an affirmative defense has the burden of proving
it.”) Franklin Mills questions why, if it was such an important term, Nationwide did not place
the Structural Inspection Limitation on the record. (Def.’s Summ. J. Mot. 20.) One could also
ask, why, if Franklin Mills wanted to maintain rejection rights to the Property once the
Settlement Agreement had been ratified, it did not feel it important enough to place such rights
on the record? Franklin Mills has not answered that question.

20

available remedy for breach of an oral contract to convey property. We disagree.
Franklin Mills relies on Firetree, 978 A.2d 1067 (Pa. Commw. Ct. 2009) and Polka v.
May, 118 A.2d 154 (Pa. 1955), in support of the proposition that “[e]ven if Nationwide avoids
the Statute of Frauds, it cannot compel specific performance.” (Def.’s Summ. J. Mot. 19.)
Franklin Mills’ reliance is misplaced. Both Firetree and Polka stand for the proposition that
specific performance is not an available remedy when a contract for the sale of property is
unenforceable under the statute of frauds. Firetree, 978 A.2d at 1076 (“To award [specific
performance] to [the plaintiff] would be tantamount to giving it the benefit of a contract that is
unenforceable under the Statute of Frauds.”); Polka 118 A.2d at 156 (“[A] decree of specific
performance against the [defendant]” cannot be granted “on the ground of estoppel, since the
principle of estoppel may not be invoked against the operation of the statute of frauds.”).
Where, as here, there is a basis upon which to take the oral contract for the sale of
property out of the purview of the statute of frauds, specific performance of that contract may be
granted. See Partrick & Wilkins Co. v. Adams, 369 A.2d 1195, 1199 (Pa. 1977) (holding that an
oral modification to a contract transferring real property can be enforced and specific
performance granted when “the mischief the statute of frauds was enacted to guard against
becomes in that case nonexistent”); see also Lehner v. Montgomery, 119 A.2d 626, 628 (Pa.
1956) (reasoning that an oral contract for property can be specifically enforced where “there is
little likelihood that the owner is being made the victim of a fraud to obtain his land”).
Therefore, both Nationwide’s and Franklin Mills’ motions for summary judgment on Count Two
of the Complaint will be denied.

21

C.

Nationwide’s Equitable Estoppel Claim

Nationwide and Franklin Mills move for summary judgment on Nationwide’s equitable
estoppel claim. “A doctrine sounding in equity, equitable estoppel recognizes that an informal
promise implied by one’s words, deeds or representations which leads another to rely justifiably
thereon to his own injury or detriment, may be enforced in equity.” Novelty Knitting Mills, Inc.
v. Siskind, 457 A.2d 502, 503 (Pa. 1983). It “applies to prevent a party from assuming a position
or asserting a right to another’s disadvantage inconsistent with a position previously taken.”
Blofsen v. Cutaiar, 333 A.2d 841, 843 (Pa. 1975). “Under Pennsylvania law, equitable estoppel
consists of three elements: ‘1) misleading words, conduct, or silence by the party against whom
the estoppel is asserted; 2) unambiguous proof of reasonable reliance upon the misrepresentation
by the party asserting estoppel; and 3) the lack of a duty to inquire on the party asserting the
estoppel.’” Wayne Moving & Storage of New Jersey, Inc. v. Sch. Dist. of Phila., 625 F.3d 148,
155 (3d Cir. 2010) (quoting Chester Extended Care Ctr. v. Pa. Dep’t of Pub. Welfare, 586 A.2d
379, 382 (Pa. 1991)). The party seeking to enforce an oral contract under a theory of equitable
estoppel “has the burden of establishing estoppel by clear, precise and unequivocal evidence.”
Thatcher’s Drug Store of W. Goshen, Inc. v. Consol. Supermarkets, Inc., 636 A.2d 156, 163 (Pa.
1994).
Nationwide argues that judgment should be entered in its favor, even if a contract had not
been formed during the Settlement Conference or when it paid partial Settlement, because
Franklin Mills is estopped from denying its obligation to accept title to the Property. Nationwide
contends that Franklin Mills induced it to submit a check to its counsel for $636,000 while
remaining silent about the potential disagreement over the inspection limitations found in the
Proposed Written Agreement. (Compl. ¶¶ 18-21.) It further contends that Franklin Mills
22

deposited the check despite instructions not to do so if there was disagreement between the
parties, and despite instructions to place the check into an escrow account until a written
Settlement Agreement was executed. (Id. ¶ 25.) Nationwide argues that because Franklin Mills
encouraged payment and did not return the $636,000 check or place it into escrow, it manifested
assent to the terms set forth in the Settlement Agreement. Nationwide argues that “[i]f Franklin
Mills disagreed with the terms set forth in the Settlement Agreement, it should have said so.”
(Pl.’s Mot. at 21.)
We do not disagree that Franklin Mills continued to manifest assent to the Settlement
Agreement when it deposited the $636,000 check. In addition, its failure to propose an
alternative settlement draft outlining the specific limitations to the Property transaction by the
June 10, 2012 deadline is problematic. It would have been prudent for Franklin Mills to place
the funds into an escrow account, as Nationwide requested, until the parties had reached a
mutually agreed upon writing setting forth the specific terms of the Settlement Agreement.
However, Franklin Mills was under no contractual obligation to place the funds in escrow.
Furthermore, the evidence presented thus far does not unequivocally establish that Franklin Mills
misled Nationwide into believing that it had adopted either of its proposed written agreements.
To the contrary, Franklin Mills presents facts to support the proposition that it rejected the
proposed written offer, and merely required payment to begin performance of one of its
contractual obligations, dismissing the Assessment Action against Nationwide. (See June 11,
2012 Kagan email (“[T]he contemplated transaction transferring the property from Nationwide
to Franklin Mills should not be included in a settlement document resolving the lawsuit. That is
a separate item.”).) In fact, the day the check was delivered, Nationwide’s counsel stated, “I will
hand deliver the check to you this afternoon based upon the settlement we put on the record and
23

then we can resolve the other outstanding issues soon.” (June 11, 2012, 11:51AM, Scheuritzel
email (emphasis added.)) Such a statement does not necessarily lead to a conclusion that
Nationwide was misled into believing that Franklin Mills had fully adopted one of its Proposed
Written Agreements.
What Nationwide fails to address is the reasonable presumption that Franklin Mills could
avoid taking title to the Property under the oral Settlement Agreement for reasons other than
structural defects found upon inspection. Even though there is no mention of it in the June 11
Proposed Written Agreement, subsequent correspondences sent by both counsel for Nationwide
and Franklin Mills allude to a right to reject the Property if “environmental contamination” was
found. (July 24, 2012 Kagan email; Sept. 10, 2012 Scheuritzel letter.) As discussed above, the
presence of mold may have formed a reasonable basis upon which Franklin Mills failed to take
title to the Property. Although some of its actions may be deemed suspect, we cannot currently
conclude that Franklin Mills misled Nationwide into believing that it would take title to the
Property without condition, absent structural defects in excess of $1,000,000. Therefore, we
need not address the remaining elements of Nationwide’s equitable estoppel claim and summary
judgment will be denied. 4

4

In opposition to Nationwide’s Motion for Summary Judgment on its equitable estoppel
claim, Franklin Mills asserts that Nationwide cannot establish causation because it did not move
to modify or vacate this court’s dismissal order in the previous action. (Def.’s Br. Opp. Summ.
J. 25.) Franklin Mills suggests that because Nationwide did not file a motion for relief within
ninety days of the order dismissing the Assessment Litigation, pursuant to Local Rule of Civil
Procedure 41.1(b), it is not entitled to relief. Even though this court would lack jurisdiction to
entertain a motion in the previous Assessment action to enforce the Settlement Agreement, we
are not asked to do so here. Nationwide has filed its current motion in a separate suit pursuant to
28 U.S.C. § 1332. Therefore, Nationwide is not precluded from seeking specific performance of
the Settlement Agreement or any damages resulting from its breach. See State Farm Mut. Auto.
Ins. Co. v. Makris, No. 01-5351, 2003 WL 22533696, at *2 (E.D. Pa. Oct. 21, 2003) (applying
Local Rule 41.1(b) in holding that “the proper vehicle” to enforce a settlement agreement is by
filing a “fresh suit”); see also Kokkonen v. Guardian Life Ins. Co. of Am., 511 U.S. 375, 382,
24

Franklin Mills asserts that Nationwide’s equitable estoppel claim is precluded by the
statute of frauds. (Def.’s Summ. J. Mot. 18.) Having determined that the purpose of the statute
of frauds has been satisfied, we need not address this issue further. Franklin Mills’ summary
judgment motion as to Count Two of the Complaint will be denied.
D.

Franklin Mills’ Counterclaims

Nationwide contends that it is entitled to summary judgment on Franklin Mills’
counterclaims. (See Pl.’s Summ. J. Mot. 26.) The counterclaims allege that Nationwide has
breached its obligation to pay assessments (Count One) and its obligation to maintain the
Property (Count Two).
Nationwide’s putative ownership of the Property is the source of its obligations to
Franklin Mills. However, the Complaint and Plaintiff’s Answer and Affirmative Defenses to
Counterclaim allege that but for Franklin Mills’ breach of the Settlement Agreement, Nationwide
would not have owned the property during the period for which Franklin Mills claims it is owed
assessment fees. Nationwide restates this argument in its current Motion. (Pl.’s Summ. J. Mot.
26.) Nationwide further contends that even if Franklin Mills is not obligated to accept
conveyance of the Property, it cannot continue to levy promotional and maintenance assessment
fees against Nationwide because it has fully satisfied all past, present, and future liabilities to
Franklin Mills. (Id. at 19.) In resolving this issue Nationwide requests that we:
(i) enter judgment in favor of Nationwide in an amount equal to potential
Assessments owed plus future taxes, maintenance and utility payments and (ii)
enter judgment in favor of Nationwide declaring that the Assessments, restrictions
and other covenants and conditions found in the Declaration and Supplemental
Agreement no longer apply to the Property, apply to Nationwide or run with the
land.

(1994) (“[E]nforcement of [a] settlement agreement is for state courts, unless there is some
independent basis for federal jurisdiction.”).
25

(Id. at 27.)
To hold that Nationwide’s $636,000 payment to Franklin Mills constitutes an accord and
satisfaction of all past, present, and future assessment liability associated with the Property, we
would first have to divide the Settlement Agreement into two distinct parts. Where there is no
express language compelling contract terms to be indivisible, “a court may look to the conduct of
the parties and the character of the consideration to determine severability.” Raab v. Lander, 427
F. App’x 182, 185 (3d Cir. 2011). Under Pennsylvania law, if the contractual consideration “is
apportioned, either expressly or by necessary implication the contract will generally be held to be
severable.” Heilwood Fuel Co. v. Manor Real Estate Co., 175 A.2d 880, 885 (Pa. 1961) (citation
omitted). Although the record supports a presumption that a unitary contract was formed during
the Settlement Conference, Nationwide’s $1,450,000.00 obligation was broken down into two
distinct payments, one in which “$636,000 [was] to be paid to [Franklin Mills] on or before June
10th, 2012,” and “[t]he remaining $814,000 [to] be paid at the closing of [the Property]
transaction.” (May 31, 2012 Hr’g Tr. 3:26-27.) We will, therefore, consider Nationwide’s
accord and satisfaction claim. 5
“The elements of accord and satisfaction are: (1) a disputed debt (2) a clear and
5

In our September 23, 2014 Memorandum and Order, we did not adopt Franklin Mills’
assertion that the Settlement Agreement was a guise for what in fact were two distinct
agreements—the first agreement being that Nationwide would pay $636,000 to Franklin Mills to
settle the previous action between the parties and the second being the agreement “‘that Franklin
Mills would consider taking title to the Property subject to an inspection and corporate and
lender approvals.’” Nationwide, 2014 WL 4722623, at *5. Here, we are severing the unitary
agreement to make a determination as to whether Nationwide has sufficiently performed its
duties under the Settlement Agreement to satisfy all past, present, and future Property assessment
claims. “The primary objective when interpreting a contract is to ascertain and give effect to the
intent of the parties.” In re Wolfe, 378 B.R. 96, 102 (Bankr. W.D. Pa. 2007) (citing Murphy v.
Duquesne University, 777 A.2d 418, 429 (Pa. 2001)). If, by paying the $636,000 Nationwide has
satisfied its past, present, and future assessment liabilities, the primary objective of the
Settlement Agreement will have been served.
26

unequivocal offer of payment in full satisfaction and (3) acceptance and retention of payment by
the offeree.” Fleming v. CNA Ins. Co., 52 F. Supp. 2d 499, 502 (E.D. Pa. 1999) (citations
omitted). We do not doubt that there was a disputed debt. However, we cannot conclude based
upon the evidence that the $636,000 payment made to Franklin Mills was an “unequivocal offer”
made in full satisfaction of all promotional and maintenance assessment fees against Nationwide.
Although Nationwide sent the $636,000 payment accompanied by the draft written proposal
stating that the payment was in “full and complete satisfaction of all past, present and future
liabilities for Assessments . . . ” (June 11 Proposed Written Agreement at 2), the letter
accompanying the check written by Nationwide’s counsel asserts that the $636,000 “represents
an accord and satisfaction regarding all outstanding amounts claimed by Franklin Mills in the []
litigation” (June 11, 2012 Scheuritzel Letter (emphasis added)). The factual issue as to what the
payment was in satisfaction of has not been made indisputably clear. A reasonable fact finder
could determine that, based on the June 11 letter, the $636,000 payment was in satisfaction of
only those liabilities that were the source of previous litigation, not all future assessment
liabilities.
Furthermore, if one were to conclude that the $636,000 payment was in satisfaction of all
past, present, and future assessment liabilities, the utility of the Property transfer under the
Settlement Agreement would be questionable as to both parties. A contract interpretation that
may nullify a material provision of the Settlement Agreement is not favored. See Int’l Org.
Master, Mates & Pilots of Am., Local No. 2 v. Int’l Org. Masters, Mates & Pilots of Am., Inc.,
439 A.2d 621, 624 (Pa. 1981) (“In construing a contract the intention of the parties must be
ascertained from the entire instrument and each and every part of it must be taken into
consideration and given effect if reasonably possible.”) citations omitted)); see also Cerceo v. De
27

Marco, 137 A.2d 296, 298 (Pa. 1958) (“An interpretation will not be given to one part of a
contract which will annul another part of it.”) internal quotation marks ant citation omitted)).
Only after the factual dispute over Franklin Mills’ right to reject the Property is resolved
can we determine the rights and duties of the parties. We therefore conclude that Nationwide’s
request for summary judgment on Franklin Mills’ counterclaims must be denied.
IV.

CONCLUSION
Clearly there are genuine issues of material fact with regard to the claims being made

here by Nationwide and by Franklin Mills. Accordingly, the Motions for Summary Judgment
filed by both Nationwide and Franklin Mills will be denied. 6
An appropriate Order will follow.

BY THE COURT:

______________________________
R. BARCLAY SURRICK, J.

6

Having determined that summary judgment is not warranted on any of Nationwide’s or
Franklin Mills’ claims, we need not reach questions of remedies raised by Nationwide in its
present Motion. (See Pl.’s Summ. J. Mot. 23-25.)
28