Gross McGinley Wins “Fiery” Civil Suit

A Lehigh Valley property owner found himself as the Defendant in a civil action after a residential property he owned and leased to a tenant burned down. After the fire, the homeowner collected insurance money, then razed and sold the property. Several years afterward, the former tenant claimed rights to the funds collected from these events, suing the homeowner, notwithstanding the fact that the tenant had terminated the lease shortly before the fire. Read on to learn how Gross McGinley Defense Attorneys Sam Cohen and Bob Campbell successfully represented the homeowner and obtained a dismissal of the case on Summary Judgment before necessitating a trial.

Unjust enrichment and constructive trust Complaints

The tenant’s first claim against the property owner was unjust enrichment. What is unjust enrichment? In simple terms, one party claims unjust enrichment when another party benefits from their relationship without giving them their rightful share from these gains.

The tenant (Plaintiff) and her then-boyfriend entered into a lease with the property owner (Defendant), wherein they could potentially exercise the option to lease-to-own the property after a certain term. In the meantime, the monies paid to the property owner were to be deposited into a trust and would be counted towards the agreed-upon purchase price if the lessees decided to purchase the home after an agreed-upon date; otherwise, the monies paid were simply rent.

After leasing the property for less than a year, the couple dissolved their relationship. The tenant and her boyfriend moved out and emailed the property owner to say her former boyfriend would take over the payments. Shortly thereafter, the home on the property burned down and the boyfriend gave up his rights to the property in writing. Additionally, the property burned down prior to the tenant exercising the option to convert to a lease-to-own arrangement and before the opportunity to even exercise the option had arisen. 

For several reasons, the unjust enrichment claim did not stand:

• The relationship was governed with a lease, as opposed to an absence of an expressed contract
• The lease agreement ended when the home burned down, relieving both parties from the lease; also signaling the end of the lease-to-purchase option and rendering the monies paid to the Defendant as rent to which he was entitled
• The tenant stopped paying rent on the property prior to the fire, so no money was paid to the property owner that wasn’t due him

Secondly, the tenant enacted a constructive trust Complaint, laying claim to a portion of the insurance proceeds. Because this claim relied upon the unjust enrichment Complaint standing and was premised on the tenant having exercised the option to convert to a lease-to-own arrangement (which never occurred), it was also struck down by the Court. Summary Judgment was granted in favor of the property owner Defendant, who was represented by Gross McGinley Defense Attorneys Sam Cohen and Bob Campbell.

The appeal process

Following the entry of Summary Judgment, the tenant opted to appeal the Court’s decision. Once again, Gross McGinley provided civil litigation support to the property owner and was successful in preserving the Trial Court’s favorable decision and having the property owner’s victor affirmed. The tenant’s appeal was based on questions about the lease – whether or not the purchase option survived the fire if the lease-to-own option was actually an agreement of sale, and whether or not all conditions of the contract were voided.

The Pennsylvania Superior Court considered the tenant’s questions on appeal but ultimately determined that the tenant’s new arguments on appeal were outside those that had been raised previously.  And, upon considering the arguments raised by Attorneys Cohen and Campbell in their appellate brief, the Superior Court affirmed the Trial Court’s decision that Summary Judgment was appropriate and the tenant’s claims warranted dismissal.

Attorney Samuel E. Cohen serves as Co-Chair of the Gross McGinley Litigation practice team and focuses his practice on commercial and employment litigation as well as business disputes providing creative, effective, and cost-efficient legal services to individuals, small businesses, large corporations, and municipalities.

If you are in need of a defense attorney, or a plaintiff’s attorney, in a civil suit, please reach out to the Gross McGinley litigation team.