HARRISBURG — Real estate developer Pulte Homes of PA LP will be required to pay $20 million awarded to Applecross Club Operations LLC and will not be granted a new trial, according to a ruling issued June 13 by the state Superior Court.
Pulte reached a $6.5 million development and acquisition agreement on March 3, 2009 under which Applecross would acquire and manage a country club being constructed by Pulte. In exchange, anyone who purchased a home in the community being constructed by Pulte in East Brandywine Township and West Brandywine Township in Chester County would be required to purchase a membership in the country club.
After the companies closed on the sale of the country club, the Superior Court opinion says Pulte breached a purchase contract related to a specific tract of land that was to be included in the development after it failed to reach an agreement on the purchase price for the tract.
Applecross subsequently claimed that the elimination of the tract would ultimately cost Applecross more than $3.3 million in lost country club membership revenue. The opinion said Pulte argued that “it believed the loss of the Del Webb tract constituted a material change from the conditions of the amended development and acquisition agreement.”
As a result, Pulte filed the lawsuit that led to the $20 million verdict being awarded in its favor by a jury in the Court of Common Pleas of Chester County.
In its appeal of the jury verdict in Applecross’s favor, Pulte claimed that the “trial court erred in determining that the amended development and acquisition agreement was ambiguous,” according to the Superior Court opinion.
However, as part of its ruling affirming the trial court’s order, the Superior Court said “here, as a matter of logic, it is clear that the reduction in the number of homes that were required to purchase memberships in the country club and golf course caused some damage to Applecross’s business.”
The Superior Court also rejected Pulte’s challenge of the lower court’s refusal to limit the amount of damages Applecross can recover from its breach-of-contract claims and, ultimately, reduced the entire amount awarded by the jury to $500,000.