Pennsylvania Record

Friday, November 15, 2019

Court imposes liability on contractor for poorly built home

Lawsuits

By Scott Holland | Oct 31, 2019

Contractor

PHILADELPHIA — A state appeals court has upheld a lower court’s finding that a contractor and his firm are both liable for a poorly built home.

John and Devon Sereda filed a breach of warranty lawsuit against Center City Acquisitions and its owner, Noah Ostroff, concerning the quality of the Philadelphia home the company built for them in 2012. They prevailed in a Philadelphia County Court of Common Pleas bench trial, prompting Ostroff’s appeal to the Superior Court.

Judge Mary Murray wrote the panel’s opinion issued Oct. 11. Judges Gene Strassburger and Dan Pellegrini concurred.

On appeal, Ostroff argued the lower court erred by finding him personally liable and determining the Seredas gave proper notice of water damage under the home’s warranty terms. He also said the court should not have awarded damages under the Pennsylvania Unfair Trade Practices and Consumer Protection Law.

According to the panel, the Seredas both testified at trial that they never spoke to anyone at Center City Acquisitions aside from Ostroff.

“We had his personal cell phone number,” Devon Sereda testified. “It wasn’t like a business number. When we would call, it would say on his voice mail 'Noah Ostroff.'”

The Seredas’ real estate agent also testified, and they submitted expert reports and Ostroff’s deposition testimony. Ostroff did not testify at the trial or otherwise present a defense, according to the panel. The court awarded the couple $136,087 — for flooring, windows, including treble damages plus and litigation costs and legal fees — and branded Center City Acquisitions as “a sham company constituting a façade for Mr. Ostroff’s operations.”

The panel said the trial court was right to find Ostroff personally liable because the record showed he attempted to use the protections of a limited liability corporation and his personal “conduct amounted to malfeasance.”

Murray also wrote Ostroff’s arguments he did not “intentionally mislead the Seredas or intentionally disregard the warranty are meritless, as the catchall provision of the UTPCPL does not require an actor’s intent, as usually contemplated in a fraudulent or negligent misrepresentation claim.”

Although Ostroff insisted the Seredas’ assessment of the costs required to repair their home was speculative, the panel said, Ostroff didn’t present any evidence contradicting those amounts, rendering his claims on appeal meritless.

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