Update: Gist of the Action & Motion For Summary Judgment Based on Hearsay

In a recent non-precedential decision, the Pennsylvania Superior Court revisited two issues that often arise in civil litigation in Pennsylvania: first, when hearsay evidence may nonetheless be considered in opposition to summary judgment, and second, when a plaintiff’s tort claim is barred because the alleged wrongdoing is fundamentally contractual in nature.  

In 2019 E. Boston St., LLC v. Viking Mill Associates, LLC, No. 1225 EDA 2025 (Pa. Super. filed May 15, 2026), the Superior Court affirmed summary judgment against a commercial real estate purchaser that alleged both breach of contract and fraudulent misrepresentation arising out of inaccurate lease information provided during a property sale. Although the court ultimately ruled against the plaintiff, the decision provides a practical reminder concerning PA law: 

1. 1. 1. A party opposing a motion for summary judgment may rely on hearsay so long as they “can provide a plausible avenue for the admission at trial of the hearsay,” see Rule 1035.2,  and 
      2. “Where fraud claims are intertwined with breach of contract claims and the duties allegedly breached are created and grounded in the contract itself, the gist of the action is breach of contract.” Labeling conduct as “fraudulent” will not automatically transform a contract dispute into a viable tort claim.

The Underlying Real Estate Dispute

The dispute arose from the sale of a commercial property in Philadelphia containing both a North building and a South building occupied by multiple tenants. The purchaser, 2019 E. Boston St., LLC, intended to redevelop the property after the tenants vacated.

Under the parties’ Purchase and Sale Agreement (“PSA”), the seller, Viking Mill Associates, LLC, was required to provide an accurate “rent roll” prior to closing. The rent roll identified the tenants, the terms of their leases, and the notice periods required to terminate those leases.

The central problem was that one major tenant — Urban Axes, an axe-throwing business located in the South building — had previously negotiated a lease modification changing its termination notice requirement from 30 days to 90 days. The seller did not accurately disclose that modification in the rent roll delivered at closing.

The Superior Court noted that the inaccuracy was undisputed, explaining that:   

“There is no dispute that a contract existed and that Appellee breached it in failing to provide an accurate rent roll.”

The purchaser claimed the inaccurate rent roll caused substantial project delays, increased financing costs, construction losses, and lost business opportunities because demolition could not begin when expected.

The evidence showed, however, that the situation became substantially more complicated after closing. Multiple tenants resisted vacating the premises, and many tenants who only had month-to-month leases nevertheless demanded treatment similar to tenants possessing actual 90-day termination rights. More than twenty-six tenants ultimately held over beyond their lease expiration dates.

Importantly, the record also established that the purchaser voluntarily extended many tenants’ occupancy periods in an effort to reduce tension and negative publicity.  The Superior Court noted: 

“‘In order to recover for damages pursuant to a breach of contract, the plaintiff must show a causal connection between the breach and the loss.’ Logan v. Mirror Printing Co. of Altoona, Pa., 600 A.2d 225, 226 (Pa. 1991).”

The Superior Court ultimately concluded that the plaintiff could not establish the required causal connection between the inaccurate rent roll and the damages allegedly suffered.

Hearsay at the Summary Judgment Stage

One of the most significant portions of the opinion concerns the court’s discussion of hearsay evidence in summary judgment proceedings.

Pennsylvania litigators frequently encounter arguments that certain deposition testimony, statements from third parties, or other out-of-court statements cannot be considered because they constitute hearsay. The Superior Court reiterated that Pennsylvania’s summary judgment rules are more flexible than many lawyers assume.

The court stated:

“The Pennsylvania Rules of Civil Procedure allow a non-movant to use certain hearsay evidence in opposition to a motion for summary judgment.”

The court relied specifically on Petrina v. Allied Glove Corp., 46 A.3d 795, 799 (Pa. Super. 2012), together with Pennsylvania Rules of Civil Procedure 1035.1 and 1035.3.

The Superior Court further explained:

“A trial court should consider purported hearsay presented by a nonmovant at the summary judgment stage as long as the non-movant can provide a plausible avenue for the admission at trial of the hearsay.”

In practical terms, the court recognized that evidence need not already be independently admissible in its current form so long as the non-moving party can demonstrate a realistic path to admissibility at trial. Here, the plaintiff relied upon deposition testimony describing complaints and statements made by tenants during disputes over the property.  

The Superior Court concluded those statements could be considered because the plaintiff could plausibly call the tenants themselves to testify at trial. The court therefore held:  

“Here, Appellant would plausibly be able to call the tenants to testify at trial, and thus the testimony contained in the depositions of Appellant’s representatives regarding the tenants’ complaints is admissible.”

The opinion therefore reinforces an important distinction under Pennsylvania law: hearsay is not automatically excluded at summary judgment merely because it presently appears in deposition testimony or other out-of-court form.

At the same time, the Superior Court emphasized that a non-moving party still must present actual evidence creating a genuine issue of material fact. The court reiterated:

“The non-moving party may not rest upon averments contained in its pleadings; the non-moving party must demonstrate that there is a genuine issue for trial.”

That language, citing Stidham v. Millvale Sportsmen’s Club, 618 A.2d 945, 950 (Pa. Super. 1992), highlights a recurring litigation problem. Plaintiffs often survive preliminary objections by adequately pleading claims, but summary judgment requires actual evidentiary support rather than allegations alone.

Why the Plaintiff Still Lost Despite the Hearsay Evidence

Even after considering the hearsay testimony, the Superior Court concluded the plaintiff failed to establish causation.

The court reasoned that the construction delays were not actually caused by the inaccurate rent roll concerning Urban Axes. Instead, the record showed that multiple tenants intended to resist leaving regardless of the Urban Axes lease terms, and the plaintiff itself voluntarily extended numerous lease deadlines.

Perhaps most damaging to the plaintiff’s position was the fact that another tenant, Peter Steliga, remained in possession longer than Urban Axes and delayed demolition of the South building even after Urban Axes had vacated.

The court emphasized:

“Accordingly, there is no genuine issue for a jury to decide; even if the rent roll provided by Appellee on August 31, 2022 was accurate, there is no evidence that it would have prevented the tenants from violating their leases.”

The Superior Court further concluded:

“Appellant has not pointed to evidence that Urban Axes’ extended termination period caused other tenants to hold over, nor that Appellee’s failure to disclose that termination period in the rent roll on August 31, 2022 did so.”

The case therefore serves as a reminder that Pennsylvania courts may consider hearsay evidence at summary judgment when there is a plausible path to admissibility, but such evidence still must actually establish the necessary elements of the claim.

The “Gist of the Action” Doctrine and Fraud Claims

The second major issue addressed by the Superior Court involved the plaintiff’s fraudulent misrepresentation claim.

The plaintiff argued that the seller intentionally provided inaccurate lease information and falsely certified the accuracy of the rent roll. The seller responded that the claim was barred by Pennsylvania’s “gist of the action” doctrine because the alleged duty arose entirely from the parties’ contract.

The Superior Court began by restating the governing principle:

“The gist of the action doctrine prohibits a plaintiff from re-casting ordinary breach of contract claims into tort claims.”

The court relied upon B.G. Balmer & Co. v. Frank Crystal & Co., Inc., 148 A.3d 454, 468 (Pa. Super. 2016).

The opinion then quoted extensively from Autochoice Unlimited, Inc. v. Avangard Auto Fin., Inc., 9 A.3d 1207, 1212 (Pa. Super. 2010), explaining:

“Where fraud claims are intertwined with breach of contract claims and the duties allegedly breached are created and grounded in the contract itself, the gist of the action is breach of contract.”

The court further reiterated:

“Thus, claims of fraud in the performance of a contract are generally barred under the gist of the action doctrine.”

This distinction remains one of the most important analytical issues in Pennsylvania commercial litigation.

Pennsylvania courts repeatedly examine whether the allegedly violated duty arises primarily from:

1. those imposed by tort law generally; or
2. obligations created by the parties’ contract.

If the alleged wrongdoing exists only because the parties entered into a contract, the claim ordinarily sounds in contract rather than tort.

The Gist of the Action’s Doctrine Remains Alive in PA 

The Superior Court also discussed the Pennsylvania Supreme Court’s landmark decision in Bruno v. Erie Insurance Co., 106 A.3d 48 (Pa. 2014), together with the recent Superior Court decision in Swatt v. Nottingham Vill., 342 A.3d 23, 52 (Pa. Super. 2025).

The court explained that after Bruno, courts must:

“review each claim individually to determine whether the plaintiff has alleged or offered sufficient proof … that the defendant breached the particular duty (tort or contractual) for each particular claim.”

That language is particularly important because Pennsylvania law does permit a plaintiff to plead “in the alternative” as to include both contract and tort claims simultaneously when the facts legitimately support both theories. See Pa.R.C.P. 1020.  In fact, good practice requires a plaintiff to plead both contract and tort claims at once if, for example, if a defense exists to the formation of the contract. This could put the plaintiff “out of court,” without a companion tort claim. 

But ultimately, the decisive question is whether the alleged duty breached is truly independent of the contract itself.     

Here, the Superior Court concluded the allegedly false rent roll and certifications arose directly from contractual obligations established by the PSA​, warranting the dismissal of the tort claim.