E.S. Management v. Yingkai Gao
176 A.3d 859
Pa. Super. Ct.2017Background
- Four Chinese students (and an aunt who wired funds) attempted to rent an apartment from E.S. Management for the 2014–15 school year; $5,885 was wired (including $100 application fee and $5,785 deposit).
- Two days after the deposit, the students declined to rent due to disagreement over utility charges; E.S. Management refused to refund the deposit.
- Competing actions were filed in magisterial court (Aunt v. E.S. Management; E.S. Management v. Students/Aunt); magistrate ruled for E.S. Management, appeals followed, and cases were consolidated and arbitrated.
- A jury trial found no contract and rejected promissory-estoppel damages, but upon polling the jury indicated they would award the $5,785 deposit to Aunt and students. A bench trial then addressed statutory claims under the Landlord and Tenant Act (LTA) and the Unfair Trade Practices and Consumer Protection Law (UTPCPL).
- Trial court held E.S. Management violated the LTA by collecting a security deposit in excess of two months’ rent and found several deceptive practices under the UTPCPL (including short lease-review period and failure to disclose potential forfeiture); it awarded treble damages and costs.
- Superior Court affirmed in part (LTA/UTPCPL findings and treble damages) and reversed in part (UTPCPL claim as to Aunt personally because she had no lease/purchase relationship).
Issues
| Issue | Aunt/Students' Argument | E.S. Management's Argument | Held |
|---|---|---|---|
| Whether UTPCPL applies where there was no executed lease | UTPCPL applies because deceptive conduct occurred in connection with a potential lease/purchase | UTPCPL inapplicable; issue was raised only post-trial | Waived on appeal (E.S. Management failed to object at trial) |
| Whether collecting $5,785 violated LTA §250.511a (security deposit limit) and thus the UTPCPL | Deposit exceeded two months’ rent and thus violated LTA; deceptive conduct invoked UTPCPL | Last month's rent was a prepayment, not security for default | Court: Deposit violated LTA; last month's rent functioned as security and E.S. Management violated UTPCPL under the circumstances |
| Whether giving only two days to review a complex lease violated the UTPCPL | Two-day review for overseas students was deceptive and likely to cause confusion | Two days was sufficient | Court: Two-day review for lengthy lease (and advising to consult counsel) was deceptive and violated UTPCPL |
| Whether Aunt (payer/agent) can recover under UTPCPL for E.S. Management’s claim that she owed year’s rent/utilities | Aunt suffered loss from deceptive practices and may recover | Aunt had no contractual relationship and thus is not a purchaser/lessee under UTPCPL | Reversed as to Aunt: she did not ‘‘purchase or lease’’ goods/services and cannot bring a private UTPCPL action |
Key Cases Cited
- Keffer v. Bob Nolan’s Auto Serv., Inc., 59 A.3d 621 (Pa. Super. 2012) (post-trial motions cannot raise new theories not presented at trial)
- Straub v. Cherne Indus., 880 A.2d 561 (Pa. 2005) (Pa.R.C.P. 227.1 bars post-trial grounds not raised at trial)
- Schwartz v. Rockey, 932 A.2d 885 (Pa. 2007) (standard for treble damages under UTPCPL; focus on intentional or reckless conduct)
- Commonwealth v. Coleman, 19 A.3d 1111 (Pa. Super. 2011) (issues raised first in Rule 1925(b) are waived)
- Umbelina v. Adams, 34 A.3d 151 (Pa. Super. 2011) (appellate briefs that fail to develop arguments with authority may be deemed waived)