Westmoreland Regional v. Subway Real Estate
Westmoreland Regional v. Subway Real Estate No. 613 WDA 2016
Pa. Super. Ct.Mar 14, 2017Background
- Subway Real Estate Corp. (SREC) leased property from Westmoreland Regional Hospital under a lease (Feb 1, 2005–Jan 31, 2010) that included one five‑year renewal which SREC exercised, extending the term through Jan 31, 2015.
- A December 1, 2009 letter from Hospital purported to amend the lease to provide a second five‑year renewal (Feb 1, 2015–Jan 31, 2020) subject to mutual written agreement and a rent to be determined by fair market value, capped at a 15% increase, and stating any renewal "shall be on the terms and conditions negotiated between the parties."
- SREC claims it returned a countersigned December letter and later (Jan 17, 2014) attempted to exercise the second renewal; Hospital contends the December letter was never signed/returned and therefore no second renewal was formed.
- Hospital filed for possession and damages after the lease term expired; SREC counterclaimed seeking a declaration that it properly exercised the second renewal option.
- The trial court granted Hospital’s motion for judgment on the pleadings, denied SREC’s cross‑motion, and ordered SREC to vacate; SREC appealed.
Issues
| Issue | Plaintiff's Argument (Hospital) | Defendant's Argument (SREC) | Held |
|---|---|---|---|
| Whether the December 2009 letter created a unilateral option in SREC to extend the lease to 2020 | Letter required a mutual written agreement; no mutual agreement was formed | SREC argues the letter (an "option") gave it the right to renew and it exercised that option | Held for Hospital: letter required mutual written agreement; SREC could not unilaterally invoke renewal |
| Whether the parties reached a meeting of the minds on rent for the second renewal | No meeting of the minds on rent because the letter required further negotiation and mutual agreement | SREC: letter itself supplied a rent formula (FMV capped at 15%), so rent term was sufficiently definite | Held for Hospital: rent term required further negotiation; the letter contemplated additional agreement |
| Whether disputed fact (whether SREC returned a signed letter) barred judgment on the pleadings | Hospital acknowledged dispute but argued the disputed fact was not material to ruling | SREC argued the dispute was material and precluded judgment on the pleadings | Held: although the signature dispute existed, it was not material – the mutual‑agreement language controlled |
| Whether the parties orally modified the lease so SREC had an enforceable renewal | Hospital: no evidence of later conduct or agreement that modified the written terms | SREC: alleged oral agreement and that the December letter confirmed that oral modification | Held for Hospital: no persuasive evidence of oral modification; written terms required mutual written agreement |
Key Cases Cited
- Grimes v. Enter. Leasing Co. of Philadelphia, LLC, 105 A.3d 1188 (Pa. 2014) (standard of review and scope for judgment on the pleadings)
- McLafferty v. Council for the Ass'n of Owners of Condo. No. One, Inc., 148 A.3d 802 (Pa. Super. 2016) (accept factual allegations in the pleadings when ruling on judgment on the pleadings)
- Giant Food Stores, LLC v. THF Silver Spring Dev., L.P., 959 A.2d 438 (Pa. Super. 2008) (when contract language is clear, intent is determined from the writing alone)
- Conestoga Bank v. Tioga Investments II, 138 A.3d 652 (Pa. Super. 2016) (appellate court may affirm trial court on any correct basis)
- In re Stevenson, 40 A.3d 1212 (Pa. 2012) (lower federal decisions are persuasive, not binding, on Pennsylvania courts)
- Newman Dev. Grp. of Pottstown, LLC v. Genuardi's Family Mkt., Inc., 98 A.3d 645 (Pa. Super. 2014) (unpublished federal decisions cited have no precedential value in Pennsylvania)