*1 Stephen Kaufman, R. B. 37 Order reversed. Case remanded. David Mulvi relinquished. Jurisdiction hill, Oberdick, Manning David G. J. II, Parrish,
O’Connor M. Debra Adri Roe, Santone, an N. Thomas J. Mark Stadler, Taylor, Jr., C. Richter Charles Watkins, Wettach, B. Thomas C. as individuals, trading doing and busi LLC, TRIZECHAHN GATEWAY McConomy, ness as Titus & a Penn a Delaware limited sylvania general partnership, also company McConomy LLP, known as Titus & v. McConomy, Pennsylva and Titus & a TITUS, McConomy, Paul H. H. James general partnership, nia also known Lindsey Alton, D. Thomas D. Arbo McConomy, as Titus & LLP. gast, Christian, Link I. S. David Co hen, DeWalt, L. Suzanne Donald T. Appeal McConomy of Titus & LLP and
Dulac, Jr., Hagan, Martin J. Thomas McConomy, Pennsylvania Titus & a Hardiman, Henry Johnston, M. III, R. Stephen Kaufman, general partnership, R. Ti David B. Mulvi also known as hill, Oberdick, Manning David G. J. McConomy tus & LLP. II, Parrish,
O’Connor Debra M. Adri Roe, Santone, an N. Thomas J. Mark LLC, Gateway Trizechahn a Delaware Stadler, Taylor, Jr., C. Richter Charles liability company, limited Watkins, Wettach, B. C. Thomas as Appellant individuals, trading doing busi McConomy, ness as Titus & a Penn v. sylvania general partnership, also Titus, McConomy, H. Paul James H. McConomy LLP, known as Titus & Lindsey Alton, D. Thomas D. Arbo Pennsylva McConomy, Titus & gast, Christian, S. Link David I. Co general partnership, nia also known hen, DeWalt, Suzanne L. T. McConomy, as & Donald Titus LLP. Dulac, Jr., Hagan, J. Martin Thomas Appeal Titus, H. of Paul James H. Hardiman, Henry III, Johnston, M. R. McConomy, Lindsey Alton, D. Thomas Kaufman, Stephen R. David B. Mulvi Arbogast, Christian, D. Link S. Martin hill, Oberdick, Manning David G. J. Hagan, Mulvihill, J. David B. David G. II, Parrish, O’Connor Debra M. Adri Oberdick, Manning II, J. O’Connor Roe, Santone, an N. Thomas J. Mark Roe, Adrian N. Mark Stadler and Stadler, Jr., Taylor, C. Richter Charles C. Thomas Wettach. Watkins, Wettach, B. Thomas C. Gateway LLC, Trizechahn a Delaware individuals, trading doing busi liability company limited McConomy, ness as Titus & Penn v. sylvania general partnership, also Titus, McConomy, H. Paul James H. McConomy LLP, known as Titus & Lindsey Alton, D. Thomas D. Arbo McConomy, Pennsylva and Titus & gast, Christian, Link I. S. David Co partnership, nia General also known hen, DeWalt, L. T. Suzanne Donald McConomy, as Titus LLP. & Jr., Dulac, Hagan, Martin J. Thomas Hardiman, Henry Johnston, III, M. R. Superior Court Pennsylvania.
Argued April 2007. July
Filed Sept.
Reargument Denied *4 O’Keefe, R. Pittsburgh,
John for Stadler and O’Connor. Solano, Roe,
Carl A. Philadelphia, *5 Titus, Alton, Christian, Hagan, McCono- Oberdick, Wettach, my, and Arbogast Mul- vihill.
Dianna Wyrick, C. for Parr- Pittsburgh, ish, Hardiman and Kaufman. Witzel, Kenneth J. Pittsburgh, for Wat- kins, Dulac and Johnston. Zangrilli, Albert J. Pittsburgh, Trize- Gateway. chahn MELVIN, BEFORE: ORIE BENDER TAMILIA, and JJ. TAMILIA,
OPINION BY J.: ¶ Appellants, Titus, Paul James H. McConomy, Lindsey Alton, D. Thomas D. Arbogast, Christin, S. Link Martin J. Ha- Mulvihill, gan, David B. David G. Ober- dick, II, Manning J. O’Connor Adrian N. Roe, Stadler, Wettach, Mark Thomas C. McConomy and Titus & LLP Titus & a/k/a McConomy, Pennsylvania general part- nership formerly composed- and law firm others, appeal and from the $3,274,037.79 judgment after entered trial court concluded had breached lease Gateway their with Trizechahn LLC (Trizechahn).1 Dulac, Johnson, DeWalt, Watkins, Hardiman, Parrish, Cross-appellees 1. Kaufman and de- ¶2 parties en- In cross-appeals p. from the 1. June Trizeehahn lease) 16, 2002, (storage Order into second lease trial court’s December tered summary judgment space in favor of in the granting storage for an additional Dulac, Jr., Donald T. and cross-appellees Gateway Id. of Four Center. basement Watkins; the trial Janu- B. court’s Charles lease ran No. 2. The term of this 27, 2003, granting summary ary Order Id. 15, 1998, until June June Henry in favor judgment cross-appellee 1999, T & M decided August In III; January trial court’s R. Johnson wrap its affairs. On up liquidate summary judgment grant of year, Titus August appellant 18th of DeWalt; L. cross-appellee favor of Suzanne general a letter to Trizechahn’s sent 30, 2004, grant- and the trial court’s June im- manager notifying Trizeehahn summary cross-appel- ing offering to work pending dissolution Hardiman, M. Debra M. lees Thomas subletting towards Parrish, Stephen R. Kaufman. List, Exhibit premises. Background Relevant liquidation was plan A formal 1995, a third-party 3 In landlord and Record, No. on that same date. executed (T M) began Titus & LLP McConomy & there- Shortly No. 59. negotiating agreement occupa- a lease after, T & M vacated the master floor, part tion of the entire 20th flies left behind premises, but floor, storage space 21st and basement fix- storage spaces and office basement Center, Gateway Four located down- space. Trial Court tures office Shortly negotia- Pittsburgh. town after J., Friedman, 3/30/05, at 2. Opinion, *6 the began, third-party tions landlord sold abandonment, the master the event Gateway Af- Four Center to Trizeehahn. provided lease as follows: T negotiations, ter further & M and Trize- REMEDIES 15. LANDLORD’S and, chahn an agreement reached subse- quently, ten-year executed the lease (master lease) prin-
agreement that is the (d) the the Prem- If Tenant abandons cipal subject of case.2 The lease term this or the Landlord otherwise becomes ises ran from October until June List, elect, Record, the Landlord entitled so to and 2005. No. Exhibit No. leasing Taylor Notably, director of notice with 2. Trizechahn’s fendants Santone and filed originally this Court under Pa.R.A.P. Parties on was that the master lease testified Appeal, the had no interest in out- by third-party who Four the sold drafted appeal N.T., come the this case. Inasmuch as Gateway Center to Trizeehahn. See true, cross-appellees these and defen- fur- at 387. The director 08/25/-04-08/26/04 longer appeal parties dants are no to the however, testified, law- Trizeehahn ther this case. was yers before it the master lease reviewed infra, Cross-appellees, were all as discussed origi- certain terms the executed and that summary granted the trial court. changed negotiations after nal draft were concluded defendants Thomas The trial court bargained The T & M. Id. 387-388. with Taylor, J. and C. Richter Jr. were not Santone changes lease are evident the master for to subject breaching because liable for the lease See the document. from the face of Partnership" "effectively out of the both were List, importance 1. The Exhibit No. No. executed. Trial Court before the was in our anal- facts will become evident of these 03/30/05, Friedman, J., Opinion, 21. Trize- ysis. challenge trial court’s chahn does the Tay- disposition respect to Santone lor. elects, lease, terminating to pay through January without the rent of 2000 when all Premises, payments endeavor relet rental ceased. Id. Over five may, option years at the remained on the lease term at the Landlord Landlord’s Premises, regard, time of default. In that enter into the mas- remove provided as signs ter follows: Tenant’s and other evidence of tenancy, and possession take and hold REMEDIES LANDLORD’S (c) as in Paragraph thereof of this Sec- provided,
tion entry without such possession terminating or the lease re- (b) If pay- the Tenant defaults Tenant, leasing part, in whole or in ment of Rent and such default continues obligation from the pay Tenant’s (10) notice, days for ten after or defaults Rent the full hereunder for term as and full prompt performance of provided. Upon hereinafter and after any other provision this lease and entry possession into without termi- (30) thirty such default continues for lease, may nation of the the Landlord notice, days after if or the leasehold any relet part the Premises or thereof upon interest of the Tenant be levied any the account of the Tenant under or pro- execution be attached firm person, or than corporation other law, if cess of or the Tenant abandons rent, the Tenant for such time such Premises, any then and in such upon such as the terms Landlord election, may, event the at its Landlord shall determine to be reasonable. either terminate lease and the Ten- case, may such the Landlord make right ant’s possession Premises repairs, alterations and additions in or, lease, without terminating this en- Premises, and redecorate the same Nothing deavor relet Premises. to the extent deemed the Landlord shall herein be construed so as relieve desirable, necessary or and the Tenant Tenant obligation, including shall, demand, upon pay the cost there- Rent, payment provided in this of, together with the Landlord’s ex- lease. penses If reletting. the consider- Record, 1, p. *7 ation upon collected the Landlord ¶ 29, February 2000, On Trizechahn any reletting such for the Tenant’s ac- a sent letter to T M two outlining & termi- not pay monthly count is sufficient to plans it be willing nation into which would the full amount of Rent the reserved T outstanding to enter to settle & M’s lease, together this with the cost of re- lease, obligations the master both under pairs, alterations, additions, redecorat- payments which called for T & M to remit ing expenses, and the the Landlord’s Record, totaling less than million. No. $1 pay Tenant shall the to Landlord 183, List, No. letter Exhibit 15. The also monthly upon each deficiency amount of indicated Trizechahn was intent imme- demand. minimum, diately at recovering,
Record, 187, List, 1, p. 9. No. Exhibit No. portion storage space of the master lease ¶ immediately necessary a building Trizechahn entered into to correct code viola- that, negotiations recovery, with af- said T & respective subtenants tion and after M’s premises. ter T obligation & M abandoned the The rental would be reduced accord- trial & ingly.3 formally court found that T M continued to Id. T M did not & re- 3. purposes clarity, For it must be noted the trial T M was in court found & Record, Corporation. to Copperweld letter.4 lease spond this List, 187, Copperweld No. 8. No. Exhibit ¶ 14, 2000, July 7 On Trizechahn sent of the 21st floor possession did not take T notifying M another letter & and, 1, 2003, however, until March space, attempting Trizechahn was to relet with the terms of its lease pursuant storage and space requesting master lease Trizechahn, until begin paying not rent did T & M files to remove miscellaneous Cop- at Opinion time. Trial Court 6. in that firm’s space left after the abandon- is,” Trize- space “as and perweld took Record, List, 183, No. ment. No. Exhibit therefore, not, did incur ex- chahn later, re- days appellant 23. Four Titus re-letting portion for penses by readily plied agreeing to remove premises. Id. by requesting permission files and to enter space the 20th remove additional floor ¶ 2003, 17, By January lease dated Record, List, 187, No. files. No. Exhibit space Trizechahn re-let the 20th floor 50. (DMJM). Record, Harris, + Inc. DMJM ¶8 28, 2000, having July allegedly On 187, List, The Exhibit No. 9. term No. yet for payments received rental lease on March commenced July through March Trizechahn six months of the lease term first complaint seeking filed written all sums re-letting 20th being rent free. Id. Record, 1. still due under the lease. No. incurred a space, floor Trizechahn total complaint subsequently The was amended $574,216,965 alterations, repairs, addi- twice to additional and a third parties add tions, redecorating space. Trial and time to re-letting raise claim for Opinion at 7. Court Record, 18, 25, expenses. alteration Nos. ¶ 28, 2004, after trial 12 On June 75. grant- court had a series of Orders issued By August T had & M ing summary judgment cross-appellees storage space pursuant vacated the lease Watkins, Johnson, DeWalt, Dulac, Hardi- to Trizechahn’s decision terminate. Parrish, Kaufmann, man, trial 52. outlining ratio- Opinion court issued an its portion Trizechahn then utilized dismissing parties. Trial nale for these storage space recovered J., Friedman, 6/28/04, 4- Opinion, Court storage space egress to construct an Gateway from the basement of Four Cen- of a new tenant. Trial
ter the benefit 27, 2005, the trial court 13 On June Opinion Court subject appeal. of this entered the Order later, days all of defendants filed A few re- 10 On March Trizechahn *8 seeking, relief joint post-trial for space let the floor under the master motion 21st re-letting premises as storage lease for storage lease the time the default under the February well. the letter. Trizechahn sent storage Opinion The lease Trial Court at 9. in provided Subsequently, all of outlined let- the remedies Trizechahn sent second 4. 30, 2000, notifying & M to Trizechahn T the master lease were available ter dated March storage payments well. respect to the failed to remit rental with had Record, Record, 187, List, 2, Storage February of 2000. No. Exhibit No. for and March 183, Consequently, provi- 16. letter Lease. the master lease No. The forego adding inter- governed above T & M’s default Trizechahn would sions outlined stated leases, charges outstanding bal- giving penalty the storage est or on both the master and courtesy. Id. right professional as a enter into ance Trizechahn the unfettered in relevant part, a modification of solved prem- the and abandoned the leased Record, ises, (a) damages amount of unilaterally awarded. where landlord the 135. The trial court denied the motion in of portion the leasehold for re-takes by (b) part May Order of itself, but also and demolishes and transfers granted by the part reducing motion in the to other tenants the remaining portions Record, interest award. No. 148. The of premises? the court entered an additional Order on June 3. by- Where a lease drafted the amending Order prior by its accu- personal liability landlord absolves from rately outlining which defendants were to any partner repre- signing the lease as a individually be held liable. lessee, partnership sentative of the
¶ 14 where Appellants guar- the landlord does not obtain responded perfecting timely appeal.5 Trizeehahn antees or seek financial per- then information timely partners, its from the individual cross-appeal. fected The trial are if partners personally court ordered individual both and Trize- liable partnership chahn file statements of matters com- breaches lease? See Pa.R.A.P. plained appeal. of on 4. In an action for breach lease: (b) Opinion Support Order, in Di- (a) required Is a commercial landlord rection file statement of matters com- mitigate unpaid damages rent where Thereafter, plained of. the trial court in convey lease does an estate an Opinion issued referred which the dis- requires land and en- landlord to position the various issues raised back deavor premises to re-let the if it does a prior Memorandum issued not elect to terminate the lease? May court 2005. No. 181. (b) Is a landlord entitled to recover ¶ 15 Although the factual nu- operative (i) from its tenant former the costs appeal cross-appeal cleus demolishing that tenant’s leased premis- intertwined, clearly legal issues raised (ii) es, for a in damages period six-month appeal in vary significantly compar- which a occupies new tenant the former legal ison issues raised premises tenant’s leased paying without cross-appeal. such, analyze As we will (iii) rent, prejudgment an interest on appeals separately. and cross-appeal unpaid entire award of rent from the breach, date of de- the tenant’s initial 1050 WDA 2006 and WDA 2006 spite of an the absence acceleration ¶ 16 Appellants the following raise is- (iv) lease, fees, clause counsel for our sues review: despite a fees limiting clause Is a tenant commercial entitled to than those needed situations other in a its landlord’s favor non-payment rent? breach-of-contract action because the Appellants’ brief at duress, misrepresentations, landlord’s duty and other misconduct breached a Stadler, 17 Appellants O’Connor and good dealing faith and fair owed to the join above, who also the issues outlined tenant? following filed a separate raising brief
2. Does a landlord termi- issue: commercial Are Individual Defendants O’Con- *9 nate the lease of a tenant that nor and liable to has dis- Stadler the Landlord? 150, appeal T & M of 5. filed a notice that was ties. 151. This later Nos. Court separate appeáls ap- one filed the other consolidated these with Trizechahn’s 10, July pellants respective capaci- cross-appeal individual their on
533 adopted factual account 3; nizing wholly at also a O’Connor and Stadler brief see Liability 8329, than factual account intensively incom- a 15 Pa.C.S.A. of more examination, ing partner. objective at we arrived step if we to out of be remiss were would Applicable Scope A. Standard and of of appellate solely role basis our Review litigants. unsubstantiated assertions therefore, faithfully instance, will
¶ this we stan Generally speaking, 18 our of and review scope adhere to our review of non-jury dard review over a verdict findings trial factual defer- court’s trial requires us to determine whether the ence, upset to although we will not hesitate court committed an error law findings they prove unsupport- such should findings the trial of fact whether court’s by competent evidence of record. Ris- ed by competent are evidence of supported si, supra 131, Cappella, record. Rissi v. 918 A.2d scope (Pa.Super.2007). 136 Our of review Duty Fair Deal- B. of Good Faith and
requires findings us to review factual ing court and to trial with deference light consider the evidence of record in a 21 now to the substantive is- Turning most Id. raised, favorable the verdict winner. appellants contend Trizeehahn sues duty good a faith and fair breached
¶ 19 Appellants, anticipating the critical dealing when it notified appellants, role our scope play review will deter 29, 2000, February supra, letter discussed mining the success of their fact intensive the master lease that needed retake arguments, contend our that usual defer storage space building in order to correct findings ence the factual of the trial Appellants that code violation. contend court is unwarranted this because case Trizeehahn, notice, prior sending “the findings merely adopted trial court’s already had the space decided take back and, hence, submissions Trizeehahn” that it commit it to a new tenant so could “independently Appel were not made.” purposes egress. an This building 32, 10, citing lant’s brief n. Common contend, misrepresentation, Kratsas, wealth Pa. 67 v. n. that could stripped them of information (2001); 38 n. In the Interest of buyout ne- leverage have been used as A.L.D., (Pa.Su 797 A.2d 341 n. 6 further gotiations. Appellants contend hand, Trizeehahn, per.2002). on the other good faith duty Trizeehahn breached findings the trial contends court’s factual obstructing appellants’ dealing by and fair do not constitute the sort “wholesale space. Ap- the abandoned efforts re-let adoption” litigant’s position of one factual pellants maintain once Trizeehahn in Kratsas. was admonished duty, appellants were excused breached its evidence, point fail to Appellants under lease. performance from further submission, pre-trial as a memoran- such dum, Pennsylvania, 22 In upon the trial court brief which governed by contract law allegedly adopting agreements relied in Trizechahn’s are principles. contract law general rendition of the facts in a wholesale fash- Mouna, My Mgmt., LLC v. appellants’ allegation bald Lehn’s Court Accepting ion. (Pa.Su Inc., 510-511 engaged court in such whole- 837 A.2d the trial .2003), v. Snyder, Amoco Co. per citing would this Court down Oil adoption sale lead (1984). Pa. 478 A.2d unwilling which it to take. upon road such, of a language recognize wisdom in scruti- As when While we *10 unequivocal, clear and meaning its re-letting will be tion to the property, constituted determined its contents alone in ascer- a violation duty good faith. We taining parties. the intent of the See Sev- conclude that it did not. Croker, Springs 202, en Farm v. 569 Pa. ¶ 25 Trizechahn’s notice that it needed (2002). 801 A.2d Every con- to retake the master lease storage space imposes duty tract good faith fair was, instance, in the first immaterial. dealing on parties performance Once defaulted on the master and the enforcement of the contract. lease, Trizechahn was entitled to enter the Conomos, Co., John B. Inc. v. Sun premises and make the alterations it felt 705-706 (Pa.Super.2003), citing necessary space to allow the to be re- (Second) Restatement of Contracts letted. As a consequence, even if appel- 205, Duty Faith Good and Fair lants had known about Trizechahn’s im- (other omitted).
Dealing citations pending plan to use the master lease stor- ¶23 Appellants do not attack the age space to an egress create for a new trial court’s finding were de tenant, they any great- would have not had fault on the master lease when Trizechahn leverage er negotiations settlement be- sent notice of its intent to retake the mas cause Trizechahn was entitled to alter the ter storage space. lease They also do not storage space master lease aas matter of contend that the language ambigu Furthermore, right.6 after Trizechahn’s Croker, Thus, ous. See supra at 1215. right to enter and premises re-let the vest- the trial court’s conclusion that the lease ed, Trizechahn was free to space use the language allowed Trizechahn to enter into saw fit. In exercising right, this storage master lease space and alter Trizechahn concluded that it needed to space without terminating the lease correct a potential building code violation must stand. See appease a new tenant. We do not find 15. Landlord’s Remedies sequence of events evinces a breach of (“If (d), p. 9. the Tenant abandons the good the covenant of faith dealing. and fair Premises or the Landlord otherwise be elect, comes entitled so to and the Land ¶ 26 We also appellants’ allegations find elects, lease, lord terminating without of obstruction to be of no merit. After Premises, to endeavor to relet painstaking review of over 85 exhibits sub- may Landlord ... repairs, make altera mitted by appellants into evidence in con- Premises, tions and additions or to the junction with the trial transcript, we con- and redecorate the same to the extent clude there is no evidence to substantiate deemed necessary the Landlord or de their contention that Trizechahn refused to ”). sirable .... re-let the master space prospec- to a fact, 24 The tive tenant secured question appellants. to be answered issue, with respect appellants’ the earliest mention in first these exhibits of therefore, appellants taking any whether Trizechahn’s asser affirmative action to tion that it storage space needed retake the re-let the was a appel- letter from violation, space building to correct a code lant Titus to Trizechahn dated June coupled with Trizechahn’s alleged obstruc- years over two after the original recognize 6. We that this conclusion would be leasehold the entire lease is terminated. ground on tenuous rule, however, if we were to find that a general Such a does not exist general whereby anytime rule existed a land- in this Commonwealth. See infra. portion lord alters or interferes with a of a
535
default,
lants,
accepted appellants’ sur-
appel-
that
Trizechahn
which Titus states
lease
relieved
of the master
and
process
concluding
are “in
of
render
lants
the
obligations. Appellants’
them of their
leasing agent.
discussions” with
46,
Haifetz,
v.
158
citing
at
Brill
183,
no brief
There is
(1945).
311,
158, 44 A.2d
313
Pa.Super.
in these exhibits
evidence contained
pro-
appellants actually presented
shows
first to Trizechahn’s
Turning
30
Trizechahn
re-
spective lessee to
who was
enjoyment, appel
quiet
breach of
alleged
Appellants
tes-
jected.
also failed to offer
principal espoused
the
lants’ reliance on
rejected
timony
leasing
from a
broker or
Kelly
misplaced.
is
advances
Kelly
to substantiate their con-
potential lessee
every lease in this Com
proposition that
tention.
implied
an
covenant
monwealth contains
of record
27 We conclude no evidence
enjoyment
wrongfully
that cannot
quiet
finding
Trizechahn
exists to warrant a
by
landlord without
termi
disturbed
fair
duty
good
its
faith and
breached
arrangement.
e.g.,
of the
See
nation
lease
and, therefore,
dealing
appellants were not
Co., 366
Bridgeview
v.
Coal
Lichtenfels
performance
(1987)
from further
due to
relieved
22,
304,
25
Pa.Super.
531
alleged
breach.
(“There
implied
quiet
is an
covenant of
enjoyment
every
proper
lease of real
Quiet
Breach
the Covenant of
C.
It is
when the lessee’s
ty....
breached
Enjoyment
Surrender
and/or
is
either
acts of
possession
impaired
by
Master Lease
or
acting
under the lessor
lessor
those
¶28
title.
Appellants’
superior
second
concerns
the actions of a holder
issue
legal implications
‘wrongful
alter-
that inter
Any
of Trizechahn’s
act’ of
lessor
ation, demolition,
possession,
in whole
reconstruction
feres with
lessee’s
is
of the covenant
storage space
part,
both
master lease
or in
a breach
(citations omitted);
Appellants’
enjoyment.”)
initial
see
space.
quiet
the 20th floor
deci-
v.
Bank National Associa
simple
contention
also Kohl PNC
—Trizechahn’s
237,
tion,
248-
storage
to take
the master
Pa.
912 A.2d
sion
back
lease
590
(2006).
enjoy
quiet
space “constituted an eviction from
249
The covenant
insuring
lease,”
A
termination of the entire
which re- ment is defined as: 1.
covenant
appellants
consequences
of further
of a defective
performance.
against
lieved
title.
citing Kelly
v. Mil-
disturbance of the
Appellants’ brief
title or
other
(1915).
ler,
will
ensuring
Pa.
A.
that the tenant
94
1056
2. A covenant
grantor
disturbed
not be evicted or
al-
Appellants
further contend that
a hen or
title.
person having
superior
aof
make
though
permitted
Trizechahn was
(8th
Dictionary
Black’s Law
re-letting
necessary
alterations
ed.2004),
at 25.
Lichtenfels, swpra
accord
to do
permitted
lease
it was
space,
master
¶31
on the
way
After
defaulted
re-letting
if
in a
“only
so
done
master
and abandoned the
to the
lease and master lease
that is
hostile
first
space,
Trizechahn was entitled
an
is subordinate
lease
creates
estate
storage
possession of the
original
that of the
take
and consistent with
Root,
it deemed
and make the alterations
citing
space
Id
v.
tenant.”
Jenkins
(1920).
appel-
necessary
space.
Once
Ac-
re-let
Pa.
112 A.
premis-
defaulted and abandoned
argument,
inasmuch lants
cording
appellants’
and,
es,
possession
they relinquished
the master
as Trizechahn re-let
therefore,
which
possession
had no
appel-
in a
that was
space
way
hostile
such,
could be disturbed.7 As
Trizechahn
estates
in hostility
same lessor
*12
did not evict or
appellants’ enjoy-
other,
disturb
first,
each
accepted by the
termi-
and,
ment of the master
space
there-
nates the relation of landlord and tenant
fore, could not have committed a “wrongful
agreement
under the first
abrogates
act” that
give
would
rise to a breach of the
and annuls all the terms and conditions
Kohl,
quiet enjoyment.
covenant of
See
expressed.
therein
supra at
citing Kelly, supra at 1055.
Jenkins,
232-33,
ters into a
that contains a
second lease
longer term than the first lease that is in
(i)
fraud, no person,
In the absence of
default, this fact is insufficient to establish
heirs,
corporation,
legal
firm or
or the
Brill,
acceptance
supra
of surrender.
at
assigns,
representatives, successors
(“It
Klein,
v.
Rafferty
is true
in
thereof,
respectively,
executing this
Pa.
100 A.
which
agent,
trustee or in
other
lease as
sufficiency
involved the
of an
affidavit
representative
shall ever be
capacity
defense, the court said that
the second
individually
here-
deemed or held
hable
‘extending
beyond
expiration
far
or cause whatsoev-
under for
reason
prevented
recovery
term’
a
original
er.
for loss of rent
the landlord from the
28.
That
date
the second lease.
observa-
¶®,
12.
Special Stipulations
p.
(emphasis
tion, however,
necessary
was not
to the
added).
decision.”).8
court’s
summation,
36 In
fail to
38 Inasmuch
according to general
demonstrate a breach
the covenant of must
construed
be
law, we are mindful
quiet enjoyment
acceptance
principles
or an
of sur-
of contract
construing
a
primary objective
render that
have
them from that the
would
relieved
the intentions of
further
contract is to effectuate
performance under
Croker,
parties.
lease.9
dam-
Appellants
also contend Trizechahn’s
propriety
8. The
of such an indication will
equal
become
evident
ages
more
after consideration
to the
were limited
an amount
analysis.
infra,
foregoing
discussed
As
present
called
value of the rent
duty
landlords have no
to miti-
commercial
present
rental value of
lease minus the
fair
gate
damages.
logically
their
It would
15(f)
premises
paragraph
as outlined in
punish
by stripping
a landlord
inconsistent
damage equation,
the master
lease. This
bargain
him or
for re-
her of
benefit of
however,
only applicable in the
was
event
letting
premises,
the benefit of
lease, which, as
Trizechahn terminated the
lessee, by concluding acceptance
breaching
disposition two issues raised
our
the first
place simply
surrender has taken
because
indicates,
did not
by appellants
we conclude it
subsequent
landlord entered into
lease with
do.
longer
which
transaction
is both
term —a
general
economically efficient as a
matter and
specific
beneficial to the landlord as a
matter.
When
language
Meske,
a contract is unambigu-
lease.
e.g., Lang
See
v.
850 A.2d
ous, its meaning
must be
(‘A
discerned from
740 (Pa.Super.2004)
contract
the contents of the words alone. Id.
ambiguous if it
reasonably
susceptible of
different constructions and is capable of
hand,
39 On one
appellants assert this
being
understood more than one sense.’
clause unambiguously absolves all partners
Cook,
Quoting
v.
Osial
803 A.2d
213-
Trizechahn,
from individual liability while
(citations omitted)).
214 (Pa.Super.2002)
hand,
on the other
contends the clause
unambiguously
indicates that
real es-
¶ 42 At
point during
pro
some
brokers, attorneys,
tate
agents
and other
below,
ceedings
appellants attempted to
who execute the lease on behalf of another
parol
offer
evidence to aid the trial
court
will be able to avoid
liability.
individual
discerning the meaning of the absolution
¶ 40 We conclude
plainly
the clause
indi-
1925(a)
clause. See Pa.R.A.P.
Opinion,
cates the absolution of
only per-
Friedman, J., 7/28/06,
8-9,
citing Trial
persons
tains to those
or entities “execut-
*14
Friedman, J., 8/12/04,
Opinion,
Court
at 2.
ing
agent,
this lease
any
as
trustee or in
This offer was denied based on the trial
representative
other
Record,
capacity.”
court’s bald conclusion that the absolution
List,
No.
Exhibit
No.
Special
clause
unambiguous
was
as a matter of
added).
Stipulations
(i), p. 12 (emphasis
law. Id.
this denial seemingly
While
con
therefore,
In
respect,
this
we concur with
face,
stituted an error of law on its
reading
Trizeehahn’s
of the
Ap-
clause.
history
unconventional
of the master lease
pellants Arbogast and Wettach are the
leads us to the conclusion that it was not—
appellants
two
conceivably
this clause
setting aside for a moment the fact that
therefore,
could protect,
as
executed
the trial
interpretation
court’s ultimate
the lease on behalf of T
ques-
& M. The
the absolution clause was in error.
tion is whether the
protects
clause
Arbo-
gast and
Wettach
their individual ca-
¶43
above,
As discussed
the master
pacities as
well as
their representative
originally
was not
by any
drafted
capacities. The clause provides
any
that
parties
dispute.
this
See Note
person or entity acting in a representative
N.T.,
citing
at 387-388.
8/25/04—8/26/04
capacity cannot be
“individually
held
lia-
addition,
the master lease does not indi-
ble
hereunder
for
reason or cause
cate that the absolution clause was
one
added).
whatsoever.” Id. (emphasis
provisions
negotiation
altered after
be-
would,
parties.
tween the
It
41 It
See id.
though
seems as
phrase
therefore, be a misnomer
Tri-
speak
could be read as
providing absolution from
drafting
for
zechahn’s “intent”
person
entity
absolu-
acting as a
tion clause
representative
because Trizechahn did not
representative
their
the clause.
capacities.
Consequentially,
individual
admit-
Both read-
and/or
draft
ings
plausible.10
ting parol
are
part
The latter
evidence
Trizechahn’s intent
clause, therefore,
pointless
is
would be a
ambiguous
although
as a matter
exercise—
respect
of law with
Trizechahn
question
undoubtedly
to the
would
that
assert
Arbogast
whether
Arbogast
Wettach are ab-
intended to hold
and Wettach
liability by
solved from
represent-
individually
virtue of
liable in the event the master
ing T
executing
& M when
the master
lease was
upon,
defaulted
such an asser-
may
10. While it
seem the
clause
partners
absolution
release
of the individual
susceptible
readings
liability,
not
to two different
as it
frequently
non-recourse leases are
would make little sense for Trizechahn to
executed in the real estate market.
joint
all
a release of
other
disingenuous
would
at best.
constitutes
tion
be
Given
therefore,
Id.
situation,
only parol
promisors.
tes-
timony
conceivably
given any
that could
readily distinguishable.
case is
This
by Arbogast
credit would be offered
habihty
operation of
by
arises
Appellants’
Wettach.
governs obhgations
that
a statute
owed
ap-
by operation
of each
partnerships,
¶44
conclude, therefore,
We
to be held
pellant’s
agreement
individual
provision operates
absolution
to insulate
jointly
severahy hable under
and/or
appellants Arbogast and
from in-
Wettach
8327(2)
master lease. See 15 Pa.C.S.A.
liability in this
Our parol
dividual
case.
(2)
(“All
are hable:
...
supra
partners
analysis
evidence
the lan-
bolstered
Jointly
obhgations
all other debts
itself,
guage of the absolution clause
which
may
any partner
partnership
but
provides
person acting
repre-
that no
separate obligation
perform
enter into a
“individually”
sentative shall be held
hable
contract.”).
partnership
“any
reason or cause whatsoever.”
¶48 Further,
cannot, in good
we
con-
science,
which
hand-
Singer,
hold
was
¶ (i),
This
Special Stipulations
p. 12.
broad
prior
ed
to the enactment of section
down
reading
favor
language tends to
advo-
8327(2),
interpret
us
ahows
the absolu-
and,
Arbogast
cated
and Wettach
in a
all of
tion clause
manner
releases
hence,
plausible reading
is the more
aas
The
habihty.
from individual
matter of law.
*15
clause,
portion of the
as dis-
unambiguous
¶ Aptly
45
anticipating
possibility
the
above,
only
provides that
partners
cussed
that this Court would conclude the absolu-
re-
acting
representative capacity
in a
are
ambiguous, thereby
tion
raising
clause is
habihty
representative
in their
leased from
potential
Arbogast
the
for
and Wettach to
and,
capacities
purposes
of this discus-
absolved,
Singer
appellants point to
v.
sion,
Thus,
capacities.
in their individual
Ritter,
154,
Pa.Super.
167
award —the rental due under ing subject premises, crops such as lease, re-letting demolition and ex- grain; profits civil derived penses, foregone revenue, re-letting pre- subject premises, such as rents. interest, fees, and counsel re- Jurisprudence 28 American 2d Estates 6 spectively. (2007), Marshall, citing Marshall v. 587, (Tex.App.1987). S.W.2d 51 a. Duty Mitigate? Appellants legal therefore, modern was, system, contend that the master in es- usufruct sence, nothing more gov- then contract has become analogous to a life estate. erned common law contract rules as Dictionary, 1580, Black’s Law supra at following evinced clause: citing 535, La. Civ.Code. Ann. art. Usu- 20. NO ESTATE IN LAND sparse fruct. The discussion of usufructs
This contract and lease shall Commonwealth’s case law is ac create relationship general of landlord and tenant cordance with the modern concep Tenant; between Landlord and no es- tion of what usufructs are. e.g., See Hum pass Landlord; tate shall out of McFadden, mel v. 395 Pa. 150 A.2d Tenant has a usufruct which is not (1959) (referring to a usufruct as subject levy and sale. matter,” subject “dominion over the specif coal); ically Appeal, Holman’s Pa. p. (1854) (“A 177-178 personal life estate in ¶ Appellants contend that be property is regarded many now as in re cause the master merely lease is a con spects analogous to the usufruct of mova tract, the mitigation common law rules of law.”); bles under the civil Wilhelm v. apply, giving duty rise to a on Trizechahn’s Folmer, (1847) 6 Pa. (comparing part to re-let space the master lease as legal ownership beneficiary trust has if, promptly possible as we concluded corpus the trust legal owner above, Trizeehahn did not terminate the ship beneficiary interest the of a usufruct lease as evinced language para has; interest, legal former has a while *16 15(b) graph provides: which “[I]in not). the latter does such event the Landlord may, at its elec tion, either terminate the lease and the ¶ 54 Trizeehahn purpose asserts that the right possession Tenant’s to of the Premis of the master lease usufruct provision is es or terminating lease, without this en “to ensure that Defendants’ can- creditors deavor to relet the Premises.” not execute on Defendants’ interest the 187, 1, 15. Land premises.” leases Trizeehahn brief at 33- ¶ Remedies, (b), lord’s p. 9. consideration, 34. After careful we con- ¶ usufruct, 53 A an archaic creature de- mitigation clude the no principle an- law, rived from Roman is defined as: “A by Supreme nounced our Court in Stone- right enjoy to use and the fruits of anoth- hedge, supra, controls. er’s property period for a of time without dispute 55 While we do not that Trize- it, it damaging diminishing although the chahn provision intended the usufruct to property might naturally deteriorate over insulate it from the (8th attachment of the Dictionary time.” Black’s Law 1580 ed.2004). by leasehold appellants’ creditors who Three forms of usufructs have been could then re-let the interest to a recognized country this third- natu- —the profits produced party Trizeehahn, ral to by subject premis- undesirable we also es, resources; such as cognizant timber and natural are a structuring lease profits produced by the industrial cultivat- transaction a potentially as usufruct allows aas lease present having to a more the transaction treated for Trizechahn favorable to who be priority question scheme lenders would thus subject to lien law. The grant money willing non-purchase more of the whether substance becomes mortgages Gateway Center free a closely more resembles master lease presented by long term encumbrances closely more resembles or whether it lease leases that are undesirable held lessees former, is the the sub- a usufruct. If it a generally, lender. See 68 P.S. the form name stance the lease controls right right paramount pur- When “usufruct,” no unquestionably there is and (providing chaser that a lease will survive 552 Pa. at duty mitigate. Stonehedge, judicial a foreclosure sale when the latter, 1084. If it is the 715 A.2d at prior entry was executed to the the usufruct accor- the substance of prior foreclosure to the re- “usufruct,” giv- form name dance with the fore- cording giving of the instrument duty mitigate.11 ing possible rise a title, provided the purchaser closure sale conclude the former characterization We knowledge lessee had no foreclosure appropriate.12 most judgment). que 57 The non of a lease is sina attempted Trizechahn to do What right lessee to “use and obtains provision with usufruct was to have and, thus, obtains a occupy” property (i.e., protections duty of lease law no subject property. leasehold interest mitigate) simultaneously attempting while (8th Dictionary 907, potential 909-910 to eliminate the detriments of Black’s Law nothing Supreme Stonehedge Square then semantic 11. The Court in the law based on more Merchants, Secondly, many of the reasons Partnership distinctions. Limited v. Movie (1998), applying Stonehedge Court advanced for Pa. noted mitigation principle no to commercial aspects "certain are con- when leases namely, simplicity, conformance trolled the law of contracts and that inso- leases— Act, predictability, Tenant the Landlord applicable, far as the law of contracts is implicat- fairness —would all fundamental non-breaching party mitigate dam- must its ed in such a scenario. statement, ages.” import The howev- accept appellants’ Even if we were to char- er, given subsequent is unclear the Court’s lease as usufruct acterization of holding. lease, not a true no means is above, governed by As is noted leases are certainty apply that we would then the com- Sny- the law of contracts. Amoco Oil v. Co. principle mitigation law to the usufruct. mon der, (1984) 505 Pa. 478 A.2d event, disposition due to of this our ("[A] is in the of a and is nature contract question day. appeal, we for another leave *17 law.”), by principles of contract controlled Larson, 615, quoting Ezy Parks v. 499 Pa. 454 with this were confronted a situa- 12. If Court 928, (1982). Stonehedge Court A.2d 934 The third-party attempt- was where creditor tion a held, law, that as a matter of commercial space ing it had to lease the master lease mitigate duty a lessee, landlords have no to when to we would construe attached another premises in tenant abandons violation against and allow for the lease Trizechahn virtually subject impossible It lease. is satisfy the in order to debt creditor re-let transaction, imagine a a situation in which Similarly, we also hold that a would held. lease, actually purporting a specifically to be is character- purchaser, more sale foreclosure promisee aban- foreclosing non-purchase ized as a contract wherein on mon- a a lender promisor existing premises subject is then ey mortgage, dons and the would take Gateway mitigate. a were to on Center. forced to If such situation leases commercial arise, however, words, we faced in all would this Court would be In other contexts problem apply doctrine to significant apply a if asked to over form substance Stonehedge literal statement. Ini- defeat Trizechahn’s characterization Court’s inconsistency in lease as a usufruct. tially, master to do so would create 542
ed.2004).
usufruct,
que
repeatedly
The sina
non of a
lease
refers to itself
“this
as
hand,
Record,
187,
the other
is that the usufructee
e.g.,
lease.” See
Exhibit
¶¶
right
products List,
5, 6, 7, 9,
14,
obtains a
the stream of
1,
10, 11, 18,
No. 1 at
yielded by
subject
revenues
15, 16, 17, 18, 20, 21, 28, 27,
and/or
28. Accord-
property
an
obtaining
without
interest
ingly, we must treat the master
lease as
accord,
1580;
therein.
Id. at
28 Am.Jur.2d
Lyon
lease. See Frank
Co. v. United
Marshall,
(2007), citing
Estates
supra
States,
561, 572-573,
435 U.S.
98 S.Ct.
at 599.
Admittedly,
distinction be-
(1978)
(“[A]
use and space. generally, See
List, No. 1. The substance of the transac-
tion,
(d)
therefore,
arrangement—
a lease
If
abandons
the Tenant
the Premis-
Moreover,
not a usufruct.
the master
es or the Landlord otherwise becomes
Blumenthal,
doing.”), citing
13. The
form doctrine
re
substance over
was de-
Estate of
veloped by
(Pa.Super.2002).
federal courts to deal with tax
812 A.2d
The
however,
principles
argument,
shelters. We
problem
feel the
this doc-
with this
is that
imported
trine can be
to other transactional
ambiguous
considered
clause can
if
contexts.
susceptible
"reasonably
it is
to different con
capable
being
structions and
understood in
We realize that
could raise the
more
J.W.S.
v.
than one sense.”
Delavau E.
argument
ambiguous
that the master lease is
Transp. Warehousing,
Am.
&
810 A.2d
to whether it is a lease or
usufruct and
quoting
(Pa.Super.2002),
681-682
Madison
requires
ambiguity
a remand for
Co.,
Harleysville
Const. Co. v.
Mut. Ins.
purposes
introducing parol
evidence
(1999).
Pa.
which,
context,
potential
in this
creates the
*18
only
agreement
Terms in an
can
be consid
be
for the master lease to
considered a usu-
conjunc
could,
ambiguous
ered
considered in
when
potentially,
fruct that
have vested Tri-
underlying
tion with the
facts of the case. Id.
duty mitigate.
e.g.,
zechahn
to
with the
See
case,
Servs.,
completely
In this
it would be
Raymond
unreason
Trombetta v.
James Fin.
(“Further,
of the
(Pa.Super.2006)
able to consider the use
word "usu-
558-559
exists,
creating ambiguity
ambiguity
a
fruct” as
when there is no
when an
in contract
courts
question
against
underlying
contract
that the
are free to construe the
the
substance
form of a
drafter and consider extrinsic evidence in so
transaction is in the
lease.
¶
Appel
elect,
64 c. The DMJM Lease.
so
and the Landlord
entitled
to
lease,
next
the trial court erred
elects,
lants
contend
terminating the
to
without
credit
with six
it did not
them
when
to
the
...
the
endeavor
relet
Premises
fact
due to the
payments
months
rental
may
repairs,
Landlord
make
alterations
with
Trizechahn entered into a lease
that
Premises,
and additions in or to
giving
occupancy
them six months
DMJM
same to the extent
redecorate
disagree.
again,
cost. Once
we must
at not
necessary or
by the Landlord
deemed
desirable....
¶
matter,
had
65 As an initial
Trizechahn
at
duty
mitigate,
to
as
discussed
no
Record,
List,
at
No.
No. 1
Exhibit
at 1084.
Stonehedge, supra
length above.
added).
¶ 15(d), p.
(emphasis
to
the mas-
If Trizechahn did choose
re-let
¶
dispute
they
that
Appellants
do not
however, it
space,
was entitled
ter lease
floor
nor do
space,
abandoned
20th
rent,
“for such
for such time
do so
dispute
they
on the
they
defaulted
such
as the Landlord shall
upon
terms
Trize-
gave
lease—either of which
master
determine,
Record,
be reasonable.”
right
begin
space.
altering
chahn
List,
No. 1 at
Landlord’s
15.
Appellants
dispute
also do not
addition,
Remedies,
(d),
trial
p. 9.
are liable for
costs associated with re-
court found as fact
the decision
space.
letting
They
dispute,
do
how-
months
occupancy
offer DMJM free
for six
ever,
en-
necessity
demolishing
was a reasonable commercial inducement.
point
tire 20th floor and
out that the
N.T., 8/25-26/04,
362;
at
Trial
see also
See
performed
Trizechahn
this total de-
reason
testimony
Opinion
(crediting
at 17
Court
was to
remov-
molition
effectuate asbestos
leasing
director of
offered
Trizechahn’s
al.
concerning
of the local real estate
the state
credible).
as
In summa-
market
court,
The trial
in calculating appel-
court,
tion,
indepen-
trial
an
making
20th
lants’
for the
floor restora-
determination of the reasonableness
dent
tion,
$174,022
subtracted
from a total cost
conduct,
appel-
of Trizechahn’s
afforded
$885,992.03
attempt
in an
to ensure
layer
protection
granted
not
lants
unfairly
appellants were not
saddled
dis-
itself. We will not
expenses.
asbestos abatement
Trial Court
re-
trial
in this
turb the
court’s decision
19-20,
Friedman, J., 3/30/05,
Opinion,
at
8.
gard.
Interest.
Prejudgment
are
66 d.
Appellants
seemingly
¶ 63
court
contend the trial
contending,
baldly,
Appellants
albeit
that none of
next
interest
the entire
awarding
have
neces
erred
restoration costs would
been
retro
due
the master lease
sary
not been
amount
under
had
asbestos abatement
February
because
actively
in this
performed. There is
fatal flaw
accel
not
an
contention, however,
master lease did
contain
impossible
Ex
our
clause. See
given
substantiate it
eration
this Court
¶ (a),
Rent,
record,
p.
at 1.
at
especially given
No. 1
cold
hibit
review
(“Interest
twelve
annum rate of
per
point
failure to
evidence
appellants’
(12%)
charged
retroactive
will
percent
record to substantiate their contention.
the month
rents
such,
day
the first
will not review this contention
As
we
(10th) of the calendar
by the tenth
paid
the trial court’s
uphold
further
we
month.”).
Tri
Rissi,
further contend
Appellants
allocating
supra
costs.
method
to terminate the lease
failure
zechahn’s
*19
the wake of the default also mandates that
(Pa.Super.2005),
1032 n. 11
allocatur de-
only
interest
722,
(2006).
should
accrue on rental pay-
nied 589 Pa.
with plain language paragraph desirable, may Landlord deem and in Record, List, No. Exhibit Exb. connection pay therewith to expenses Interest Calculations. and employ counsel. The agrees Tenant ¶ 68 The trial court erred aas matter of to pay a attorney’s reasonable fee if in subverting law both plain language legal required action is per- to enforce of the master lease and import condition, formance Tenant any Croker, parties’ subsequent actions. supra obligation or requirement hereunder. at 1215. There simply was no rational All paid sums so by the Landlord and all foundation —either in law or in fact—for expenses therewith, in connection to- Rissi, the trial court’s interest award. gether with interest thereon at the rate supra Indeed, at 136. although Trize- per of 10% annum from the date of $471,002.20 only requested chahn in inter- payment, shall be deemed additional arrears, est on the payments rental rent payable hereunder and at the time trial court awarded in excess of installment of Rent thereafter $1,000,000. Trial Opinion Court at 20. On becoming due and the Landlord shall remand, the trial court charged have rights the same and remedies for recalculating the interest due in accor- thereof, non-payment or of other dance with the terms of the master lease rent, additional inas the case of default Opinion. and this payment of Rent. ¶ 69 e. Counsel Fees. The p. general rule in this Commonwealth is that recovery attorneys’ there is no fees Appellants contend the word “here- from an party adverse absence of an under” obligations refers that are express authorization, statutory itself, clear outlined paragraph 15(g) within agreement parties, between ap whole, and, such, or the the master lease as a plication of a clear exception. Neal v. attorneys’ fees should not have been Motors, Inc., Bavarian 882 A.2d awarded pursuit because the of rent
545 E. and Stadler obligations not out- O’Connor arrears was one of the that, further contend Appellants lined. ¶ (“appellants” 73 and Stadler O’Connor best, ambiguous, provision the is which raising Opinion) in in this of this section the provi- this Court to construe requires they be held the issue of whether should the drafter. against sion Trizechahn as award, damage the hable as on individuals arguments. forward four ¶ estimation, Paragraph in our 15(g), 71 “reasonably it ambiguous suscepti is is ¶ First, it is appellants contend 74 capable ble to different constructions liability fundamentally unfair for individual being in more than one of understood Appellants out point to attach to them. Transp. v. E. Am. sense.” J.W.S. Delavau partners in T & M they that while were Warehousing, A.2d 681-682 & 810 executed, the time master lease was the Madison (Pa.Super.2002), quoting Con they years left firm before the the v. Harleysville Co. Mutual Ins. struction They point also out was breached. Co., Pa. until they notified of default were not the (1999). hand, On one the clause could be litigation and that were began allowing of read as for the award attor to res party any pertaining discussions in neys’ fees situations where Trizechahn dispute. They of further direct olution legal collect pursuing action to rental this Court to the trial court’s decision Alternatively, payments arrears. Tay dismiss defendant Richter former C. could provision allowing be read as was the trial court lor as evidence only in recovery attorneys’ fees situa acting towards them due to impartially payments tions where Trizechahn forwards in T & Taylor partner fact that was also a appellants operating on behalf for costs M at the the master lease was execut time and taxes for which were hable 8327(2). ed. See generally, Pa.C.S.A. the master under lease terms. See Rec noth- argument first Appellants’ (l)(b). ord, No. 1 at ing plea than a to absolve them more Indeed, of the exception with words “unfair- liability vague notions of based act an part,” objective “or other on its any legal ness.” There is no citation to provision reading overwhelmingly authority argument within the contained appellants’ favors interpretation. this Court a basis on which give would imposed by operation jurisprudence requires 72 Our to override clear Furthermore, fees, respect for which do of statute. with agreement counsel we Neal, court Taylor, the trial supra not have this at 1032 former defendant case. noted, was [he] evidence shows Accordingly, n. 11. we vacate award “credible Partnership before effectively fees as an out of of counsel it constitutes error ... Rissi, but of October supra law. at 136.14 lease date clearly to not way analysis, provision appellants, intent which was By further attorneys’ be held for fees. 15(g) bargained liable paragraph was not one of such, alterations to master lease. As for this is the case and inasmuch Inasmuch as ambiguous intent to would be mistake to ascribe as we are unable to construe the attorneys' drafting against fees be- attorneys' Trizechahn clause Trizechahn fees clause, Thus, there is no reason remand the actual drafter of clause. cause it is not evidentiary hearing purposes accordance an still read in clause should argument introducing parol appellants’ because evidence Trizechahn offered parol evidence that could be only conceivably credible evi- conceivable as the reading. could would be the bolsters this dence that be offered *21 technically who, did not leave until after that creditor of the partnership know- Opinion date.” Trial Court at 21. While ing agreement, of the to a ma- consents we are uncertain meaning as to the actual terial alteration in the nature or time of phrase, Taylor’s of this dismissal is not payment obligations. Trizechahn, challenged by any nor other (c) § 15 Assumption Pa.C.S.A. of party, and as such we operate must under Obligation. the assumption that the trial court correct- Appellants 79 maintain Trizechahn’s ly Taylor dismissed due to the fact that he knowledge of plan the dissolution and their partner was not a when the master lease absence from it constitutes consent to the short, was executed. appellants’ first “material alteration in the nature or time argument affords them no relief. payment of of the obligations” such that Appellants’ 76 argument second is appellants longer were no liable under the premised following statutory on the provi- master lease. Id. sion: (b) AGREEMENT. —A partner is dis- Appellants’ second and charged any existing liability from upon arguments third were not raised in the dissolution of partnership by an trial court. A thorough appel review of agreement to that effect him- between answers, fact, proposed findings lants’ of self, partnership creditor and the brief, post-hearing post-trial motion for re person partnership continuing the lief, and the hearing transcripts reveals agreement may business. The in- that there any was never mention of the ferred from the course of dealing be- applicability of section to dispute. tween the having knowledge creditor of See Nos. Answer and New the dissolution person and the or part- Matter Complaint; Second Amended nership continuing the business. 113, Defendants’ Proposed Findings of 15 Pa.C.S.A. Effect of Dissolu- Fact; 114, Post-Hearing Brief on Behalf (b) existing liability partner, tion on of Defendants; 135, Motion for Post-Trial Agreement. 227.1, Relief Pursuant to Pa.R.Civ.P. ¶ Appellants argue Trizechahn was (“Mr. [Post-Trial Relief] O’Connor and made aware of the partnership dissolution Mr. partners Stadler were not when the agreement pertaining to liquidation paying Defendants ceased rent or at the T & M and were also conscious of the fact any alleged time of default. The evidence party were not a to this agree- was clear that the Plaintiff under never ment and that gives this awareness rise to wrote the Lease based on their individual the inference that Trizechahn ap- released financial statements and knew of their de pellants from their liability individual un- partures. Because Mr. O’Connor and Mr. der the lease. partnership Stadler withdrew from the
¶ Appellants’
argument
third
is also when it was current on its Lease obli
premised on a provision of the Uniform gations and the Plaintiff knew of their
Act,
Partnership
provides:
which
departures,
cannot be liable for
(c)
damages
any alleged
breach of the
ASSUMPTION
OF
OBLI-
following
departure.
gen
Lease
their
person agrees
GATION.—Where a
See
Doak,
existing obligations
erally
assume the
In re Labrum &
trial individual cross-appellees, to relied mary to and Stadler affirmed. O’Connor is following provision: the on Cross-Appeal at 1151 2006 WDA person partner A admitted as a into ¶ following Trizechahn’s the is- 82 raises existing is liable for all partnership an sue for our review: partnership arising obligations the the prop-
VIII. Whether the Trial Court though he his admission as had before erly in fa- granted summary judgment obligations partner been when Dulac, Jr.; B. of Donald T. Charles vor except incurred that this were Watkins; DeWalt; Henry L. R. Suzanne partnership be satisfied out of shall III; Parrish; Johnston, Debra M. Ste- property. Har- phen R. Kaufman and Thomas M. Liability § of incom- 15 Pa.C.S.A. diman? ing partner. at 5. Trizechahn’s brief ¶85 trial concluded that all The court a trial standard of over 83 Our review T & M after the cross-appellees joined had grant summary judg court’s decision and, executed lease had been requires ment us determine whether therefore, could held liable as a not be fact question of material presents record Weisenberg v. of law. also matter See de concerning an element of the claim or Assocs., Pa.Super. 446 Royal Mount Inc., Medtronic, Creazzo fense issue. v. (1995). 1103, 1108 (Pa.Super.2006), quoting 903 A.2d Co., Trizechahn attacks conclusion 856 A.2d Pappas v. UNUM Ins. Life First, scope raising arguments. a number of (Pa.Super.2004). Our Given, litigation, simply is tenuous and dan- complexity connection too involved, inferring ger agreements based such parties and the sophistication of the below, significant. connections is tenuous proceedings we find duration of application accept appel- waiver doctrine strict of the also able to We would not be we were appropriate argument ”consent[ed] in this case. Even if lants’ that Trizechahn appellants’ arguments were the nature time conclude to a material alteration in consideration, obligations.” payment not be able Pa.C.S.A. ripe we would 8358(c). actually The discloses the accept appellants’ argument that Trize- record aware- knowledge opposite despite Trizechahn’s mere of the dissolution chahn’s true— liquidate, planning & M supply predicate neces- that T was plan can factual ness rent it was agreement whereby doggedly pursued Trize- sary infer an Trizechahn liability. The under the master lease. released owed chahn Trizechahn cross-ap- contends while Dulac Defendants and Watkins pellees T were T yet partners were not & M associated with & M at the when time into, executed, Storage was entered master lease Lease but they was were terminated both their partners associations storage time lease was with T & M therefore, several months before T & and, summary executed judg- alleged pay M’s failures rent under ment granted should not have been be- Storage Lease occurred. cause still cross-appellees potentially could be liable storage under the lease as indi- III. Count viduals. ¶ 89 Although clearly Trizechahn was denial, aware of this it failed to address it found, 87 The trial court “The Second opposition either its brief in to the mo- Storage Lease was terminated effective tion for summary judgment supple- or its *23 April by agreement parties mental response to the motion even though and is part not of the instant dispute.” doing so would have been its best inter- Trial Opinion Court at 3. The evidence of Record, ests. Nos. 66. record establishes Trizechahn terminated ¶ 90 Johnson Cross-appellee later filed a the by right April effective 2000. join motion to adjudication the on the Du- Record, 42; No. see lac and motion in Watkins which it ¶2, Yet, also id. at No. 13. the trial court averred: position “The Johnson is iden- also found and cross-appellees Watkins, tical position to the and John- $1,602.24 owed a total of on storage the son joined would have so asserted had he lease and then awarded this amount to in the Summary aforesaid Motion for though Trizechahn —even it concluded Judgment.” Record, No. Motion to cross-appellees not be could held individu- Join Defendant R. Henry Johnson III in ally storage liable under the lease. Trial Prior Summary Judgment Adjudication, ¶4, 11, Opinion Court ¶ 2. again, Once Trizechahn did not raise the liability issue of individual under ¶ the be, may the case Whatever storage lease.16 we conclude Trizechahn waived this argu ¶ ment. pled Trizechahn first a count for Finally, failed to Trizechahn raise breach of the lease in storage initiating its against the issue in defending motion complaint. Record, No. at Count III. summary for judgment filed cross-ap- Watkins, Cross-appellees Hardiman, Parrish, Dulac pellees and Kaufman. cross-appellees Record, first to file a motion for Response Motion for summary judgment, specifically denied in Summary Judgment of Defendants Thom- dividual liability storage Hardiman, Parrish, under lease in as M. M. Debra their motion: Stephen R. Kaufman.17 cross-appellee may summary judg- 16. While DeWalt to a also able affirmative defense join, appear have filed a Cross-Appellant’s reply motion to does not ment motion.” brief within the certified record on the docket at 8. and, therefore, sheet does not enter into our Trizechahn is correct in its contention that analysis. Hardiman, Parrish, cross-appellees storage put Kaufmann did not Storage lease at Trizechahn contends: "The Lease summary judgment. issue in placed was not their motion for even at issue in the Motion for contention, Summary See Judgment of the No. 87. This howev- Parrish Defen- _A er, above, respondent summary judg- dants to a is of no As is discussed moment. aware, by required clearly ment motion be Trizechahn should not to roam was time filed, legal pastures searching every imagin- this motion that the was other cross- partnership summation, previously hable incurred waived Trizechahn debt, en- cross-appellees may judgment have right argue its nevertheless personally be liable under the con- should held him or her. Trizechahn against tered storage by failing argu- raise this judgment tends that without such appropriate trial court ment case, various execute it cannot time, specifically when the various dis- partner- interest cross-appellees’ sought missed absolution from defendants conversely, Cross-appellees argue, ship. liability storage under the lease. personal liability is judgment of individual Milicic, supra at 693.18 See be- superfluous given the circumstances ex- already cause is entitled to Trizechahn next the trial 93 Trizechahn contends up T & assets by concluding cross-appellees against court erred ecute M’s judgment were not liable under section 8329. Trize- owed. amount of section chahn maintains relieves admit that section 8329 does We satisfy from cross-appellees having drafting clarity and represent a model of resources, personal out of their internally inconsis- being could read as it does not them absolve compound face. matters tent on its To In Weisenberg, supra the first instance. further, Weisenberg held while Court this Court held as follows: *24 incoming respect partners, that to with designed clearly was [Section 8329] part- remain liable for “these individuals any liability limit of new satisfaction obligations arose before nership which partners come a partnership who into person’s partnership” admission to the after the an partnership has incurred con- apply Court on to this rule and went obligation. While these individuals re- in that “cannot appellant cluded the case partnership obligations main liable for an obligation be personally held liable” which person’s arose before that admis- prior appellant’s incurred admission partnership, liability sion their at 1108. partnership. into the Id. can partnership be satisfied out of sum, property.... find the plain we we con- problems, these must Given § reading purpose and 8329 to behind legisla- strue 8329 in a manner the section clear Appellant and we conclude that 1 Pa. generally, ture would endorse. See personally ... cannot be held liable for 1922(1), Presumptions § in ascer- C.S.A. payment obligation by created of (“In taining legislative intent ascertain- partnership. Assembly General ing the intention at 1108. Id. following in the of a statute the enactment others, used: among may be presumptions, 94 The not an question salient (1) Assembly does not That the General Weisenberg newly swered is whether absurd, impossible partner, individually who not intend a result that is admitted is summary judgment we determine that Trize- appellees granted 18. Even if were to were issue, liability the issue individual under both the we are un- did not waive this chahn storage Nos. master and leases. See cross-appellees when entered aware of (Orders granting summary way partnership; we have therefore no Dulac, Watkins, cross-appellees favor Johnson). prior to the knowing whether entered notice, undisputed Given this storage lease. Trizechahn execution of burden to raise the issue of was Trizechahn’s dem- point evidence of record fails to cross-appellees individual Parrish cross-appellee joined onstrating T when each cross-appellees storage under the lease—these & M. duty hang themselves. did have execution, unreasonable”). After a difficulty, The which is overcome by searching. analysis, we are compelled worded, this section as is illustrated agree cross-appellees’ position. the common case where all the property existing partnership is taken ¶ Obviously, any attempt to ascertain over, without notice of break in the legislative intent complicated by the fact business, conduct of part- the new adopted section 8329 is from a Model nership composed of all the members of Code. See Uniform Partnership §Act existing partnership and the incom- (1914). must, therefore, We proceed un- ing partner; thereby depriving the ex- der the assumption that the General As- isting partnership of all its property. sembly, adopting provisions various existing Both the subsequent and the the Uniform wholesale, Act Partnership may creditors believe it is one and the concurred with reasoning set forth in but, same partnership, stated, as such both the Act and the comments thereto. would not be the case present under the The comments to provide: UPA 17 law. peculiar equity There is no in-the present The section eliminates the dif- subsequent giving creditors them a ficulty which arises when a new partner right to be preferred, against is admitted liquidation without firmof property employed business, present debts. The theory of the com- the existing creditors. incoming The mon law is that a new partnership is partner partakes of the benefit of the formed; property all the partner- partnership property an established ship which up existed to the moment of business. He has every means of ob- the entrance of the new partner being full taining knowledge protecting transferred to the new partnership. himself, may because he insist on the The result of theory if liquidation or settlement of existing *25 fails, business the creditors who have partnership debts. The creditors have extended credit after the admission of no means of protecting themselves. So partner the new prior have a claim on preserve present as to the nearly law as the assets in the inequi- business. The possible as it is declared that the liabili- table character of this result has led the ty of the incoming partner shall be sat- courts, where no notice of change the of only isfied out partnership of property. membership by creditors, is had the It, therefore, results that existing and be in diligent finding an assumption of subsequent creditors have equal rights liability part on the of partner- the new as against partnership property and the ship of the debts of the old partnership. separate property previously all the of Though this section changes the for- existing members partnership, the of law, mal statement of the which is to the while only subsequent creditors effect that an incoming partner is not separate rights against have estate liable for debts contracted before his newly admitted partner. of admission, aas matter of fact the section Partnership § Uniform Act comments as worded conforms to the actual deci- added). (emphasis courts, however, sions of the which are arrived at making every effort to 98 The critical distinction that must be impress an assumption liability of on the maintained lies in the difference between part of partnership, the new a liability partner formed as a liability as versus as an result of the part- distinction, admission the new individual. Without this sec- ner, of the partnership. debts of the old tion 8829 reaches an absurd result. The (3) Procedure, specific right partner a Pennsylvania Rules of The Civil subject not partnership property is and execution govern the entrance which on a except or execution a attachment judgments, “judgment” defines a When against partnership. “judgment, requiring or decree claim order a property is attached any partnership money entered court payment of for debt, rules, partnership partners, or subject including a which to these them, a de- representatives interlocutory payment final or or order ” right claim partner, Definition. cannot costs.... Pa.R.C.P. ceased exemption definition, laws. entering a under the homestead Pursuant as indi- judgment against cross-appellees right § Nature of 15 Pa.C.S.A. superfluous viduals would be due to partner specific partnership property partners re- incoming fact that cannot be (b)(3) Tenancy (emphasis Incidents of money of his or her quired pay out added). definition, Thus, by
individual estate. provision This makes clear finding of individual under these against part- judgment once entered nothing other circumstances would be than right any prop- an individual’s nership, formality a wasteful that would result erty partnership may also be held any practical consequence. We have irrespective of whether attached — difficulty envisioning that the drafters of as an partner can be held liable individual UPC, Assembly or our General judgment. Consequently, under allow- matter, intended to oper- section 8329 an ing against to be entered nothing ate in such a manner —and in the individual incoming partner as an would § comments to convinces us oth- UPC 17 absurd, judicial a waste of pointless, erwise. 1 Pa.C.S.A. generally, See resources.19 Furthermore, 1922(1), conceivable supra. find The we Trizechahn’s by allowing of a that would be served judg- contention that absence function namely, to be against cross-appellee judgments ment each as an such entered — individual, by allowing creditor them protecting it will be to execute on unable partner- ability all of the assets of cross-appellee’s pursue each share of the irrespective This of each individual ship property partnership to be unfounded. Com- carried out provides partner’s version of the share therein —is monwealth’s UPA *26 operation of as follows: Section 8342.20 contends, a ty an many, are he or she has interest "there in which Trizechahn a Such many judgment partnership where cannot be that has been held liable. instances a upon executed because of one or more ex- in this case because situation cannot arise by emptions provided currently by law.” immunities & M are held a trustee assets of T reply citing Cross-appellant’s Pa. brief bankruptcy in a estate. 3123.1, Exemption Claim or Im- R.C.P. to arise another If a situation were such Hearing. munity Property. Prompt Tri- of however, case, we that a cause are confident its mark. Rule zechahn's contention misses sounding fraud or conversion of action a bar the execution of a 3123.1 acts as to adequate with such a remov- to deal would judgment categories property of on certain partnership al assets. of debtor, by a held a to the execution of may recognize arise that situations We also judgment the actual debtor. on against part- a entered a is where executing by nership that can be satisfied recognize We situation could arise We partnerships’ assets. portion incoming partner, not held individ- where an interpretation our of section do not think ually by operation of section liable in such an instance presents difficulties personal proper- attempt to remove the could ¶ 302(l)(b) argument Intended and Ben- Trizechahn’s final Incidental Hardiman, (additional omitted). Parrish, cross-appellees is that eficiaries citation individually and Kaufmann are liable Here, foregoing none of the condi- provision of a T M dissolu virtue the & tions has been satisfied. The dissolution plan, allegedly tion which evinces Hardi inten- plan memorializing was aimed Parrish’s, man’s, and Kaufmann’s collective the various T & M in tions of members of to assume intention individual the firm. It is to see liquidating difficult of the payment sums due under both the liquidate to effect- how the intent would be support and storage leases. In holding Hardi- cross-appellees uated argument, Trizechahn to points Parrish, man, individually and Kaufmann following provision plan: of the Moreover, the master hable under lease. application liquid 8. The order of of the in- extenuating there are no circumstances Receipts assets of the Firm from the Hardiman, Parrish, Kauf- dicating and/or expenses of fees and or from other give mann intended Trizechahn the ben- shall sources be as follows: because, promised performance any efit of Payment outstanding f. all ac- agree- of the provision dissolution payable
counts unsecured or other Trizechahn, upon by ment relied there is Firm, debts of including but Hardiman, performance promised by no not limited to amount rent or Parrish, any party, Kaufmann to let and/or determined the Administrator Rather, Trizechahn itself. the ex- alone reasonably necessary assure in- plicit meaning provision of the is to termination of Firm’s lease on liquidation struct estate administrator premises. its in which the assets the order estate’s 92; brief at Thus, Trizechahn’s see also disposed. grant were to be Judgment Summary No. Motion for Du- summary judgment cross-appellees Dulac, Jr., Donald T. Watkins, Defendants lac, Johnston, DeWalt, Hardi- Watkins, H, B. of Liqui- Charles Exb. Plan man, Parrish, and Kaufmann is affirmed. dation. IV. Conclusion easily of Trize dispose We imposition The trial court’s of indi- final argument. party
chahn’s A becomes liability against appellants Arbogast vidual third-party beneficiary recognition when is Judgment reversed. Wettach performance in the beneficia right of a vacated as relates to counsel fees ry appropriate to effectuate the inten $326,623.58. a) Judgment amount is also parties “the tion of and either: and all awarded vacated as interest satisfy performance promise of the an will limited and this case is remanded for the money promisee pay obligation 2) recalculation of all purpose of interest. beneficiary;” circumstances “the *27 judgment other is affirmed. The give respects, that promisee indicate intends granting summary judgment beneficiary promised the benefit of the Orders Chen, Dulac, Watkins, Johnston, cross-appellees 586 Pa. performance.” See Chen v. (2006), DeWalt, Hardiman, Parrish, Kauf- citing 89 n. 3 and (Second) of Contracts mann are affirmed. Restatement (“A part- person partnership assets of the allocated to C.S.A. 8329 admitted as as the out in existing would still be carried partnership is liable for ner into an percentage stake each accordance obligations partnership....”). all the partner partnership. 15 Pa. owns in the ¶ juridical general existence as part, separate in re- Judgment affirmed Appellants, and These in other part, part, partners. in vacated in case versed hat” words, proceedings “representative remanded for consistent with their donned Opinion. hat” “partner their but did not remove on the master lease they when executed ¶ relinquished. 106 Jurisdiction I partnership. Accordingly, behalf of the Concurring Dissenting and indi- judgment imposing would affirm MELVIN, J. Statement ORIE and liability Arbogast on Appellants vidual Wettach. CONCURRING AND DISSENTING MELVIN, BY
STATEMENT ORIE J.: majority’s 1 I concur in the decision and
1050 WDA 2006 1091 WDA 2006 and inter-
vacate award counsel fees
est, purpose for the remand limited interest, judg- affirm the
recalculating in all respects.
ment other I also concur majority’s to affirm the decision Pennsylvania, COMMONWEALTH challenged cross-appeal orders Appellee 2006. WDA v. however, dissent, majori- 2 I from PERREAULT, Appellant. Allen C. ty’s decision in 1050 WDA 2006 and 1091 imposition 2006 to reverse the WDA Pennsylvania. Court of Superior liability against Appellants individual April Submitted Arbogast Thomas D. C. and Thomas Wet- majority tach. I with the agree While 17, 2007. July Filed Arbogast and are the two Wettach Appellants conceivably against protected 28(i) under Section (referred majority as the clause”), I Maj. Op.
“absolution
disagree portion the latter ambiguous as to
same section whether protected against liability are also 28(i), capacities.
their individual Section I as a
which believe should be read whole clauses, separate not into carved
clearly representatives means that “such subject liability merely
would be
having signed” “purport and does not anyone might li- personally
excuse who for other rea-
able on the [master] 3/31/05, Opinion, at 21-
sons.” Trial Court Here, liability of the individual Arbo- fact arises not
gast Wettach *28 executed but their partnership
behalf