Walnut Street Supermarkets v. Trustees of U of PA ( 2019 )

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NON-PRECEDENTIAL DECISION - SEE SUPERIOR COURT I.O.P. 65.37
WALNUT STREET SUPERMARKETS, : IN THE SUPERIOR COURT OF
LLC, D/B/A THE FRESH GROCER, : PENNSYLVANIA
SUCCESSOR TO SUPERVALU :
OPERATIONS, INC. :
:
Appellant :
:
:
v. : No. 1695 EDA 2018
:
:
THE TRUSTEES OF THE UNIVERSITY :
OF PENNSYLVANIA C/O DIVISION OF :
FACILITIES AND REAL ESTATE :
SERVICES :
Appeal from the Order Entered May 9, 2018
In the Court of Common Pleas of Philadelphia County
Civil Division at No(s): December Term 2016 No. 0109
BEFORE: PANELLA, P.J., OLSON, J., and FORD ELLIOTT, P.J.E.
MEMORANDUM BY PANELLA, P.J.: FILED NOVEMBER 19, 2019
In 1999, the predecessor in interest to Appellant, Fresh Grocer, agreed
to lease property from the predecessor in interest to Appellee, Penn, for a
state of the art grocery store and parking garage.1 Because construction was
still ongoing when the parties entered into the lease, it included provisions for
a “Commencement Date”—the date on which the fifteen-year term of the lease
commences. It also contained an option for extension if Fresh Grocer notified
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1 The original lease was entered into on March 25, 1999 by Hamilton Square,
predecessor in interest to the Trustees of the University of Pennsylvania
(“Penn”), and Supervalu Operations, predecessor to Walnut Street
Supermarkets, LLC, d/b/a The Fresh Grocer, (“Fresh Grocer”).
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Penn of its intent to renew the lease at least six months prior to the lease
expiring.
Fresh Grocer opened for business on April 20, 2001. Several years later,
Fresh Grocer filed a complaint against Penn concerning outstanding
construction issues. On June 28, 2007, the parties entered into a settlement
agreement and signed an omnibus amendment to the lease.
Fresh Grocer notified Penn of its intent to renew the lease on February
29, 2016. Penn rejected the renewal, claiming that, based on the April 20,
2001 commencement date, the attempted renewal was not within the six-
month period before the lease expired on April 30, 2016.
Fresh Grocer filed a complaint against Penn arguing that the
Commencement Date of the fifteen-year term of the lease was June 28, 2007
(the date of the settlement agreement); therefore, the notice of intent to
extend was timely, or, in the alternative, that Penn was equitably estopped
from denying Fresh Grocer’s renewal.2 The trial court granted Penn’s motion
for summary judgment, finding that the Commencement Date of the lease
was April 20, 2001, and that Fresh Grocer’s renewal was untimely.
Fresh Grocer appealed the court’s order, arguing that the court 1) erred
in determining the Commencement Date, 2) erred in failing to hold that the
lease provision was ambiguous concerning the commencement date, and
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2 Penn counterclaimed for damages, possession, and attorney’s fees.
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3) erred in rejecting the claim that Penn was equitably estopped from denying
the renewal request as untimely.3 We conclude that based on the
unambiguous terms of the lease, the Commencement Date was April 20,
2001, when Fresh Grocer opened for business, and Penn was not estopped
from denying the renewal request. Therefore, we affirm.
Fresh Grocer’s three issues all raise challenges to the trial court’s
interpretation of the lease when the court granted summary judgment to
Penn.
When reviewing a trial court’s grant of summary judgment, our
standard and scope of review are as follows:
Our scope of review is plenary, and our standard of
review is the same as that applied by the trial court.
Our Supreme Court has stated the applicable standard
of review as follows: An appellate court may reverse
the entry of a summary judgment only where it finds
that the lower court erred in concluding that the
matter presented no genuine issue as to any material
fact and that it is clear that the moving party was
entitled to a judgment as a matter of law. In making
this assessment, we view the record in the light most
favorable to the non-moving party, and all doubts as
to the existence of a genuine issue of material fact
must be resolved against the moving party. As our
inquiry involves solely questions of law, our review is
de novo.
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3 The trial court granted Penn’s motion for summary judgment dismissing
Fresh Grocer’s claims, but deferred ruling on Penn’s claim for possession.
Despite the fact that the trial court’s ruling was not a final order, pursuant to
the Declaratory Judgment Act, 42 Pa.C.S.A. § 7532, it is defined as a final
order because it affirmatively declared the rights of the parties. See
Nationwide Mut. Ins. Co. v. Wickett, 763 A.2d 813, 817 (Pa. 2000).
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Birdie Assocs., Ltd. P’ship v. CNX Gas Co., LLC, 149 A.3d 367, 371 (Pa.
Super. 2016) (citations omitted). Furthermore, “when reviewing an issue of
law in a declaratory judgment action, our scope of review is plenary and our
standard of review is de novo.” Missett v. Hub Int’l Pa., LLC, 6 A.3d 530,
534 (Pa. Super. 2010) (citation omitted).
In its first issue, Fresh Grocer claims that the trial court erred when it
granted Penn’s motion for summary judgment because the renewal notice
which Fresh Grocer gave Penn was timely. Specifically, it argues that the court
erred in holding that the lease term commenced April 20, 2001. Fresh Grocer
contends that, based on the plain language of the lease, because the parcel
pickup area of the parking garage did not operate as intended, the lease did
not commence until the parties signed the June 28, 2007 lease agreement.
See Fresh Grocer’s Brief, at 40-52. We disagree.
The fundamental rule in interpreting the meaning of a contract is
to ascertain and give effect to the intent of the contracting parties.
The intent of the parties to a written agreement is to be regarded
as being embodied in the writing itself. The whole instrument must
be taken together in arriving at contractual intent. Courts do not
assume that a contract’s language was chosen carelessly, nor do
they assume that the parties were ignorant of the meaning of the
language they employed. When a writing is clear and unequivocal,
its meaning must be determined by its contents alone.
Murphy v. Duquesne Univ. of the Holy Ghost, 777 A.2d 418, 429 (Pa.
2001) (citations omitted).
At issue are specific provisions of the lease addressing the
Commencement Date, which provide as follows:
1.01 Certain Defined Terms. As used herein, the term:
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(e) “Commencement Date” means the date on which the Term of
this Lease commences and shall be the date on which Landlord
delivers the Premises to Tenant (the “Delivery Date”) as defined
in Section 2.05 hereof.
* * *
2.05 Commencement Date.
(a) The Term of this Lease shall commence on the date
(“Commencement Date”) on which the Landlord delivers the
Premises to Tenant with a certificate of occupancy for the
Landlord’s Work (unless Landlord is unable to obtain such
certificate of occupancy because Tenant’s Work is not complete or
because of some deficiency in or code violation relating to Tenant’s
Work) (the “Delivery Date”) provided, however, that the
Commencement Date shall be deferred until such time as the
Garage, including parcel pick-up areas and elevators is completed
and open for operation. Landlord or Tenant shall, within ten days
after request of the other party, confirm by appropriate
instrument in form satisfactory to Landlord and Tenant, the
Commencement Date and expiration of the Term of this Lease,
and any extension options set forth herein. Except as otherwise
explicitly set forth herein, Landlord and Tenant acknowledge and
agree that the Building is a project that is not yet constructed and
therefore no representation warranty or promise has or is being
made as to the actual Delivery Date, and Tenant is not acting in
reliance on any estimate thereof made herein or to be made at
any time in the future.
* * *
8.08 Effect of Opening for Business. By opening the Premises for
business, Tenant shall be deemed to have (a) accepted the
Premises, (b) acknowledged that the Premises are ready and
suitable for occupancy hereunder and that whatever certificates
of occupancy or other permits are required for operation have
been obtained and paid for by Tenant, . . . (e) acknowledged that
the Commencement Date has occurred. . . .
Lease, 3/25/1999, at §§ 1.01(e), 2.05(a), 8.08.
Upon review, we conclude that based on the plain language of the lease,
the parties intended the Commencement Date to be the date Fresh Grocer
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was able to open for business. Paramount to our interpretation is the intention
of the parties, which, here is clearly to define the Commencement Date to
coincide with Fresh Grocer being able to open for business and operate the
premises as a grocery store—the ultimate objective of the contract.
The plain language of sections 1.01(e) and 2.05(a), when read together,
describes the Commencement Date as the date when Penn delivers the
property to Fresh Grocer for it to operate as a grocery. Additionally, section
8.08 specifically provides that, by opening the premises for business, Fresh
Grocer acknowledged that the Commencement Date occurred.
Considering the actions of the parties, and when read together with the
other sections of the lease, the provision in section 2.05(a) concerning deferral
of the Commencement Date until completion of the garage, does not change
our interpretation. Fresh Grocer had the opportunity to defer its opening while
awaiting resolution of issues with the garage, yet it chose to open for business
on April 20, 2001. Hence, the trial court did not err in concluding that the
Commencement Date was April 20, 2001, the date when Fresh Grocer opened
for business. Fresh Grocer’s first issue does not merit relief.
In its second issue, Fresh Grocer requests that this Court find the lease
agreement ambiguous on the issue of the Commencement Date. It asks that
we remand for a new trial judge to consider parol evidence on the issue, as
Fresh Grocer contends the currently assigned judge is unlikely to be impartial.
See Appellant’s Brief, at 54.
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A review of Fresh Grocer’s Pa.R.A.P. 1925(b) statement of errors
complained of on appeal does not reveal any use of the word “ambiguous,”
nor does it reveal any request for reassignment of the trial judge. Under these
circumstances, we conclude that Fresh Grocer has waived these arguments.
See Pa.R.A.P. 1925(b)(4)(vii); see also Andrews v. Cross Atl. Capital
Partners, Inc., 158 A.3d 123, 129 (Pa. Super. 2017).
In its final issue, Fresh Grocer contends that the trial court erred in not
holding that Penn was equitably estopped from denying its renewal notice.
Fresh Grocer argues that the Settlement Agreement, signed in June 2007,
contained a provision giving it reduced rent for ten years, and set forth a loan
from Penn to Fresh Grocer payable over a ten-year period. It claims that it
relied on these provisions for its belief that the lease would last until June
2017, and the renewal notice was not due until December 2016. Therefore, it
claims the court erred in granting Penn’s motion for summary judgment and
dismissing the equitable estoppel claim. We disagree.
Equitable estoppel arises when a party by acts or representation
intentionally or through culpable negligence, induces another to
believe that certain facts exist and the other justifiably relies and
acts upon such belief, so that the latter will be prejudiced if the
former is permitted to deny the existence of such facts.
Guerra v. Redevelopment Auth. of Phila., 27 A.3d 1284, 1290 (Pa. Super.
2011) (citation omitted).
Here, the court found that Fresh Grocer’s allegations were not sufficient
to establish a prima facie case that Penn intentionally or negligently induced
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Fresh Grocer to not timely renew its lease. We discern no error in the court’s
legal conclusion.
The loan and reduced rent are circumstances independent of the lease’s
provision for renewal. Penn’s actions in giving reduced rent for ten years and
making a loan payable over a ten-year period were neither intentionally nor
negligently designed to induce Fresh Grocer into believing the Commencement
Date occurred in 2007. Had Fresh Grocer timely notified Penn of its intent to
renew, it would have been able to take advantage of the full ten years of
reduced rent. Fresh Grocer is correct that the 2007 Settlement Agreement
contained a ten-year period for the loan and reduced rent; however, this does
not estop Penn from refusing to accept Fresh Grocer’s late lease renewal.
Fresh Grocer’s final claim does not merit relief.
Order affirmed.
President Judge Emeritus Ford Elliott joins the memorandum.
Judge Olson concurs in the result.
Judgment Entered.
Joseph D. Seletyn, Esq.
Prothonotary
Date: 11/19/19
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