One Penn Asso. v. Wasser, N. ( 2016 )

J-A11015-16
NON-PRECEDENTIAL DECISION - SEE SUPERIOR COURT I.O.P. 65.37
ONE PENN ASSOCIATES LP, IN THE SUPERIOR COURT OF
PENNSYLVANIA
Appellee
v.
NANCY WASSER AND JOHN M.
CORCORAN,
Appellants No. 1844 EDA 2015
Appeal from the Order Entered May 12, 2015
In the Court of Common Pleas of Philadelphia County
Civil Division at No(s): April Term, 2014, No. 2169
BEFORE: SHOGAN, MUNDY, and FITZGERALD,* JJ.
MEMORANDUM BY SHOGAN, J.: FILED JULY 15, 2016
Appellants, Nancy Wasser and John M. Corcoran, appeal from the
order entered May 12, 2015, that reinstated judgment entered pursuant to
the complaint in confession of judgment and denied Appellants’ petition to
strike judgment. We affirm.
The trial court set forth the facts of this case as follows:
On June 17, 1992, Nancy Wasser and John M. Corcoran
entered into a commercial lease (“Lease”) with Richard I. Rubin
& Company, Inc. as agents for Suburban Station Associates, L.P.
Ms. Wasser and Mr. Corcoran are both attorneys and rented
commercial space on the 11th Floor of One Penn Center located
at 1617 John F. Kennedy Boulevard [in Philadelphia] for a law
office for a term of five years.
____________________________________________
*
Former Justice specially assigned to the Superior Court.
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On March 27, 1997, Ms. Wasser and Mr. Corcoran entered
into a First Amendment to Lease with Suburban Station
Associates which provided for an expansion of the commercial
premises and extended the term of the [L]ease through February
28, 2002. The First Amendment to Lease also reflected an
increase in the minimum rental payment to $2,470.67 per
month. The First Amendment to Lease provided that “[t]he right
to enter judgment or judgments by confession . . . may be
exercised by an assignee of Landlord’s right, title, and interest in
the Lease.” (First Amend. To Lease ¶ 5(c)).
In early 20021, Ms. Wasser and Mr. Corcoran entered into
a Second Amendment to Lease with Suburban Station Associates
which extended the term of the Lease through February 28,
2007. The Second Amendment to Lease also reflected an
increase in the minimum rental payment to $3,052.00 per
month. The Second Amendment to Lease provided that “the
terms, covenants, and conditions contained in this Amendment
shall bind and inure to the benefit of the parties hereto and their
respective successors and permitted assigns.” (Second Amend.
To Lease ¶ 11).
1
The specific date the Second Amendment to Lease
was signed was not documented on the instrument.
On December 31, 2002, One Penn Associates, L.P. [(“One
Penn”)] purchased 1617 John F. Kennedy Boulevard from
Suburban Stations Associates, L.P. On December 31, 2006, Ms.
Wasser and Mr. Corcoran entered into a Third Amendment to
Lease with One Penn Associates which extended the term of the
Lease through February 28, 2014. The Third Amendment to
Lease also reflected an increase in the minimum rental payment
to $3,270.00 per month. The Third Amendment to Lease
provided that “[t]he right to enter judgment or judgments by
confession . . . may be exercised by any assignee of Landlord’s
right, title, and interest in this Lease.” (Third Amend. To Lease ¶
6).
On September 12, 2013, Ms. Wasser requested for the
Lease to be prematurely terminated. At some point in December
2013, Ms. Wasser and Mr. Corcoran vacated the premises.
Consequently, Ms. Wasser and Mr. Corcoran did not pay the
monthly rent for January 2014 and February 2014. On February
25, 2014, One Penn Associates LP notified Ms. Wasser and Mr.
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Corcoran of the default and requested immediate payment of
past due monthly rent. One Penn Associates LP now asserts that
because Ms. Wasser and Mr. Corcoran are in default of the terms
of the Lease it is permitted to recover under the Confession of
Judgment clause in the Lease.
Trial Court Opinion, 11/14/14, at 1-3.
The trial court summarized the procedural history of this case as
follows:
On April 21, 2014, [One Penn] filed a complaint in
confession of judgment against Nancy Wasser and John M.
Corcoran (hereinafter “Appellants”). [One Penn] alleged that
[One Penn] and Appellants entered into a commercial lease on
December 31, 2006 for office space on the 11th Floor of 1617
John F. Kennedy Boulevard, Philadelphia, PA. [One Penn]
averred that Appellants breached the lease, triggering the
lease’s Confession of Judgment clause. [One Penn] alleged that
Appellants failed to pay rent, taxes, and late fees, owing [One
Penn] $7,694.49, including attorney’s fees.[1]
On June 26, 2014, Appellants filed a Petition to Strike
Judgment Entered by Confession. [One Penn] did not file a
response to Appellants’ Petition to Strike Judgment Entered by
Confession.[2] On September 24, 2014, [the trial court] entered
an order granting Appellants’ Petition to Strike Judgment Entered
by Confession.1 On September 26, 2014, [One Penn] filed a
Motion for Reconsideration regarding [the trial court’s]
September 24, 2014 Order. On October 1, 2014, [the trial
court] denied [One Penn’s] Motion for Reconsideration. On
October 7, 2014, [One Penn] filed a timely appeal. Statements
of Matters Complained of on Appeal were requested and properly
tendered on October 24, 2014.
____________________________________________
1
The confession of judgment was entered that same day.
2
Despite this assertion by the trial court, the record reflects that on July 16,
2014, One Penn filed a response in opposition to the motion to strike.
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1
[The trial court’s] September 24, 2014 Order was
signed on September 22, 2014.
On November 14, 2014, [the trial court] issued a 1925(a)
Opinion stating that [it] erred in granting Appellants’ Petition to
Strike Judgment Entered by Confession and denying [One
Penn’s] Motion for Reconsideration.
On January 13, 2015, the Superior Court remanded the
matter to [the trial court] and relinquished jurisdiction.[3]
On February 12, 2015, [the trial court] vacated both the
September 22, 2014 Order granting Appellants’ Petition to Strike
Judgment Entered by Confession and the October 1, 2014 Order
denying [One Penn’s] Motion for Reconsideration. Additionally,
[the trial court] reinstated the Complaint that was entered in
Confession of Judgment on April 21, 2014.
On May 12, 2015, [the trial court] amended the February
12, 2015 Order to reflect that the September 22, 2014 Order
granting Appellants’ Petition to Strike Judgment Entered by
Confession, having been vacated on February 12, 2015, was
denied. The May 12, 2015 Order also reflected that the
Judgment pursuant to the Complaint entered in Judgment was
reinstated.
On June 11, 2015, Appellants filed a timely appeal.
____________________________________________
3
The per curiam order issued by the Superior Court stated as follows:
Upon consideration of the memorandum opinion of the
Honorable George W. Overton, dated November 14, 2014, this
matter is hereby REMANDED to the trial court.
Jurisdiction is relinquished.
One Penn Associates, L.P. v. Wasser, 3036 EDA 2014, Order (Pa. Super.
filed January 13, 2015).
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Trial Court Opinion, 7/21/15, at 1-3. Both the trial court and Appellants
complied with Pa.R.A.P. 1925.
Appellants present the following issues for our review:
(1) Did the lower court exceed its jurisdiction when it sua
sponte entered an Amended Order, in violation of 42 Pa.C.S.
§5505, without giving the parties notice or an opportunity to be
heard?
(2) Were [Appellants] denied due process of law when they
were denied a hearing despite the issuance of a Rule to Show
Cause granting them a hearing?
(3) Should the lower court have granted [Appellants’] petition
to strike the judgment entered by confession as there was no
assignment?
(4) Should the court below have granted the petition to strike
judgment by confession where there were defects on the face of
the record?
(5) Should the court below have granted the petition to strike
judgment entered by confession where the Complaint set forth
grossly excessive amounts and included recovery for items not
permitted in the Lease?
(6) Does this court have jurisdiction as this is a timely appeal
from a final order?
Appellants’ Brief at 3.
We shall address Appellant’s final issue first and consider One Penn’s
argument regarding this Court’s jurisdiction to hear this appeal. See
Morningstar v. Hoban, 819 A.2d 1191, 1194 (Pa. Super. 2003) (explaining
that we lack jurisdiction to consider the merits of an untimely appeal.). One
Penn filed an application to quash this appeal on the basis that Appellants’
appeal is untimely. Application to Quash Appeal, 8/7/15, at 6. On
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September 23, 2015, this Court filed an Order denying the motion to quash
the appeal without prejudice to the moving party’s right to again raise the
issue before the merits panel. In their brief, One Penn contends that the
order issued by the trial court on February 12, 2015, was the final
appealable order, and that Appellants were required to appeal from that
order. Id. at 7-8. Thus, it is their position that the notice of appeal filed by
Appellants on June 11, 2015, was untimely. Id.
Of relevance is the language of the orders issued. The trial court’s
order issued February 12, 2015, provides as follows:
AND NOW, this 12th day of February, 2015, upon consideration
of the Superior Court order dated January 13, 2015, it is hereby
ORDERED that the Order dated September 22, 2014 granting
[Appellants’] Petition to Strike Judgment Entered by Confession
is VACATED. It is further Ordered that the Order dated October
1, 2014 denying [One Penn’s] Motion for Reconsideration is
VACATED. The Complaint entered in Confession of Judgment
on April 21, 2014 is hereby REINSTATED.
Order, 2/12/15, at 1.
The May 12, 2015 order provides as follows:
The Order dated September 22, 2014 granting [Appellants’]
Petition to Strike Judgment Entered by Confession is VACATED.
It is further ORDERED that [Appellants’] Petition to Strike
Judgment Entered by Confession is DENIED; and
The Judgment pursuant to the Complaint in Confession of
Judgment is hereby REINSTATED.
Order, 5/12/15, at 1.
Thus, judgment was not reinstated until issuance of the May 12, 2015
order. The February 12, 2015 order simply reinstated the complaint in
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confession of judgment. As such, the May 12, 2015, order was the final
appealable order. Because Appellants filed a notice of appeal within thirty
days of the entry of judgment, the appeal is timely, and this Court has
jurisdiction to consider it. See Taxin v. Shoemaker, 799 A.2d 859, 860
(Pa. Super. 2002) (A notice of appeal must be filed within thirty days of
entry of the judgment.)
We next consider Appellants’ first and second issues raised on appeal.
Despite listing these issues separately, Appellants address them together in
their brief. As the issues are inter-related, we too shall address them
together.
Appellants argue that they were denied due process because they
were not afforded the opportunity to be heard on their petition to strike at a
hearing. Appellants’ Brief at 11. Appellants contend that the August 12,
2014 Rule to Show Cause, which also scheduled a hearing, entitled them to
a hearing. Id. When the case was remanded, Appellants posit, the parties
awaited the scheduling of a hearing based on the August 12, 2014 Rule to
Show Cause, and because the February 12, 2015 order simply reinstated the
complaint in confession of judgment. Id. Appellants contend that when, on
May 12, 2015, without notice to either party, the trial court sua sponte
entered judgment, the trial court violated Appellants’ rights to due process.
Id. Appellants further contend that the trial court’s actions disregarded 42
Pa.C.S. § 5505. Id.
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We first note that 42 Pa.C.S. § 5505 provides as follows:
Except as otherwise provided or prescribed by law, a court
upon notice to the parties may modify or rescind any order
within 30 days after its entry, notwithstanding the prior
termination of any term of court, if no appeal from such order
has been taken or allowed.
42 Pa.C.S. § 5505. As the trial court aptly recognized, however,
this rule must be read in conjunction with the inherent power of
the courts to amend its records, to correct mistakes of the clerk
or other officer of the court, inadvertencies of counsel, or supply
defects or omissions in the record, even after the lapse of the
term. This power is reflected in Rule 1701(b)(1) of the Rules of
Appellate Procedure. Pa.R.A.P. 1701(b)(1).
Manack v. Sandlin, 812 A.2d 676, 680 (Pa. Super. 2002). This Court has
explained, “a court has inherent power ‘to amend its records, to correct
mistakes of the clerk or other officer of the court, inadvertencies of counsel,
or supply defects or omissions in the record’ at any time.” Manufacturers
and Traders Trust Co. v. Greenville Gastroenterology, SC, 108 A.3d
913, 921 (Pa. Super. 2015).
In addressing this issue, the trial court provided a detailed discussion
of its actions. We reproduce the most relevant portion of that explanation
herein, which stated as follows:
In the instant case, there was an obvious need for the
record to be amended to reflect the true intentions of [the trial
court]. The [trial court] thought that by reinstating the
complaint and vacating the Order striking the judgment [in its
February 12, 2015 order], the judgment would be automatically
reinstate[d] as there would have been no valid order striking
that judgment. In coming to this conclusion, [the trial court]
looked to how confessed judgments are stricken or opened. The
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[trial court] used that to determine that if the judgment was not
properly stricken, it would stand as entered by the Prothonotary.
“A confessed judgment will be stricken [‘]only if a fatal
defect or irregularity appears on the face of the record.[’]”
Graystone Bank v. Groves Estates, LP, 58 A.3d 1277(Pa.Super.2012). A judgment by confession will be opened if the
petitioner acts promptly, alleges a meritorious defense, and
presents sufficient evidence in support of the defense to require
the submission of the issues to a jury. Ferrick v. Bianchini, 2013
PA Super 116, 69 A.3d 642, 647 (2013) (citing Crum v. F.L.
Shaffer Co., 693 A.2d 984 (Pa. Super. 1997)). Having made the
finding that there was no fatal defect on the face of the record
justifying the judgment to be stricken, [the trial court] assumed
that judgment would be valid and effective as of April 21, 2014,
when the Prothonotary entered judgment.
Pursuant to [One Penn’s] Complaint in Confession of
Judgment, the Prothonotary entered Judgment on April 21,
2014. The Docket states “JUDGMENT ENTERED BY CONFESSION
FOR THE SUM OF $7,694.49.” Therefore, upon [the trial court’s]
finding that the confessed judgment should not have been
stricken on September 22, 2014, and upon the [trial court’s]
vacation of the September 22, 2014 Order, the [trial court]
thought the judgment by the Prothonotary was automatically
reinstated after the Order striking it was vacated.
On or around May 12, 2015, the Court of Common Pleas
Trial Division notified [the trial court] that reinstating the
Complaint did not technically reinstate the judgment. The Court
of Common Pleas Trial Division also informed [the trial court]
that even though the September 22, 2014 Order was vacated,
[Appellants’] Petition to Strike Judgment Entered by Confession
would still need to be either granted or denied by [the trial
court]. Consequently, the [trial court] promptly amended the
Order simply to clarify of [sic] the record. [The trial court] did
not make any substantive changes to its original February 12,
2015 Order.
As previously stated, the February 12, 2015 Order
reinstated the Complaint in Confession of Judgment. The May
12, 2015 Amended Order clarified that the confessed judgment,
which had been entered by the Prothonotary on April 21, 2014,
was to be reinstated. The February 12, 2015 Order and the May
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12, 2015 Amended Order were both in accord with the
November 14, 2014 Opinion, which clearly presented the [trial
court’s] finding that [One Penn] had the right to enter judgment
in confession and that the [trial c]ourt had erred by striking the
confessed judgment. The [trial c]ourt explicitly stated in its
November 14, 2014 Opinion that “because the amendments to
the Lease provided for the confession of judgment by successors
in title, [the trial court] erred by granting [Appellants’] Petition
to Strike Judgment Entered by Confession.”
Trial Court Opinion, 7/21/15, at 5-7 (internal citations omitted).
As the trial court described, the May 12, 2015 order was a clarification
of the February 12, 2015 order. The May 12, 2015 order explicitly stated
that the consequence of the trial court’s vacation of the September 22, 2014
order granting Appellants’ petition to strike, was that Appellants’ petition to
strike was denied. Additionally, it clarified that denial of Appellants’ petition
to strike resulted in reinstatement of the judgment in One Penn’s favor.
Thus, the trial court did not violate the strictures of 42 Pa.C.S. § 5505. It
simply utilized its inherent authority to amend the patently obvious mistake
on the record and clarify its intent and resulting consequences when it
vacated Appellants’ petition to strike. Thus, we find no merit to this claim.
Furthermore, and relatedly, we cannot agree that the trial court erred
by failing to grant Appellants a hearing on their petition to strike. First, as
noted, the entry of the May 12, 2015 order was a clarification of the
February 12, 2015 order and the trial court’s decision to deny Appellants’
petition to strike. Thus, Appellants were not entitled to a hearing between
issuance of the February 12, 2015 and May 12, 2015 orders. Secondly,
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Appellants are not entitled to a hearing on their petition to strike a confessed
judgment. As will be discussed in greater detail in addressing Appellants’
subsequent issues, a petition to strike a confessed judgment is based on the
record itself, limited to the complaint in confession of judgment and the
attached exhibits. Hazer v. Zabala, 26 A.3d 1166, 1169 (Pa. Super. 2011).
Thus, given the standard of review, a trial court is not permitted to consider
additional information outside of the record when deciding a petition to
strike a confessed judgment. Consequently, we cannot agree that the trial
court was required to conduct a hearing on Appellants’ petition to strike.
Thirdly, Appellants’ reliance on the trial court’s previous Rule to Show
Cause order as a basis entitling them to a hearing on their petition to strike
is misplaced. As reflected by the record, the trial court indeed issued a Rule
to Show Cause on August 12, 2014. The Rule to Show Cause, however, was
entered upon One Penn to show cause why Appellants’ Petition to Strike
judgment entered by confession should not be granted. Rule to Show
Cause, 8/12/14, at 1. Thus, we cannot agree with Appellants’
characterization that, by issuing this Rule to Show Cause, the trial court
recognized their “right to notice and an opportunity to be heard on their
petition to strike.” Appellants’ Brief at 11. Thus, we find no merit to
Appellants’ claim that they were denied due process “when they were denied
a hearing despite the issuance of a Rule to Show Cause granting them a
hearing.” Appellants’ Brief at 3.
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In their remaining three issues, Appellants assert, for varying reasons,
that the trial court should have granted their petition to strike the confessed
judgment. We begin our discussion by setting forth the principles related to
a petition to strike a confessed judgment.
We observe:
A petition to strike a judgment is a common law
proceeding which operates as a demurrer to the record. A
petition to strike a judgment may be granted only for a fatal
defect or irregularity appearing on the face of the record.
In considering the merits of a petition to strike, the
court will be limited to a review of only the record as
filed by the party in whose favor the warrant is
given, i.e., the complaint and the documents which
contain confession of judgment clauses. Matters
dehors the record filed by the party in whose favor
the warrant is given will not be considered. If the
record is self-sustaining, the judgment will not be
stricken.... An order of the court striking a judgment
annuls the original judgment and the parties are left
as if no judgment had been entered.
In other words, the petition to strike a confessed judgment
must focus on any defects or irregularities appearing on the face
of the record, as filed by the party in whose favor the warrant
was given, which affect the validity of the judgment and entitle
the petitioner to relief as a matter of law. The record must be
sufficient to sustain the judgment. The original record that is
subject to review in a motion to strike a confessed judgment
consists of the complaint in confession of judgment and the
attached exhibits.
In contrast, if the truth of the factual averments contained
in the complaint in confession of judgment and attached exhibits
are disputed, then the remedy is by proceeding to open the
judgment, not to strike it. A petition to strike a confessed
judgment and a petition to open a confessed judgment are
distinct remedies; they are not interchangeable. A petition to
open a confessed judgment is an appeal to the equitable powers
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of the court. Factual disputes by definition cannot be raised or
addressed in a petition to strike off a confession of judgment,
because factual disputes force the court to rely on matters
outside the relevant record to decide the merits of the petition.
Historically, Pennsylvania law has recognized and
permitted entry of confessed judgments pursuant to the
authority of a warrant of attorney contained in a written
agreement. A warrant of attorney is a contractual agreement
between the parties and the parties are free to determine the
manner in which the warrant may be exercised. Entry of a valid
judgment by confession must be made in rigid adherence to the
provisions of the warrant of attorney; otherwise, such judgment
will be stricken. A warrant to confess judgment must be explicit
and will be strictly construed, with any ambiguities resolved
against the party in whose favor the warrant is given. A warrant
of attorney to confess judgment must be self-sustaining and to
be self-sustaining the warrant must be in writing and signed by
the person to be bound by it. The requisite signature must bear
a direct relation to the warrant of attorney and may not be
implied.
Neducsin v. Caplan, 121 A.3d 498, 504-505 (Pa. Super. 2015) (internal
citations and quotation marks omitted).
Appellants first argue that their petition to strike the confessed
judgment should have been granted because there was no assignment of
the Lease from the original landlord, Suburban Station Associates, to One
Penn. Appellants’ Brief at 14. Appellants argue that the Lease, and
subsequent Amendments, were not with One Penn. Id. at 15. Appellants
assert that the only lease between Appellants and One Penn was the Third
Amendment to Lease. Id. at 15. Appellants posit: “In the absence of any
assignment [One Penn] was only entitled to confess judgment for rent.
[One Penn] was not authorized by the only applicable cognovits clause to
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add to its judgment claims for taxes or late fees. Consequently, the amount
of attorney fees included in the judgment are inflated.” Id. at 16.
We first note that Appellants are arguing that the alleged lack of
assignments entitled One Penn to confess judgment only for rent and not
taxes or late fees. Thus, Appellants are not challenging One Penn’s
entitlement to confess judgment for the monthly rent amounts. Accordingly,
we shall focus our analysis on whether the Lease, and its Amendments,
entitled One Penn to confess judgment on related taxes or late fees, which
impact the amount of attorneys’ fees to which it is due.
In addressing a change of ownership in real property and the impact
on any existing lease, this Court has explained:
Ordinarily, where there is a change in the ownership of the
reversion the new owner succeeds to the rights of the lessor.
The rights and remedies reserved in the lease held by . . . . the
former owner of the premises, inured to the benefit of . . . the
new owners, as a matter of law when the property was
transferred to them, even in the absence of a contractual
assignment.
Weitzman v. Ulan, 450 A.2d 173, 177 (Pa. Super. 1982).
Thus, Appellants’ assertion, purportedly in reliance upon 68 P.S. §
250.203, is misplaced. Appellants contend that “no lease of any real
property created for a term of more than three years shall be assigned,
granted or surrendered except in writing signed by the party assigning,
granting or surrendering the same or his agent….” Appellants’ Brief at 15.
Of significance is the additional language omitted from Appellants’ recitation
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of this provision, that further provides: “unless such assigning, granting or
surrendering shall result from operation of law.” 68 P.S. § 250.203.
Accordingly, we conclude that by operation of law, the rights possessed by
the original landlord inured to the benefit of One Penn upon transfer of the
title of the premises, even in the absence of an assignment.
Moreover, in the Third Amendment to the Lease, One Penn and
Appellants explicitly agreed that “the Lease and all the terms, covenants and
conditions thereof shall remain in full force and effect and are hereby ratified
and affirmed.” Third Amendment to Lease, 12/31/06, ¶ 7. As a result,
Appellants have agreed to incorporate the provision of the Lease and the
related Amendments into the Third Amendment.
The Lease includes a section with the heading “RENT.” Lease,
6/17/92, at ¶ 4. The “RENT” section includes several provisions, including
one for “minimum rent,” which is defined by the Lease as follows: “the sum
set forth in subsection 1.F payable in advance on the first business day of
each calendar month in equal monthly installments in the sum specified in
Subsection 1.F beginning on the commencement date and continuing
thereafter until the expiration of said Term.” Id. at ¶ 4.A.
This section also included a provision allowing for collection of a “Late
Charge.” This provision states:
In the event that any sum due to Landlord under the
provisions of this Lease shall not be paid when due, Tenant shall,
upon demand, pay a late charge to Landlord of $.05 for each
dollar so overdue to defray Landlord’s administrative expenses in
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collecting and processing that sum. Such late charge shall be
deemed “rent” for all purposes under this Lease.
Id. at ¶ 4.G. Additionally, a provision for “Use and Occupancy Tax,” was
included under the heading “RENT.” This subsection states the following:
“Tenant shall pay to Landlord any use and occupancy tax (or its equivalent)
imposed on the Premises. Landlord shall have the same rights and remedies
for the non-payment of such use and occupancy tax that it has upon
Tenant’s failure to pay rent hereunder.” Id. at ¶ 4.I. Thus, pursuant to the
terms of the Lease, One Penn was entitled to confession of judgment on the
minimum rent, taxes and late fees. The amount of attorneys’ fees is based
on this calculation, and we cannot agree with Appellants’ claim that the
amount awarded was inflated. Appellants are therefore entitled to no relief
on this basis.
Appellants next argue that the trial court erred in failing to grant its
petition to strike where there were defects apparent on the face of the
complaint. Appellants’ Brief at 17. Appellants offer two reasons for this
position: 1) the original Lease was not between One Penn and Appellants
and 2) the Third Amendment to Lease only permitted a confession of
judgment for rent, and therefore One Penn improperly included charges for
taxes and late fees. Id.
While it is true that the original Lease was not between One Penn and
Appellants, it is uncontested that the Landlord in the original Lease,
Suburban Station Associates, sold the property to One Penn on December
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31, 2002. As noted, when the real property transferred to One Penn, One
Penn succeeded to the interests of Suburban Station Associates. Thus, the
terms of the Lease properly transferred to One Penn. Moreover, as noted, in
the Third Amendment to the Lease, executed by One Penn and Appellants,
the Appellants explicitly agreed that “the Lease and all the terms, covenants
and conditions thereof shall remain in full force and effect and are hereby
ratified and affirmed.” Third Amendment to Lease, 12/31/06, ¶ 7.
Accordingly, Appellants are entitled to no relief on this basis.
Moreover, Appellants’ second basis for recovery under this issue also
fails. Despite their assertions, the Third Amendment to Lease does not
permit a confession of judgment for the monthly rental amount only. The
confession of judgment clause in the Third Amendment to Lease provides, in
relevant part, as follows:
5. CONFESSION OF JUDGMENT – RENT. Tenant covenants
and agrees that if there is an Event of Default, then Landlord
may, without limitation, cause judgments for money to be
entered against Tenant and, for those purposes, Tenant hereby
grants the following warrant of attorney: (i) Tenant hereby
irrevocably authorizes and empowers any prothonotary, clerk of
court, attorney of any court of record and/or Landlord (as well as
someone acting for Landlord) in any and all actions commenced
against Tenant for recovery of the rent and/or other amounts to
be paid to Landlord by Tenant and to appear for Tenant, and
assess damages and confess or otherwise enter judgment
against Tenant, for all or any part of the rent and/or other
amounts to be paid to Landlord by Tenant, together with
interest, costs and an attorneys’ commission of ten (10%) per
cent of the full amount of such rent, amounts and sums, and
thereupon writs of execution as well as attachment may
forthwith issue and be served, without any prior notice, writ or
proceeding whatsoever[.]
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Third Amendment To Lease, 12/31/06, at ¶ 5.
The confession of judgment itself indicates that rent “and/or other
amounts to be paid to Landlord” can be recovered by a confession of
judgment. According to the Lease, which the parties incorporated through
execution of the Third Amendment to Lease, the late charges and taxes
constitute other amounts to be paid to Landlord by Tenant. Indeed, as
noted previously, the language of the original Lease defined the late charges
as “rent” and provided that the Landlord had the same rights and remedies
for the non-payment of tax that it has upon Tenant’s failure to pay rent.
Lease, 6/17/92, ¶¶ 4.G, 4.I. Thus, we cannot agree with Appellants’
assertion that the Third Amendment to Lease permitted a confession of
judgment only to the monthly rent amount. Accordingly, there was no
abuse of discretion by the trial court in denying the petition to strike on this
ground.
In their final issue, Appellants argue that the trial court erred in failing
to grant their petition to strike on the basis that the amount of the confessed
judgment was excessive and included unauthorized items. Appellants’ Brief
at 17. Appellants again assert that the judgment for the late charge and
taxes was inappropriate. Id. Appellants further contend that One Penn
refused to credit Appellants’ security deposit of $1,513.83 or credit an
“overpayment of $705.32.” Id. at 18. As a result, Appellants posit that
$2,674.14 should have been deducted from the confessed judgment. Id.
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J-A11015-16
As previously stated, we have determined that the confession of
judgment properly included late charges and taxes. Thus, we do not agree
that amount was improperly included in the confession of judgment.
With regard to Appellants’ argument that the confession of judgment
should have been offset by the security deposit paid by Appellants, 4 we
observe that the Lease provides as follows, regarding the security deposit:
H. Security Deposit. Upon the execution of this Lease,
Landlord acknowledges receipt from Tenant of the sum set forth
in Subsection 1.I to be held as collateral security for the
payment of any rent payable by Tenant under this Lease, and for
the faithful performance of all other covenants and agreements
of Tenant hereunder. The amount of such deposit, without
interest, shall be repaid to Tenant after the termination of this
Lease and any extension thereof, provided Tenant shall have
made all payments of rent and performed all covenants and
agreements hereunder. Upon any event of default by Tenant
hereunder, all or part of such deposit may, at Landlord’s option,
be applied on account of the resulting deficiency and Tenant
shall immediately restore such deposit to its original sum. The
deposit shall be deemed to be the property of the Landlord.
Lease, 6/17/92, at ¶ 4.H.
As is undisputed, Appellants defaulted under the terms of the Lease.
As written, the provision regarding the security deposit dictates that the
Landlord, in its discretion, may apply the security deposit to the deficiency,
but there is no requirement that it do so. Moreover, the language provides
that the security deposit is deemed the property of the Landlord.
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4
We note that One Penn does not address this assertion.
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J-A11015-16
Accordingly, we cannot agree that the Landlord was required to offset the
amount of the confessed judgment by application of the security deposit.
Additionally, Appellants provide no explanation regarding their claim
that there was an overpayment of $705.32. Appellants’ Brief at 18. We
have no information regarding the context of that alleged overpayment.
Moreover, Appellants have provided no evidence establishing the alleged
overpayment. Accordingly, we find no merit to their assertion that the
confessed judgment should be offset by this alleged overpayment.
Order affirmed.
Judgment Entered.
Joseph D. Seletyn, Esq.
Prothonotary
Date: 7/15/2016
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