Horsham Towne Associates v. Hurley, J. ( 2018 )

J-A31024-17
NON-PRECEDENTIAL DECISION - SEE SUPERIOR COURT I.O.P. 65.37
HORSHAM TOWNE ASSOCIATES AND : IN THE SUPERIOR COURT OF
575 HORSHAM ROAD OWNER, LLC : PENNSYLVANIA
:
:
v. :
:
:
JOHN HURLEY, T/A EDIBLES :
RESTAURANT AND PUB : No. 1555 EDA 2017
:
Appellant :
Appeal from the Judgment Entered April 19, 2017
In the Court of Common Pleas of Montgomery County Civil Division at
No(s): 2014-04519
BEFORE: PANELLA, J., OLSON, J., and STEVENS*, P.J.E.
MEMORANDUM BY OLSON, J.: FILED MARCH 23, 2018
Appellant, John Hurley, t/a Edibles Restaurant and Pub, appeals from
the judgment entered on April 19, 2017, in favor of Plaintiff Horsham Towne
Associates (hereinafter “Plaintiff”) and against Appellant, in the amount of
$268,228.28. We affirm.
On March 3, 2014, Plaintiff filed a complaint against Appellant,
claiming that Appellant breached the terms of a commercial lease by failing
to pay rent when due. Plaintiff’s Complaint, 3/3/14, at ¶¶ 1-20.
Specifically, Plaintiff averred, it owns the Horsham Square Shopping Center
in Horsham, Pennsylvania and, in November 2004, it began leasing
commercial property to Appellant. Id. at ¶¶ 1-5. Plaintiff claimed that
Appellant failed to pay rent when due and that, as of the filing of the
complaint, Appellant owed Plaintiff $205,696.89. Id. at ¶ 11. Further,
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* Former Justice specially assigned to the Superior Court.
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Plaintiff claimed that it demanded that Appellant surrender the premises, but
Appellant refused and, thus, unpaid rent continues to accrue. Id. at ¶¶ 13-
14.
Plaintiff’s complaint contained two counts: breach of lease and
demand for possession. With respect to the claims, Plaintiff sought
“judgment in the full amount due and owing . . . plus rent that continues to
accrue as well as [attorneys’] fees and costs” and possession of the
leasehold to the exclusion of Appellant. See id. at ¶¶ 10-20.
After the trial court overruled Appellant’s preliminary objections,
Appellant filed an answer, new matter, and counterclaim. Within the
answer, Appellant generally denied that it was in breach of the lease
agreement and that it “failed to make payments when due.” See Appellant’s
Answer, New Matter, and Counterclaim, 7/2/14, at ¶¶ 8 and 10. Moreover,
in response to Plaintiff’s averment that, “[a]s of the date of this complaint,
[Appellant] owes $205,696.89,” Appellant simply answered: “Denied.
[Appellant] does not owe to the Plaintiff [$205,696.89].” See Plaintiff’s
Complaint, 3/3/14, at ¶ 11; Appellant’s Answer, New Matter, and
Counterclaim, 7/2/14, at ¶ 11.
Appellant’s counterclaim alleged that Plaintiff had “committed fraud
because prior to the signing of the lease [Appellant] made inquiries of []
Plaintiff of the non-competition clause contained in the subject lease.”
Appellant’s Answer, New Matter, and Counterclaim, 7/2/14, at ¶ 2 (some
internal capitalization omitted). Appellant claimed that, “as a direct and
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proximate result of [Plaintiff’s fraudulent statements, Appellant] was sued by
DeVenuto Restaurant, Inc. for violating [] Plaintiff’s lease with Via Vento
Restaurant with regard to its covenant not to compete.” Id. at ¶ 7. In
doing so, Appellant claimed, Plaintiff breached the covenant of quiet
enjoyment in the lease and was liable to it for the tort of fraudulent
representation. Id. at ¶¶ 1-7.
Plaintiff answered Appellant’s counterclaim. In response to Appellant’s
claim that Plaintiff breached the covenant of quiet enjoyment in the lease
and committed fraud, Plaintiff answered:
Denied as conclusion of law to which no response is
required. By further response, it is specifically denied that
Plaintiff has committed fraud. Any mention or possible
notion of fraud upon information and belief harkens back to
a lawsuit filed in 2005 to which Plaintiff and [Appellant]
were named as defendants. That suit and all claims,
counterclaims, and cross claims among all of the parties to
the suit, including Plaintiff and [Appellant] in this case, have
been settled in a confidential settlement agreement dated
April 10, 2006. The signature page containing the
signatures of Plaintiff and [Appellant] is attached [to the
pleading].
Furthermore, and in addition to this otherwise frivolous
averment and claim, [Appellant] is mixing contract and tort
claims for no good or legitimate reasons other than to delay
resolution of this case. Finally, if the settlement agreement
does not cut off any possible counterclaims, certainly, the
two-year statutes of limitations to fraud bars suit almost
eight years after the same allegations were raised and
settled and subject to the doctrine of res judicata.
Accordingly, the averment is frivolous and subject to
sanctions.
Plaintiff’s Answer to Counterclaim, 7/24/14, at ¶ 2.
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On October 14, 2014, Plaintiff filed a motion for judgment on the
pleadings and claimed that it was entitled to judgment in its favor because
Appellant generally denied that it was in breach of the lease agreement and,
thus, admitted to the breach, and because Appellant’s counterclaims were
frivolous. See Plaintiff’s Motion for Judgment on the Pleadings, 10/14/14, at
¶¶ 11-20; Plaintiff’s Memorandum of Law in Support of Motion, 10/14/14, at
1-7.
On February 23, 2015, the trial court granted, in part, Plaintiff’s
motion for judgment on the pleadings. In particular, the trial court: granted
Plaintiff’s motion on the issue of Appellant’s liability for breach of contract;
dismissed Appellant’s counterclaims; and, declared that it would schedule a
hearing to assess the amount of damages at a later date. Trial Court Order,
2/23/15, at 1.
On May 31, 2016, Appellant filed a “Petition to Substitute Transferee
as Plaintiff” (hereinafter “Appellant’s Petition”). Within the petition,
Appellant averred that, in July 2014, Plaintiff assigned “all of its rights,
including but not limited to all rents, issues and profits, under the subject
lease” to an entity named 575 Horsham Road Owner, LLC (hereinafter “575
Horsham”). Appellant’s Petition, 5/31/16, at ¶ 3. Appellant claimed that, as
a result of this transfer, Plaintiff “no longer has any claim against
[Appellant]” and that the trial court “should substitute 575 Horsham [] as
party plaintiff.” Id. at ¶¶ 6-8 (some internal capitalization omitted).
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On November 29, 2016, the trial court entered an order that granted
Appellant’s Petition in part. Specifically, the trial court ordered that 575
Horsham was joined – but not substituted – as plaintiff in the action. Trial
Court Order, 11/29/16, at 1.
The trial court held the assessment of damages hearing on November
30, 2016. During the hearing, the trial court heard testimony that, up until
the date that Plaintiff transferred the property to 575 Horsham, Appellant
owed to Plaintiff: $174,705.99 in unpaid rent; $44,075.00 in late fees; and
$48,583.26 that accrued at the conclusion of an “agreed abatement.” N.T.
Damages Hearing, 11/30/16, at 27-29 and 33-34.
At the end of the hearing, the trial court concluded that Appellant was
liable to Plaintiff in the total amount of $268,228.28. See Trial Court
Decision, 12/13/16, at 1; see also Amended Trial Court Decision, 1/9/17, at
1. The trial court’s amended decision reads:
AND NOW, this [9th] day of January, 2017, it is hereby ORDERED
that . . . judgment is awarded in favor of Plaintiff and against
[Appellant] as follows:
Unpaid rent due under lease [] $174,705.99
Amount due after agreed abatement ended [] 48,583.26
Late fees (9/1/09 to 6/30/14) [] 44,075.00
Amount of costs 864.03
For a combined judgment of $268,228.28
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In accordance with 42 Pa.C.S.A. § 8101, interest shall accrue on
$268,224.28 at the lawful rate from the date of the verdict until
the judgment is paid by [Appellant].
Trial Court Amended Decision, 1/9/17, at 1 (some internal capitalization
omitted).
The trial court denied Appellant’s timely post-trial motion on January
24, 2017 and, on April 19, 2017, judgment was entered on the verdict.
Appellant filed a timely notice of appeal on May 15, 2017. Appellant raises
two claims on appeal:
[1.] Did the [trial] court [] commit reversible error and
abuse its discretion in granting judgment on the pleadings
on the issue of liability of [Appellant] to Plaintiff?
[2.] Did the [trial] court [] commit reversible error and
abuse its discretion in denying [Appellant’s] motion to
dismiss and refusing to permit [Appellant] to put on a
defense at trial, which defense would have demonstrated
both that Plaintiff [] had assigned and transferred all of its
rights under the subject lease to 575 Horsham [] and that
the action was barred as against both [p]laintiffs on the
basis of res judicata and collateral estoppel?
Appellant’s Brief at 4 (some internal capitalization omitted).1
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1 Appellant filed a separate appeal from the April 19, 2017 judgment and we
docketed this separate appeal at 241 EDA 2017. The appeal docketed at
241 EDA 2017 is duplicative of the current appeal, as the appeal lies from
the same April 19, 2017 judgment and, within Appellant’s brief at that
appeal, Appellant raises the same substantive claims that he raises in the
current appeal. We have thus quashed the appeal at 241 EDA 2017 as
duplicative of the current appeal.
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First, Appellant contends that the trial court erred when it granted
Plaintiff’s motion for judgment on the pleadings as to the issue of Appellant’s
liability. This claim fails.
We have explained:
Judgment on the pleadings is permitted under Pennsylvania
Rule of Civil Procedure 1034, which provides that “after the
pleadings are closed, but within such time as not to
unreasonably delay trial, any party may move for judgment
on the pleadings.” Pa.R.C.P. 1034(a). A motion for
judgment on the pleadings is similar to a demurrer. It may
be entered when there are no disputed issues of fact and
the moving party is entitled to judgment as a matter of law.
Appellate review of an order granting judgment on the
pleadings is plenary and we apply the same standard
employed by the trial court. Our review is confined to the
pleadings and relevant documents. We must accept as true
all well pleaded statements of fact, admissions, and any
documents properly attached to the pleadings presented by
the party against whom the motion is filed, considering only
those facts that were specifically admitted. We will affirm
the grant of such a motion only when the moving party's
right to succeed is certain and the case is so free from
doubt that the trial would clearly be a fruitless exercise.
McLafferty v. Council for the Ass’n of Owners of Condo. No. One,
Inc., 148 A.3d 802, 806-807 (Pa. Super. 2016) (some internal citations
omitted).
Appellant claims that the trial court erred in granting Plaintiff judgment
on the pleadings solely because: “Plaintiff sold the leased premises to [575
Horsham] on July 1, 2014. In doing so, it transferred all of its rights under
the lease to [575 Horsham]. Because of this[, Plaintiff] . . . no longer has
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any claim against [Appellant] under the lease agreement.” Appellant’s Brief
at 19 (some internal capitalization omitted).
Appellant’s claim on appeal immediately fails, as Appellant has not
cited to any contractual provision between Plaintiff and 575 Horsham that
assigned Appellant’s lease (or the right to collect the unpaid rent and fees
that Appellant owed to Plaintiff) from Plaintiff to 575 Horsham. See
Appellant’s Brief at 18-23. Indeed, Appellant has not cited to anything that
would prohibit Plaintiff from recovering the unpaid rent and fees that
Appellant owed to Plaintiff during the time that Plaintiff was the owner and
lessor of the land. See id. To be sure, the trial court noted:
[Appellant] argues that after this lawsuit began, ownership
of the property was transferred. This court does not find
that any such transfer is relevant to [Appellant’s] obligation
to pay rent owed to Plaintiff. The new owner, 575 Horsham
. . . [,] was joined in this lawsuit. Joseph Ventresca, a
representative of the new owner, 575 Horsham . . . ,
appeared at the hearing on November 30, 2017 and made
no objection to the relief sought by Plaintiff. Indeed, on
January 11, 2017, 575 Horsham . . . filed a response
opposing [Appellant’s] request for post trial relief.
Trial Court Opinion, 6/23/17, at 4 n.6 (some internal capitalization omitted).
Thus, Appellant’s first claim on appeal cannot succeed.
For Appellant’s second and final claim on appeal, Appellant contends
that the trial court erred when it “den[ied Appellant’s] motion to dismiss and
refus[ed] to permit [Appellant] to put on a defense at trial.” Appellant’s
Brief at 23. According to Appellant, his defense “would have demonstrated
both that Plaintiff [] had assigned and transferred all of its rights under the
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subject lease to 575 Horsham [] and that the action was barred as against
both plaintiffs on the basis of res judicata and collateral estoppel.” Id.
As we have held:
the doctrines of res judicata and collateral estoppel . . .
serve to preclude the litigation, respectively, of claims and
issues that have previously been litigated.
Where there has previously been rendered a final judgment
on the merits by a court of competent jurisdiction, the
doctrine of res judicata will bar any future suit on the same
cause of action between the same parties. Invocation of
the doctrine of res judicata (claim preclusion) requires that
both the former and latter suits possess the following
common elements:
1. identity in the thing sued upon;
2. identity in the cause of action;
3. identity of persons and parties to the action; and
4. identity of the capacity of the parties suing or being
sued.
Collateral estoppel (issue preclusion) is closely related to res
judicata, but bears certain distinctions[.]
. . . [T]he doctrine of res judicata, subsumes the more
modern doctrine of issue preclusion which forecloses re-
litigation in a later action, of an issue of fact or law which
was actually litigated and which was necessary to the
original judgment. Collateral estoppel applies if (1) the issue
decided in the prior case is identical to one presented in the
later case; (2) there was a final judgment on the merits; (3)
the party against whom the plea is asserted was a party or
in privity with a party in the prior case; (4) the party or
person privy to the party against whom the doctrine is
asserted had a full and fair opportunity to litigate the issue
in the prior proceeding and (5) the determination in the
prior proceeding was essential to the judgment.
Collateral estoppel does not require identity of causes of
action or parties. However, while res judicata will bar
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subsequent claims that could have been litigated in the prior
action, but which actually were not, collateral estoppel will
bar only those issues that actually were litigated in the prior
proceeding.
Chada v. Chada, 756 A.2d 39, 42-43 (Pa. Super. 2000) (some internal
quotations and citations omitted).
In essence, Appellant claims that a later suit – that 575 Horsham filed
against Appellant, in October 2014, to recover unpaid rent that Appellant
owed to 575 Horsham – barred Plaintiff’s current lawsuit against Appellant
that Plaintiff filed on March 3, 2014. Appellant’s Brief at 26. This argument
fails.
In 575 Horsham’s suit against Appellant, 575 Horsham filed suit to
collect the $10,200.00 in unpaid rent that Appellant owed 575 Horsham after
575 Horsham became the owner of the property, while Appellant was still a
holdover on the premises. See, e.g., Landlord and Tenant Complaint,
10/28/14, at 1. In the case at bar, Plaintiff sued Appellant to recover the
$174,705.99 in unpaid rent (and additional, other fees) that Appellant owed
to Plaintiff through the end of June 2014 – or, until Plaintiff sold the
premises to 575 Horsham. Thus, res judicata does not bar Plaintiff’s suit
against Appellant, as there is neither an identity of the parties nor an
identity of “the thing sued upon.” See Chada, 756 A.2d at 42-43. Further,
collateral estoppel does not shield Appellant from suit, as “the issue decided
in the prior case” (the unpaid rent Appellant owed 575 Horsham from July
2014 onward) was not identical to the issue presented in the case at bar
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(the unpaid rent Appellant owed Plaintiff during the time Plaintiff owned the
premises). Id. Appellant’s claim on appeal thus fails.
Judgment affirmed. Jurisdiction relinquished.
Judgment Entered.
Joseph D. Seletyn, Esq.
Prothonotary
Date: 3/23/18
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