Michael's LA Veranda v. Riverstone Riverfront ( 2022 )

J-A21029-21
NON-PRECEDENTIAL DECISION - SEE SUPERIOR COURT I.O.P. 65.37
MICHAEL’S LA VERANDA, INC : IN THE SUPERIOR COURT OF
: PENNSYLVANIA
:
v. :
:
:
RIVERSTONE RIVERFRONT, INC :
:
Appellant : No. 2217 EDA 2020
Appeal from the Order Entered October 20, 2020
In the Court of Common Pleas of Philadelphia County Civil Division at
No(s): No. 200601545
BEFORE: KUNSELMAN, J., NICHOLS, J., and STEVENS, P.J.E.*
MEMORANDUM BY NICHOLS, J.: FILED JANUARY 4, 2022
Appellant Riverstone Riverfront, Inc. appeals from the order denying its
petition to open the confessed judgment entered in favor of Appellee Michael’s
La Veranda, Inc. Appellant claims that it raised a meritorious defense based
on fraudulent nondisclosure. We affirm.
On December 16, 2019, Appellant and Appellee entered into an
agreement of sub-sublease for a property on which Appellee operated a
restaurant (premises). Agreement of Sub-Sublease, 12/16/19, at 1
(hereinafter 2019 sub-sublease).1 The 2019 sub-sublease contained remedies
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* Former Justice specially assigned to the Superior Court.
1Prior to the 2019 sub-sublease at issue in this appeal, Headhouse Associates
and La Veranda Co. entered into the November 19, 1996 sublease (1996
sublease) of the premises for the operation of a restaurant. It appears that
La Veranda Co. assigned its interest under the 1996 sublease agreement to
(Footnote Continued Next Page)
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provisions that permitted Appellee to enter a confessed judgment if Appellant
defaulted on its obligations, including the payment of rent.
After discovering alleged zoning, licensing, and code violations,
Appellant commenced a separate action against Appellee and its individual
owner. In the separate action, Appellant filed an amended complaint on May
12, 2020, in which Appellant raised claims of breach of contract/quasi-contract
and fraud in the inducement, among other counts.
In the instant matter, Appellee filed a complaint in confession of
judgment on June 25, 2020. On July 27, 2020, Appellant filed its petition to
strike and/or open confession of judgment, to stay execution, and to
consolidate. Therein, Appellant asserted:
5. [Appellee’s owner], on behalf of [Appellee], represented that
the premises was zoned and licensed to legally operate a two floor
restaurant with live entertainment space and did not have existing
code violations.
6. [Appellee] represented that La Veranda [the existing restaurant
at the premises] was operating legally with no code violations and
with the proper licenses and zoning to operate both floors of the
premises as part of the restaurant with live entertainment space.
7. [Appellee] represented that the second floor and first floor
banquet [areas] were used for parties and large events, and not
for regular dining but that it could be used for regular dining due
[sic] based on their set up and separate bar areas as there were
no outstanding code violations or zoning or license issues.
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Appellee. 2019 Sub-Sublease, 12/16/19, at 1. As noted below, Appellee
attached copies of both the 2019 sub-sublease and the 1996 sublease to its
complaint in confession of judgment. However, neither Appellant nor Appellee
argued that the 1996 sublease contained provisions relevant to the entry of
the confessed judgment or Appellant’s petition to open.
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8. During the tour [Appellant’s] representative asked [Appellee’s
owner] what the legal occupancy was for all three areas.
9. [Appellee’s owner] stated that the lawful occupancy for the
banquet room was 110 people, the lawful occupancy for the main
dining area was 145 people and lawful occupancy for the second
floor was 100 people.
10. At no time prior to entering the Sub Sublease Agreement did
[Appellee] disclose that the restaurant was operating illegally due
to code violations or against what the premises had been zoned
for.[2]
11. [Appellant] signed a sub-sublease for the premises, which was
fraudulently misrepresented by [Appellee], and [Appellant] paid
for the transfer of the liquor license.
12. After relying upon the fraudulent misrepresentations of
[Appellee], it was discovered that the restaurant was operating
illegally and operated with the following severe code violations and
lacked the following licenses, permits and/or zoning:
a) No food license;
b) No Special Assembly and Occupancy License
c) No Lawful Occupancy License for the banquet area on the
first floor;
d) No Lawful Occupancy License for the second floor;
e) No zoning for the banquet area;
f) No zoning for the second floor;
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2 We note that Appellee argues that Appellant waived its appellate arguments
based on fraudulent nondisclosure by failing to raise it in the petition to open
the confessed judgment. See Appellee’s Brief at 9-13. However, as indicated
above, Appellant alleged Appellees’ failures to disclose in the petition.
Additionally, Appellant alleged Appellee’s failures to disclose in its
memorandum of law accompanying the petition and in the amended complaint
from Appellant’s separate action against Appellant, which Appellant also
attached to the petition. These allegations were adequate to preserve the
issue, and we decline to find waiver.
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g) Faulty electrical work;
h) Outdated and inoperable fire sprinkler system
i) No permits for work performed in the restaurant for several
years. Exhibit A.
13. Following the signing of the lease [Appellant] requested a copy
of the certificate of occupancy for all three room[s] from
[Appellee].
14. [Appellee] could only provide a copy of the certificate of
occupancy for the first floor. Exhibit B
15. Upon discovering the extensive violations [Appellant’s]
attorney contacted [Appellee’s] attorney regarding the extensive
issues with the property. Exhibit C
16. Arguably, the sub-sublease is void or voidable due to doctrine
of impossibility of performance and/or frustration of purpose since
the restaurant was not operating legally.
17. In the alternative, if the contract is not void or voidable,
[Appellee] breached the contract and/or committed fraud.
18. On or about March 31, 2020, [Appellant] filed a complaint
against [Appellee and its owner] under docket #200302732.
Exhibit D
19. On or about May 12, 2020, [Appellant] filed an Amended
Complaint. Exhibit E
Pet. to Strike and/or Open Confession of J., to Stay Execution, and to
Consolidate, 7/27/20, at 2-4 (unpaginated) (some formatting altered)
(hereinafter, Pet. to Open). The allegations in Appellant’s petition to open the
confessed judgment mirrored the amended complaint in Appellant’s separate
action against Appellee.
Appellee filed a response opposing Appellant’s petition and asserted, in
relevant part, that the 2019 sub-sublease between the parties contained an
“as-is” provision in addition to an integration provision that barred evidence
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of the representations made before the execution of the parties’ agreement.
Resp. in Opp’n to Pet. to Open, 9/9/20, at 2 (unpaginated). Specifically,
Appellee relied on the following provisions set forth in the 2019 sub-sublease:
6. CONDITION OF PREMISES: NO REPRESENTATIONS
Sublessee [Appellant] has examined the Premises prior to and as
a condition precedent to the execution hereof, and its execution
of this Sub-sublease is conclusive evidence of Sublessee’s
acceptance of the Premises in their “AS IS” condition, including all
latent conditions thereof. Sublessor [Appellee] has no obligation
to alter, repair, decorate or further improve the Premises, and any
alteration, repairs, or modification necessary for Sublessee to use
the Premises shall be made at the sole cost and expense of
Sublessee excepting those alterations, repairs or modifications
which are the obligation of Landlord under the Sublease,[3] if any,
the cost and expense of which shall be the responsibility solely of
Landlord. Sublessee acknowledges and agrees that except as
expressly set forth in the AOS,[4] that neither Sublessor, its agents
or representatives have made any representation as to: (i) the
physical condition, repair, profitability of operation or possible
uses of this Premises, (ii) the laws, governmental regulations and
insurance underwriting standards and requirements applicable to
the Premises or (iii) the compliance by the Premises with such
laws, regulations and requirements and with the terms of the
Sublease.
* * *
20. MISCELLANEOUS
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3 The 2019 sub-sublease designated Headhouse Associates as “Landlord.”
2019 Sub-Sublease at 1.
4Appellee asserts that “AOS” refers to an agreement of sale that “[t]he parties
had initially contemplated [but] never executed.” Appellee’s Brief at 5 n.1.
Appellee states that the reference to the agreement of sale “was erroneously
not omitted from the final draft of the [2019] Sub-Sublease.” Id. Appellant
did not dispute Appellee’s explanation in the trial court, nor does Appellant
raise an argument based on the reference to the AOS in the instant appeal.
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* * *
d. Entire Agreement. This Sub-sublease contains the entire
agreement between the parties hereto concerning the Premises,
and shall not be modified in any manner except by a writing signed
by Sublessor and Sublessee.
2019 Sub-Sublease, 12/16/19, at 5, 14.
On October 20, 2020, the trial court denied Appellant’s petition to open
the confession of judgment. Order & Op., 10/20/20, at 1. In its accompanying
opinion, the trial court noted that “upon the filing of a petition to open
confession of judgment, ‘[t]he petitioning party bears the burden of producing
sufficient evidence to substantiate it[s] alleged defenses.’” Id. at 4 & n.11
(citing Haggerty v. Fetner, 481 A.2d 641, 644 (Pa. Super. 1984)). The trial
court denied Appellant’s petition to open the confessed judgment, concluding
that the as-is and integration provisions of the parties’ agreement barred
Appellant from offering evidence of “fraud and/or misrepresentation.” Id. at
5. The trial court’s order and opinion, however, quoted from the sublease “to
which [Appellant] was not a party” and that was “unrelated to the resolution
of this action.” Trial Ct. Op., 4/9/21, at 2 (unpaginated).
On November 17, 2020, Appellant timely filed a notice of appeal and a
motion for reconsideration.5 The trial court did not order a Pa.R.A.P. 1925(b)
statement.
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5 The trial court did not expressly rule on Appellant’s motion for
reconsideration, but this fact does not affect this Court’s jurisdiction. It is well
settled that a reconsideration motion does not toll the time for taking an
appeal unless the trial court grants the motion within thirty days of the order
(Footnote Continued Next Page)
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Meanwhile, in Appellant’s separate action against Appellee, the trial
court sustained in part and overruled in part Appellee’s preliminary objections
on November 20, 2020. The trial court cited, in part, Youndt v. First Nat.
Bank of Port Allegany, 868 A.2d 539 (Pa. Super. 2005), a decision in which
this Court applied the “clear and free from doubt” standard for sustaining
preliminary objections that result in the dismissal of an action. See Youndt,
868 A.2d at 544 (noting that “it must appear with certainty that the law would
not permit recovery by the plaintiff upon the facts averred” and that “[a]ny
doubt should be resolved by a refusal to sustain the [preliminary] objections”
(citation omitted)). Notably, in overruling one of Appellee’s preliminary
objections, the trial court explained that “[p]ursuant to the theory of
fraudulent nondisclosure, the allegations in the amended complaint are
specific enough to state a cause for fraud.” Order, No. 200302732, 11/20/20,
at 2 & n.4. The trial court added: “The as-is clause in the Agreement of Sub-
Sublease may be subject to different interpretations. Therefore, the claims
based on fraudulent nondisclosure are not dismissed.” Id. at 1 n.1.
In the instant appeal, the trial court filed an opinion on April 9, 2021.
The trial court noted that its October 20, 2020 order and opinion denying
Appellant’s petition to open the confessed judgment quoted provisions of the
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being appealed. See Pa.R.A.P. 1701(b)(3); Stephens v. Messick, 799 A.2d
793, 800-01 (Pa. Super. 2002). “Normally, motions for reconsideration expire
on their own after the thirty day period” absent a trial court’s express ruling
granting reconsideration or vacating the order. See Stephens, 799 A.2d at
801.
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unrelated 1996 sublease rather than the parties’ 2019 sub-sublease. Trial Ct.
Op., 4/9/21, at 2 & n.2. The trial court indicated that it would recommend
the affirmance of its order after correcting its quotations to include references
to the 2019 sub-sublease.6 Id.Appellant presents the following questions for our review:
1. Did [the trial court] abuse [its] discretion when [it] concluded
Appellant’s fraudulent nondisclosure claim against Appellee
was not a meritorious defense in the confession of judgment
case but was a legally sufficient cause of action in the [the
separate] fraud case [by Appellant against Appellee]?
2. Can the Superior Court judicially estop a trial court from
entering two inconsistent orders in two related cases where the
parties and facts are the same and the legal standard
governing both rulings is the same?
Appellant’s Brief at 3 (formatting altered).
In its first issue, Appellant contends that it presented a meritorious
defense to open the confessed judgment. In support, Appellant relies on
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6 Because the trial court inadvertently quoted the 1996 sublease, it did not
consider the language of the 2019 sub-sublease in either its October 20, 2020
order and opinion or its April 9, 2021 opinion. We appreciate the trial court’s
candor and request for a remand. However, neither Appellant nor Appellee
seek a remand for a correction of the October 20, 2020 order and opinion.
We emphasize that the parties’ appellate arguments focus on the
interpretation and application of the 2019 sublease. Neither Appellant nor
Appellee contend that the 1996 sublease directly, or by incorporation through
the 2019 sub-sublease, relate to the issues raised in this appeal. Based on
our decision herein, we decline to remand solely for a correction of the order
and opinion to quote the 2019 sub-sublease.
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Youndt to assert that it could raise a claim of fraudulent non-disclosure
despite the as-is and integration provisions in the 2019 sub-sublease. See
Appellant’s Brief at 15, 18, 23. Appellant argues that when properly
interpreted, the as-is provision of the 2019 sub-sublease did not preclude a
defense based on Appellee’s failures to disclose the premises’ zoning,
licensing, and code issues. Id. at 24-27.
The principles relevant to this appeal are well settled. “We review the
order denying [an a]ppellant’s petition to open the confessed judgment for an
abuse of discretion.” PNC Bank, Nat. Ass’n v. Bluestream Tech., Inc., 14
A.3d 831, 835 (Pa. Super. 2010) (citation omitted). “A petition to open rests
within the discretion of the trial court, and may be granted if the petitioner
(1) acts promptly, (2) alleges a meritorious defense, and (3) can produce
sufficient evidence to require submission of the case to a jury.” Id. at 836(citation omitted and formatting altered).
To establish a meritorious defense, a petitioner must produce evidence
supporting its claim. Gur v. Nadav, 178 A.3d 851, 858-59 (Pa. Super. 2018).
The evidence must show a sufficient basis for an issue to be submitted to a
jury, but the petitioner need not prove that it will prevail at trial. Id. at 858.
This Court “must view the facts most favorably to the moving party, we must
accept as true all the evidence and proper inferences in support of the defense
raised, and we must reject all adverse allegations.” Pops PCE TT, LP v. R &
R Rest. Grp., LLC., 208 A.3d 79, 86 (Pa. Super. 2019) (citation omitted),
appeal denied, 223 A.3d 656 (Pa. 2020).
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“The legal effect or enforceability of a contact provision presents a
question of law accorded full appellate review and is not limited to an abuse
of discretion standard.” Id. at 87 (citations and quotation marks omitted).
Our review of the trial court’s interpretation of a contract is de novo, and our
scope of review is plenary. Mitch v. XTO Energy, Inc., 212 A.3d 1135, 1138
(Pa. Super. 2019) (citation omitted).
In Youndt, the trial court sustained the seller’s preliminary objections
to the buyers’ amended complaint, which asserted the seller’s fraud in the sale
of a motel. Youndt, 868 A.2d at 543-44. The Youndt Court initially
determined that the parol evidence rule barred evidence of the seller’s
affirmative misrepresentations and that the buyer failed to plead a cause of
action for fraudulent concealment. Id. at 545-50. The trial court also
concluded that an agreement for sale barred the buyers’ claims that the seller
intentionally and fraudulently failed to disclose problems with the motel’s
water and sewage system.7 Id. at 542-43, 552.
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7 In Youndt, the agreement for sale contained the following provisions:
Clause C states that the “Seller shall warrant Water Pipes to Motel
Units.” Clause D states that “Buyer is Buying Property in as is
Condition.” On the second page of the Agreement, the final
paragraph is entitled “Representations” and it states in bold print:
It is understood that Buyer has inspected the
property, or hereby waives the right to do so and has
agreed to purchase it as a result of such inspection
and not because of or in reliance upon any
representation made by the Seller or any other
(Footnote Continued Next Page)
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Of relevance to this appeal, the Youndt Court separately addressed the
buyers’ claim for fraudulent nondisclosure.8 Id. at 550. The Court noted that
the Restatement (Second) of Torts § 551 imposed a duty to disclose as
follows:
(1) One who fails to disclose to another a fact that he knows may
justifiably induce the other to act or refrain from acting in a
business transaction is subject to the same liability to the other as
though he had represented the nonexistence of the matter that
he has failed to disclose, if, but only if, he is under a duty to the
other to exercise reasonable care to disclose the matter in
question.
(2) One party to a business transaction is under a duty to exercise
reasonable care to disclose to the other before the transaction is
consummated,
(a) matters known to him that the other is entitled to know
because of a fiduciary or other similar relation of trust and
confidence between them; and
(b) matters known to him that he knows to be necessary to
prevent his partial or ambiguous statement of the facts from
being misleading; and
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officer, partner or employee of Seller, or by any
Agent, Subagent, their salespeople and employees,
officers and/or partners.
The paragraph continues in regular print and states that
Appellants were purchasing the property “in its present condition
unless otherwise specified herein.”
Youndt, 868 A.2d at 543 (emphasis in original). The agreement for sale at
issue in Youndt also included an integration clause. Id.8 As the Youndt Court noted, “[t]here are two separate torts that impose
liability for fraud upon a vendor of real estate in a commercial or residential
transaction even though the vendor made no affirmative misrepresentation:
(1) Fraudulent Concealment; and (2) Fraudulent Nondisclosure.” Id. at 549(citations omitted).
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(c) subsequently acquired information that he knows will make
untrue or misleading a previous representation that when
made was true or believed to be so; and
(d) the falsity of a representation not made with the
expectation that it would be acted upon, if he subsequently
learns that the other is about to act in reliance upon it in a
transaction with him; and
(e) facts basic to the transaction, if he knows that the other is
about to enter into it under a mistake as to them, and that the
other, because of the relationship between them, the customs
of the trade or other objective circumstances, would reasonably
expect a disclosure of those facts.
Id. at 550 (quoting Restatement (Second) Torts § 551 (1977)).
The Youndt Court held that the buyers failed to establish the seller’s
duty to disclose under Section 551(2)(e). Id. at 551. The Court reasoned
that the buyers (1) “assumed the risk as to the existence of a defect [in the
sewage system” under the sales agreement, and (2) either waived or did not
afford themselves the opportunity to inspect as provided in the sales
agreement. Id. at 551-52. The Court noted that
to a considerable extent, sanctioned by the customs and
mores of the community, superior information and better
business acumen are legitimate advantages, which lead to
no liability. The [seller in a business transaction] may
reasonably expect the [buyer] to make his own
investigation, draw his own conclusions and protect himself;
and if the [buyer] is indolent, inexperienced or ignorant, or
his judgment is bad, or he does not have access to adequate
information, the [seller] is under no obligation to make good
his deficiencies.
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Id. at 551–52 (citation omitted). Accordingly, the Youndt Court affirmed the
trial court’s decision to sustain the seller’s preliminary objection and dismiss
the buyers’ fraudulent nondisclosure claim. Id. at 552.
Here, as noted above, Appellant relies on Youndt to assert that the
2019 sub-sublease did not bar the fraudulent nondisclosure defense it raised
in its petition to open the confessed judgment. Appellant’s Brief at 15, 22-23.
In support, Appellant interprets the three sentences of the as-is provision of
the 2019 sub-sublease as two distinct parts. Id. at 24-27. According to
Appellant, the first part consisted of the first two sentences, which when read
together, concerned the physical condition of the premises. Id. The second
part, which consisted of the third sentence, concerned Appellee’s disclaimers
of the premises’ legal condition. Id. at 27. Appellant continues that because
the term “as is” applied only in the first part of the provision concerning
physical defects, Appellant did not assume the risk of Appellee’s fraudulent
nondisclosures concerning the premises’ legal condition, such as zoning,
licensing, and code issues. Id. at 27. Alternatively, Appellant contends that
the as-is provision was ambiguous and that the intended meaning of the
provision was a jury issue. Id. Appellant therefore concludes that it stated
a meritorious fraudulent nondisclosure defense justifying the opening of the
confessed judgment. Id.
Appellee counters that Youndt requires this Court to affirm the trial
court’s denial of Appellant’s petition to open the confessed judgment.
Appellee’s Brief at 19-20. Appellee asserts that the as-is provision in the 2019
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sub-sublease established that Appellant agreed to assume the risk of both the
physical and legal defects in the premises and that Appellee had no duty to
disclose the “purported code or zoning violations.” Id. at 17-19. Accordingly,
Appellee request that this Court uphold the trial court’s denial of Appellant’s
petition to open the confession of judgment.
It is well settled that
[i]n interpreting the language of a contract, we attempt to
ascertain the intent of the parties and give it effect. When the
words of an agreement are clear and unambiguous, the intent of
the parties is to be ascertained from the language used in the
agreement, which will be given its commonly accepted and plain
meaning. Additionally, in determining the intent of the
contracting parties, all provisions in the agreement will be
construed together and each will be given effect. Thus, we will
not interpret one provision of a contract in a manner which results
in another portion being annulled.
LJL Transp., Inc. v. Pilot Air Freight Corp., 962 A.2d 639, 647-48 (Pa.
2009) (citations omitted).
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. . . .
Only where a contract’s language is ambiguous may extrinsic or
parol evidence be considered to determine the intent of the
parties. A contract contains an ambiguity if it is reasonably
susceptible of different constructions and capable of being
understood in more than one sense. This question, however, is
not resolved in a vacuum. Instead, contractual terms are
ambiguous if they are subject to more than one reasonable
interpretation when applied to a particular set of facts. In the
absence of an ambiguity, the plain meaning of the agreement will
be enforced.
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Murphy v. Duquesne Univ. of the Holy Ghost, 777 A.2d 418, 429-30 (Pa.
2001) (citations omitted and formatting altered). This Court “‘will not imply
a contract different than that which the parties have expressly adopted. This
rule is particularly apt when reviewing a contract involving two parties of
relatively equal bargaining power, as is generally the case in a commercial
lease setting.” Cambria-Stoltz Enterprises v. TNT Investments, 747 A.2d
947, 950 (Pa. Super. 2000) (citations and quotation marks omitted).
Instantly, we reiterate that the as-is provision of the 2019 sub-sublease
consists of three sentences in a single paragraph, which stated, in relevant
part:
[Appellant] has examined the Premises prior to and as a condition
precedent to the execution hereof, and its execution of this Sub-
sublease is conclusive evidence of [Appellant]’s acceptance of the
Premises in their “AS IS” condition, including all latent conditions
thereof. [Appellee] has no obligation to alter, repair, decorate or
further improve the Premises, and any alteration, repairs, or
modification necessary for [Appellant] to use the Premises shall
be made at the sole cost and expense of [Appellant] . . . .
[Appellant] acknowledges and agrees that . . . that neither
[Appellee], its agents or representatives have made any
representation as to: (i) the physical condition, repair, profitability
of operation or possible uses of this Premises, (ii) the laws,
governmental regulations and insurance underwriting standards
and requirements applicable to the Premises or (iii) the
compliance by the Premises with such laws, regulations and
requirements and with the terms of the Sublease.
2019 Sub-Sublease at 5.
The first sentence of the as-is provision states that Appellant
“examined” the premises and accepted it “as is” as to “all latent defects.”
2019 Sub-Sublease at 5 (emphasis added). The first sentence did not qualify
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the phrase “latent defects.” See id. The second sentence used terms such
as “alter,” “decorate,” and “improve,” which could concern physical aspects of
the premises. See id. However, the second sentence also absolved Appellee
of the costs of alterations, repair, or modification “necessary for [Appellant’s]
use.” See id. The phrase “necessary for use” encompasses not only physical
but also legal conditions, as Appellant, for example, claimed that faulty
electrical work and outdated fire sprinkler systems did not comply with codes
and regulations. See Pet. to Open at 3 & Ex. A. The third sentence of the as-
is provision disclaimed any representation by Appellee as to the “physical
condition” and “possible” uses of the premises, as well as the premises’
“compliance” with applicable “laws” and “regulations.” See 2019 Sub-
Sublease at 5.
Based on the foregoing, we conclude that Appellant’s interpretation of
the as-is provision as two distinct parts concerning the premises’ physical and
legal condition lacks merit.9 Contrary to Appellant’s claim, the first two
sentences of the as-is provision did not concern only physical defects. Further,
the third sentence clearly describes physical and legal defects. When read
as a whole, the as-is provision established Appellant’s acceptance of the
premises as-is concerning all latent defects without qualification as to whether
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9As noted above the trial court did not consider the language of the 2019 sub-
sublease. Nevertheless, this Court considers the interpretation and
application of the 2019 sub-sublease de novo. See Pops, 208 A.3d at 87
Mitch, 212 A.3d at 1138.
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the defect was physical or legal. See id. Similar to Youndt, the 2019 sub-
sublease’s as-is provision required Appellant to assume the risk and costs to
make the premises suitable to Appellant’s use. See Youndt, 868 A.2d at 543,
551-52. As in Youndt, we are constrained to conclude that Appellant failed
to establish Appellee’s duty to disclose legal defects. See id. at 551-52.
Accordingly, Appellant has not established a meritorious fraudulent
nondisclosure defense against Appellee, and we will not disturb the trial court’s
ruling.10 See PNC Bank, 14 A.3d at 835.
Next, Appellant contends that the trial court’s ruling in the instant case
was “unreasonable, arbitrary, or capricious” because it was inconsistent with
the court’s ruling in Appellant’s separate action against Appellee. Appellant’s
Brief at 28. Appellant notes that the trial court determined that Appellant
sufficiently alleged a claim of fraudulent nondisclosure in its separate action
against Appellee and concluded that the as-is provision was ambiguous.11 Id.____________________________________________
10 Because we conclude that Appellant failed to establish Appellee’s duty to
disclose in light of the as-is provision in the 2019 sub-sublease and Youndt,
we need not address Appellant’s argument that the integration provision of
the 2019 sub-sublease did not bar its proposed fraudulent nondisclosure
defense.
11 More specifically, as noted above, the trial court overruled Appellee’s
preliminary objection in Appellant’s separate action against Appellee. The trial
court reasoned that the as-is provision of the 2019 sub-sublease “may be
subject to different interpretations” and that “the allegations in the
amended complaint are specific enough to state a cause” of action for
fraudulent nondisclosure. Order, No. 200302732, at 1 n.1, 2 & n.4 (emphases
added).
(Footnote Continued Next Page)
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at 30-31. Appellant notes that its allegations in its petition to open the
confessed judgment in the present case and in its amended complaint in the
separate action are the same. Id. at 35-36. Appellant further asserts that
the legal standards for reviewing a petition to open a confessed judgment and
a preliminary objection are the same. Id. at 28, 30. Appellant requests that
this Court apply judicial estoppel to resolve the inconsistency between the trial
court’s rulings in the instant case and Appellant’s separate action against
Appellee.12 Id. at 32-38.
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We note that Appellant did not raise the possible inconsistencies between the
trial court’s rulings on Appellant’s petition to open the confessed judgment
and Appellee’s preliminary objection in the trial court. Further, the trial court
addressed the issue in its April 9, 2021 opinion. However, because the trial
court ruled on Appellee’s preliminary objections thirty-one days after the trial
court denied Appellant’s petition to open the confessed judgment, Appellant
did not have an opportunity to file a supplemental motion for reconsideration
to preserve the issue when challenging the denial of its petition to open.
Therefore, we decline to find waiver.
12 This Court discussed judicial estoppel as follows:
Our Supreme Court has held that as a general rule, a party
to an action is estopped from assuming a position
inconsistent with his or her assertion in a previous action, if
his or her contention was successfully maintained.
Accordingly, judicial estoppel is properly applied only if the
court concludes the following: (1) that the appellant
assumed an inconsistent position in an earlier action; and
(2) that the appellant’s contention was successfully
maintained in that action.
“The purpose of this doctrine is to uphold the integrity of the
courts by preventing parties from abusing the judicial process by
changing positions as the moment requires.”
(Footnote Continued Next Page)
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Appellee responds that the standards governing the trial court’s rulings
in the instant case and in Appellant’s separate action against Appellee are
materially different. Appellee’s Brief at 20-22. Appellee adds that judicial
estoppel applies to parties, not courts. Id. at 23-24.
For the reasons that follow, we conclude that materially different
standards distinguish the trial court’s consideration of a petition to open and
preliminary objections, and, therefore, Appellant’s arguments that the trial
court’s rulings were so inconsistent as to require estoppel of the trial court’s
denial of the petition to open lack merit.
As noted above, in a petition to open a confessed judgment, a petitioner
must produce evidence supporting its claim of a meritorious defense. Gur,
178 A.3d at 859.
The standard of sufficiency [when reviewing the merits of a
proposed defense] is similar to the standard for a directed verdict,
in that we must view the facts most favorably to the moving party,
we must accept as true all the evidence and proper inferences in
support of the defense raised, and we must reject all adverse
allegations.
Pops, 208 A.3d at 86 (citation omitted).
In the context of preliminary objections, the Youndt Court stated:
Where affirmance of the trial court’s order sustaining preliminary
objections would result in the dismissal of an action, we may do
so only when the case is clear and free from doubt.
____________________________________________
Westfield Ins. Co. v. Astra Foods Inc., 134 A.3d 1045, 1051 (Pa. Super.
2016) (citations omitted).
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To be clear and free from doubt that dismissal is appropriate, it
must appear with certainty that the law would not permit recovery
by the plaintiff upon the facts averred. Any doubt should be
resolved by a refusal to sustain the objections. . . . A demurrer
tests the sufficiency of challenged pleadings. Fact-based
defenses, even those which might ultimately inure to the
defendant’s benefit, are thus irrelevant on demurrer.
Youndt, 868 A.2d at 544 (emphasis added). Put differently, “[p]reliminary
objections in the nature of demurrers are proper when the law is clear that a
plaintiff is not entitled to recovery based on the facts alleged in the complaint.”
Yocca v. Pittsburgh Steelers Sports, Inc., 854 A.2d 425, 436 (Pa. 2004)
(citation omitted).
Instantly, the standards governing the trial court’s ruling on Appellee’s
preliminary objections only required a review of the sufficiency of the
allegations in Appellant’s amended complaint in the separate action against
Appellee. See id. The standards governing the trial court’s ruling on
Appellant’s petition to open required the trial court to consider the sufficiency
of the Appellant’s evidence concerning its proposed defense. See Pops, 208
A.3d at 86. While Appellant’s allegations in its separate action against
Appellee and the instant petition to open the confessed judgment were similar
in that Appellant asserted Appellee’s nondisclosure of the premises’ zoning,
licensing, and code violations, we cannot conclude that the trial court reached
inconsistent results. Rather, different legal standards applied when the trial
court ruled on Appellant’s petition to open the confessed judgment and
Appellee’s preliminary objection in Appellant’s separate action against
Appellee. Accordingly, Appellant was not entitled to open the confessed
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judgment based on the trial court’s ruling on Appellee’s preliminary objection
in Appellant’s separate action.13
Order affirmed.
Judgment Entered.
Joseph D. Seletyn, Esq.
Prothonotary
Date: 1/4/2022
____________________________________________
13 We emphasize that our decision to affirm the order denying Appellant’s
petition to open the confessed judgment is limited to the arguments presented
in this appeal. See Youndt, 868 A.2d at 543, 551-52. Therefore, we do not
opine on the trial court overruling Appellee’s preliminary objections in
Appellant’s separate action. Our decision in this appeal also does not preclude
Appellant from asserting, or the trial court from finding, that the as-is
provision in the sub-sublease is ambiguous for reasons different than those
described herein.
Additionally, Appellant does not argue in this appeal that the trial court erred
in denying its request to stay a decision on its petition to open the confessed
judgment pending its separate action against Appellee. Nevertheless, if
Appellant were to prevail in its separate action against Appellee, there may be
grounds for Appellant to open the confessed judgment. Cf. PNC Bank, 14
A.3d at 840 (noting that if a party were to prevail in a separate action for
fraud against the opposing party who entered a confessed judgment, then the
opposing party “would no longer be entitled to enforce the confessed
judgment”).
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