Piole, J. v. Pupich, C. ( 2020 )

J-A24005-20
NON-PRECEDENTIAL DECISION - SEE SUPERIOR COURT I.O.P. 65.37
JOSEPH A. PIOLE, AN INDIVIDUAL : IN THE SUPERIOR COURT OF
: PENNSYLVANIA
Appellant :
:
:
v. :
:
:
CHARLES J. PUPICH, AN INDIVIDUAL : No. 1654 WDA 2019
Appeal from the Judgment Entered December 5, 2019
In the Court of Common Pleas of Allegheny County Civil Division at
No(s): GD 06-23189
JOSEPH A. PIOLE, AN INDIVIDUAL : IN THE SUPERIOR COURT OF
: PENNSYLVANIA
:
v. :
:
:
CHARLES J. PUPICH, AN INDIVIDUAL :
:
Appellant : No. 1697 WDA 2019
Appeal from the Judgment Entered December 5, 2019
In the Court of Common Pleas of Allegheny County Civil Division at
No(s): G.D. 06-23189
BEFORE: BENDER, P.J.E., McLAUGHLIN, J., and MUSMANNO, J.
MEMORANDUM BY BENDER, P.J.E.: FILED NOVEMBER 18, 2020
Appellant, Joseph A. Piole (hereinafter “Tenant”), appeals and Appellee,
Charles J. Pupich (hereinafter “Landlord”), cross-appeals from the December
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5, 2019 judgment entered in favor of Tenant following a jury trial.1 After
review, we affirm.
The trial court summarized the background of this case as follows:
[Tenant] instituted this action by Writ of Summons on September
28, 2006, after a commercial property owned by [Landlord] and
leased to [Tenant] caught fire on September 29, 2004.[2] The
original complaint filed on December 6, 2006, alleged negligence,
breach of both a written and oral contract[,] and unjust
enrichment.[3] After [Tenant’s] first counsel withdrew his
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1 Tenant purports to appeal from the trial court’s October 8, 2019 order
denying his post-trial motion to mold the verdict, and Landlord claims to
appeal from the trial court’s October 23, 2019 order denying his post-trial
motion. An order denying post-trial motions is interlocutory and generally not
appealable. See Levitt v. Patrick, 976 A.2d 581, 584 n.2 (Pa. Super. 2009)
(stating that an appeal properly lies from the entry of judgment, not from an
order denying post-trial motions); Fanning v. Davne, 795 A.2d 388, 391 (Pa.
Super. 2002) (“An appeal from an order denying post-trial motions is
interlocutory. An appeal to this Court can only lie from judgments entered
subsequent to the trial court’s disposition of post-verdict motions, not from
the order denying post-trial motions.”) (citations omitted). However, because
judgment was subsequently entered on December 5, 2019, we consider both
parties’ appeals as taken from the entry of judgment. See Johnston the
Florist, Inc. v. TEDCO Const. Corp., 657 A.2d 511, 514-15 (Pa. Super.
1995) (stating that appellate courts may “regard as done that which ought to
have been done”) (citations omitted). We have amended the captions
accordingly.
2 Both parties describe the fire as destroying the property. See Tenant’s Brief
at 5; Landlord’s Brief at 7. Neither party disputes that the costs of repairing
it exceeded 25% of the replacement cost of the building.
3 Our review of the record indicates that the trial court dismissed Tenant’s
negligence and unjust enrichment claims on December 1, 2015. With respect
to Tenant’s breach-of-written-contract claim, he asserted in his complaint that
Landlord breached the lease when, on December 23, 2004, Landlord
“attempt[ed] to give [Tenant] notice that ‘the [l]ease is terminated and your
tenancy therein is no longer in force or effect.’” Complaint, 12/28/06, at ¶
24. Tenant alleged that “[t]he purported termination was invalid since it was
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appearance on September 9, 2007, this case sat dormant until
[Tenant] retained new counsel, who entered their appearance on
March 24, 2013. The case was originally tried before a jury, which
returned a verdict on December 3, 2015[,] in favor of [Landlord].
Following the verdict, a new trial was granted by [the Honorable
Alan Hertzberg of the Court of Common Pleas of Allegheny
County,] on June 29, 2016[,] as a result of misconduct and jury
prejudice. The grant of a new trial was appealed to the
Pennsylvania Superior Court on July 12, 201[6], who ultimately
affirmed the granting of a new trial and remanded the case….[4]
This [c]ourt presided over the second trial, which began on May
10, 2019. Following a 3-day jury trial, a verdict was returned in
favor of [Tenant], with an award of $120,500.00 for breach of a
written contract and $0.00 for breach of an oral contract.
Subsequent to the verdict, [which was docketed on May 14, 2019,
Tenant] filed a Motion to Mold the Verdict to include prejudgment
interest [on May 23, 2019]. [Landlord also] filed a [timely] Motion
for Post-Trial [R]elief, arguing [that Tenant] failed to establish a
right to recovery … because the verdict was against the law and
the weight of the evidence. Argument on both motions and
testimony regarding the Motion to Mold … was taken on October
8, 2019, after which this [c]ourt denied both motions. [Tenant]
filed an appeal on November 7, 2019, alleging this [c]ourt’s denial
of the Motion to Mold Verdict was done in error. [Landlord]
subsequently filed a Cross Notice of Appeal on November 13,
2019, alleging this [c]ourt also erred in denying [his] Motion for
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not provided within ‘45 days of the date of the occurrence’ [, i.e., the date of
the fire,] as required by Article 21 of the lease[,]” which we set forth infra and
refer to as the “Fire Clause.” Id. at ¶ 25. As a result of this breach, Tenant
averred, inter alia, that he suffered a loss of profits from the subleases he had
arranged for the premises. Id. at ¶ 28. Additionally, regarding Tenant’s
breach-of-oral-contract claim, Tenant alleged that the parties had an oral
agreement that Landlord “would use a portion of the insurance proceeds to
rehabilitate the premises, so that [Tenant] could continue as a tenant under
the lease.” Id. at ¶ 26. Tenant also claimed that Landlord breached an oral
agreement to reimburse Tenant for his personal property destroyed by the
fire. Id. at ¶ 27.
4See Piole v. Pupich, 169 A.3d 1223 (Pa. Super. 2017) (unpublished
memorandum).
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Post-Trial Relief. This [c]ourt ordered both parties to file
[Pa.R.A.P.] 1925(b) Statement of Errors Complained of on
Appeal…, [and] both sides timely complied with [that order].
Trial Court Opinion (“TCO”), 1/6/20, at 2-3.5
Landlord’s Appeal
For ease of disposition, we address Landlord’s appeal first. He raises
the following two issues for our review:
[1.] Whether the trial court erred when it did not enter [judgment
notwithstanding the verdict (“JNOV”)] when [Landlord] was
entitled to judgment as a matter of law because [Tenant] never
paid rent on the commercial lease [and], therefore, no
consideration for the lease existed?
[2.] Whether the trial court erred when it did not enter [JNOV] on
the limitations of the [F]ire [C]lause, which limited damages to
ninety days of rent?
Landlord’s Brief at 5 (unnecessary capitalization omitted).
At the outset, we recognize:
A JNOV can be entered upon two bases: (1) where the movant is
entitled to judgment as a matter of law; and/or, (2) the evidence
was such that no two reasonable minds could disagree that the
verdict should have been rendered for the movant. When
reviewing a trial court’s denial of a motion for JNOV, we must
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5 On October 7, 2020, we filed a memorandum remanding this case for the
parties to supplement the record in the trial court with a properly certified,
original trial transcript and trial exhibits. See Piole v. Pupich, 2020 WL
5946969 (Pa. Super. 2020) (unpublished memorandum). On October 20,
2020, we received the supplemental record from the trial court, containing the
trial transcript and trial exhibits. The trial transcript included therein,
however, is not certified by the court reporter. See Pa.R.J.A. 4013 (“Court
reporting personnel who take the notes, record or transcribe a proceeding
shall certify that the transcript of proceedings is true and correct and meets
the format specifications established by the Supreme Court of Pennsylvania in
Rule 4010.”). While we admonish the parties for not following our order, we
will overlook this omission because neither party contests the transcript’s
validity or accuracy.
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consider all of the evidence admitted to decide if there was
sufficient competent evidence to sustain the verdict. In so doing,
we must also view this evidence in the light most favorable to the
verdict winner, giving the victorious party the benefit of every
reasonable inference arising from the evidence and rejecting all
unfavorable testimony and inference. Concerning any questions
of law, our scope of review is plenary. Concerning questions of
credibility and weight accorded the evidence at trial, we will not
substitute our judgment for that of the finder of fact. If any basis
exists upon which the [court] could have properly made its award,
then we must affirm the trial court’s denial of the motion for JNOV.
A JNOV should be entered only in a clear case.
V-Tech Services, Inc. v. Street, 72 A.3d 270, 275 (Pa. Super. 2013)
(citation omitted).
In Landlord’s first issue, he argues that Tenant’s “failure to pay any rent
under the lease agreement relieved [Landlord] of any obligations under the
lease agreement.” Landlord’s Brief at 21 (unnecessary capitalization and
emphasis omitted).6 He asserts that “[i]t is undisputed that [Tenant] never
paid any rent under the lease agreement[,]” and Tenant’s “failure to pay rent
constituted a material breach of the contract which relieved [Landlord] from
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6 Specifically, Landlord argues that, under the lease, Tenant covenanted to
pay rent “in installments of TWO THOUSAND FIVE HUNDRED Dollars ($2,500)
per month, in advance without demand on or before the 15[th] day of each
month at the office of the LESSOR.” See Tenant’s Exhibit 8 (hereinafter
“Lease”) at ¶ 3. Landlord observes that the parties signed the lease on
September 7, 2004, and the lease commenced on October 1, 2004. Landlord’s
Brief at 21-22. Landlord therefore asserts that “the first rent payment was
due on September 15, 2004.” Id. at 22. As a result, Landlord argues that
“rent was due before the fire[,]” which occurred on September 29, 2004. Id.
Further, Landlord claims that, even if no rent was due on September 15, 2004,
“it was anticipated in the [l]ease that rent payments would still be made even
if a fire occurred.” Id. However, Tenant admitted at trial that he did not pay
any amount of rent under the lease. N.T. Trial, 5/10/19-5/13/19, at 75.
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any further duties thereunder.” Id. at 21, 25 (unnecessary capitalization
omitted).7 Therefore, he claims that he is entitled to judgment as a matter of
law. Id. at 27.
We deem this claim waived. Initially, Landlord does not indicate how he
preserved this argument below in contravention of our Rules of Appellate
Procedure. See Pa.R.A.P. 2117(c) (requiring, where an issue is not reviewable
on appeal unless raised or preserved below, a statement of place of raising or
preservation of issues); Pa.R.A.P. 2119(e) (“Where under the applicable law
an issue is not reviewable on appeal unless raised or preserved below, the
argument must set forth, in immediate connection therewith or in a footnote
thereto, either a specific cross-reference to the page or pages of the statement
of the case which set forth the information relating thereto as required by
Pa.R.A.P. 2117(c), or substantially the same information”); see also Youst
v. Keck’s Food Service, Inc., 94 A.3d 1057, 1071 (Pa. Super. 2014) (“[T]o
preserve the right to a request a JNOV post-trial, a litigant must first request
a binding charge to the jury or move for a directed or a compulsory non-suit
at trial.”) (citation and original brackets omitted). “Our appellate courts have
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7 Landlord’s argument regarding a material breach does not clearly align with
the way he frames this issue in his statement of the questions involved, which
mentions consideration. To the extent Landlord claims that the lease lacked
consideration or contemplated a condition precedent that did not occur, we
deem those arguments waived for lack of meaningful analysis and
development. In re M.Z.T.M.W., 163 A.3d 462, 465 (Pa. Super. 2017) (“It
is well-settled that this Court will not review a claim unless it is developed in
the argument section of an appellant’s brief, and supported by citations to
relevant authority.”) (citations omitted).
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long held that an [appellant] who does not follow Pa.R.A.P. 2117(c) and
Pa.R.A.P. 2119(e) waives the related issues due to the defects in his brief.”
Young v. S.B. Conrad, Inc., 216 A.3d 267, 274 (Pa. Super. 2019). “[I]t is
not the responsibility of this Court to scour the record to prove that an
appellant has raised an issue before the trial court, thereby preserving it for
appellate review.” Commonwealth v. Baker, 963 A.2d 495, 502 n.6 (Pa.
Super. 2008) (citations omitted).
Moreover, our review of the record does not demonstrate that Landlord
raised this particular ground for JNOV — namely, that Tenant materially
breached the lease by not paying rent and, consequently, Landlord was
discharged from all liability under the lease — at trial or in pre-trial
proceedings.8 This Court has explained:
A party “may not, at the post-trial motion stage, raise a new
theory which was not raised during trial.” Keffer v. Bob Nolan’s
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8 We acknowledge that, at the close of Tenant’s case, Landlord “move[d] for
a judgment based upon the facts[,]” stating, “They have not proven their case.
There is a lack of consideration that they alleged oral agreement [sic] and that
violates the lease in any event. So, therefore, there is no case that they can
proceed for on [sic].” N.T. Trial at 111-12. However, this motion only
challenges the sufficiency of the evidence supporting Tenant’s claim for breach
of an oral contract; it does not contest the evidence Tenant presented to prove
his claim for breach of the written lease. Further, Landlord made no argument
that a material breach occurred, or that Tenant’s failure to pay any rent
relieved Landlord of any obligations under the lease agreement. Landlord also
did not advance this argument in his opening and closing statements at trial.
Instead, at trial, Landlord’s primary arguments with respect to the written
lease were that it did not require him to buy insurance for Tenant’s personal
items and fixtures at the building, that he bears no liability under the lease for
any property damage in the building, and that — if he breached the lease by
not giving 45 days’ notice to Tenant that he was terminating it — that breach
was not material. Id. at 31, 180, 182.
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Auto Serv., Inc., 59 A.3d 621, 630 (Pa. Super. 2012) (citation
omitted), appeal denied, … 69 A.3d 602 ([Pa.] 2013). Moreover,
explaining waiver in the context of post-trial motions, our
Supreme Court remarked: “Rule 227.1, which governs post-trial
relief, provides in relevant part that a ground may not serve as
the basis for post-trial relief, including [JNOV], unless it was raised
in pre-trial proceedings or at trial.” Straub v. Cherne Indus., …
880 A.2d 561, 566 ([Pa.] 2005). “The Rule further notes that
error that could have been corrected by timely objection in the
trial court may not constitute a ground for such a judgment.
Pa.R.C.P. 227.1(b)(1).” Id.
E.S. Management v. Yingkai Gao, 176 A.3d 859, 864-65 (Pa. Super. 2017);
see also Brown v. Halpern, 202 A.3d 687, 697 (Pa. Super. 2019) (“It is
well-settled that issues raised for the first time in a post-trial motion are
waived.”) (citation omitted); Young, 216 A.3d at 275 (“Raising an issue for
the first in a post-trial motion is insufficient to satisfy the appellate rules.”).
Accordingly, we find Landlord’s first issue waived.9, 10
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9We note that neither party nor the trial court mention waiver. Nevertheless,
“we are bound by our precedents to invoke waiver sua sponte in this case.”
Tecce v. Hally, 106 A.3d 728, 732 (Pa. Super. 2014); see also Wirth v.
Com., 95 A.3d 822, 837 (Pa. 2014) (“[B]ecause the burden rests with the
appealing party to develop the argument sufficiently, an appellee’s failure to
advocate for waiver is of no moment.”) (citation omitted); Commonwealth
v. Triplett, 381 A.2d 877, 881 n.10 (Pa. 1977) (“Although the issue of waiver
as to [the] appellant’s second contention has not been addressed by either
party, we may raise the issue of waiver sua sponte.”) (citations omitted).
10 Though the trial court addressed the merits of Landlord’s first issue —
determining that Tenant’s obligation to pay rent was suspended because
Tenant had been constructively evicted by Landlord’s failure to repair the
premises, see TCO at 7-8 — we may affirm the trial court on any basis. See,
e.g., In re T.P., 78 A.3d 1166, 1170 (Pa. Super. 2013) (“[I]t is a well-settled
doctrine in this Commonwealth that a trial court can be affirmed on any valid
basis appearing of record. The precept may be applied even though the
reason for sustaining the judgment was not raised in the trial court, relied on
by that court in reaching its decision, or brought to the attention of the
appellate courts.”) (citations and internal quotation marks omitted).
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In Landlord’s second issue, he argues that, even assuming arguendo
that Landlord had any obligation under the lease agreement, “the delay in
notice under the Fire Clause only required payment of rent due.” Landlord’s
Brief at 27 (unnecessary capitalization and emphasis omitted). Specifically,
the at-issue Fire Clause in the lease provided the following:
21. FIRE CLAUSE: The TENANT hereby agrees to notify LESSOR
of any damages to the leased PREMISES by fire or other hazard
and also of any dangerous or hazardous condition within the
leased PREMISES immediately upon the occurrence of such fire or
other hazard or discovery of such condition.
Upon occurrence of a fire, repairs shall be made by LESSOR as
soon as reasonably may be done unless the costs of repairing the
PREMISES exceed 25% of the replacement cost of the building in
which case the LESSOR may, at its option, terminate the lease by
giving TENANT written notice of termination within forty-five (45)
days of the date of the occurrence.
If the LESSOR does not terminate this Lease pursuant to the
paragraph above, then LESSOR has forty-five (45) days after the
date of the occurrence to give written notice to TENANT setting
forth its unqualified commitment to make all necessary repairs or
replacements, the projected date of commencement of such
repairs, and the LESSORS best good faith estimate of the date of
completion of the same.
If the LESSOR fails to give such notice, or if the date of
completion is more than 90 days after the date of
occurrence, then the TENANT may, at its option, terminate
this lease and the LESSOR will be obliged to refund to the
TENANT any rent allocable to the period subsequent to the
date of the fire.
Lease at ¶ 21 (emphasis added).
Landlord argues that the Fire Clause is clear that, in the event of a fire,
Landlord “may at his sole discretion repair the leasehold or terminate the
lease. If [Landlord] elected to do neither, then [T]enant may terminate the
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lease and receive a refund of rents paid post[-]fire.” Landlord’s Brief at 28-
29. Thus, according to Landlord, Tenant would only be entitled, pursuant to
the lease, to receive — at most — a refund of the rent payments he made
subsequent to the fire. Id. at 29. However, Landlord observes that Tenant
“did not pay any rent, so no rent refund can be due and owing.” Id.
Therefore, Landlord concludes that, as a matter of law, Tenant was not entitled
to any damages. See id.
Once more, Landlord fails to show how he raised this issue below. See
Pa.R.A.P. 2117(c), supra; Pa.R.A.P. 2119(e), supra; Youst, supra; Young,
supra; Baker, supra. Based on our review of the record, it also appears
that, yet again, Landlord did not present this theory until he filed his post-trial
motion. See footnote 8, supra. Consequently, we also deem waived
Landlord’s second issue. E.S. Management, supra; see also Brown,
supra; Young, supra. No relief is due.11
Tenant’s Appeal
We now turn to Tenant’s appeal. He states only one issue for our
review:
Whether the lower court erred in failing to award prejudgment
interest on the breach[-]of[-]written[-]contract award where the
interest is based upon a sum that is fixed or has ascertainable
monetary value in accordance with the Restatement (Second) of
Contracts [§] 354(1)?
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11 Again, even though the trial court reached the merits of Landlord’s second
issue — opining that the Fire Clause does not limit the damages Tenant can
recover in a breach-of-contract action, see TCO at 8 — we may affirm the trial
court on any basis. See In re T.P., supra.
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Tenant’s Brief at 4.
To understand Tenant’s prejudgment interest argument, we must give
further background on Tenant’s subleases and the jury’s breach-of-written-
contract award. Tenant describes that:
In accordance with the agreement, [Tenant] was authorized to
sublease parts of the leased premises to others and to collect the
rents. Thereafter, [Tenant] entered into sublease agreements to
rent three separate areas of the property with total rental income
in excess of $120,000[,] at the end of the terms of the subleases.
On September 21, 2004, the leased property was destroyed by a
fire.[12] Following the fire, [Landlord] informed [Tenant] that he
would use his insurance payment to repair the property and that
his lease would continue. Repairs were immediately made to the
part of the building housing a laundromat owned and operated by
[Landlord]. As the days and weeks passed[, Landlord] continued
to assure [Tenant] that his leasehold would be restored.
The [l]ease agreement allowed [Landlord] the opportunity to
terminate the lease by notifying [Tenant] in writing that the lease
was terminated within 45 days of the fire. No notice of termination
was given to [Tenant] within 45 days. Instead, [Landlord] waited
until after he received his insurance payment before sending a
notice of termination to [Tenant], 85 days after the fire damaged
the building. [Landlord] terminated the lease, preventing
[Tenant] from earning income from the leased property based
upon existing sublease agreements.
Id. at 5-6 (internal citations omitted). Because of the foregoing, Tenant
presently argues that he should receive prejudgment interest on the jury’s
$120,500 breach-of-written-contract award, which he says reflects the total
amount of rental income he lost from the subleases. See id. at 13.
With respect to prejudgment interest, this Court has explained:
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12According to the trial court, the fire occurred on September 29, 2004, not
September 21, 2004. See TCO at 2.
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“[A] court has discretion to award or not award prejudgment
interest on some claims, but must or must not award prejudgment
interest on others.” Cresci Const. Services, Inc. v. Martin, 64
A.3d 254, 258 (Pa. Super. 2013) (quoting, in part, Fidelity Bank
v. Com. Marine and Gen. Assurance Co., 592 F. Supp. 513, 522
(E.D. Pa. 1984)) (internal quotations and original brackets
omitted). In accordance, Pennsylvania has followed the
Restatement (Second) of Contracts § 354, which provides:
(1) If the breach consists of a failure to pay a definite sum
in money or to render a performance with fixed or
ascertainable monetary value, interest is recoverable from
the time for performance on the amount due less all
deductions to which the party in breach is entitled.
(2) In any other case, such interest may be allowed as
justice requires on the amount that would have been just
compensation had it been paid when performance was due.
Restatement (Second) of Contracts § 354. Further, the comments
to this section state, in pertinent part:
c. Where amount due is sufficiently definite. Under the rule
stated in Subsection (1), a party is not chargeable with
interest on a sum unless its amount is fixed by the contract
or he could have determined its amount with reasonable
certainty so that he could have made a proper tender.
Unless otherwise agreed, interest is always recoverable for
the non-payment of money once payment has become due
and there has been a breach. This rule applies to debts due
for money lent, goods sold or services performed, including
installments due on a construction contract. The fact that
the breach has spared some expense that is uncertain in
amount does not prevent the recovery of interest. The sum
due is sufficiently definite if it is ascertainable from the
terms of the contract, as where the contract fixes a price
per unit of performance, even though the number of units
performed must be proved and is subject to dispute. The
same is true, even if the contract does not of itself create a
money debt, if it fixes a money equivalent of the
performance. It is also true, even if the contract does not
fix a money equivalent of the performance, if such an
equivalent can be determined from established market
prices. The fact that the extent of the performance rendered
and the existence of the market price must be proved by
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evidence extrinsic to the contract does not prevent the
application of these rules.
…
d. Discretionary in other cases. Damages for breach of
contract include not only the value of the promised
performance but also compensation for consequential loss.
The amount to be awarded for such loss is often very difficult
to estimate in advance of trial and cannot be determined by
the party in breach with sufficient certainty to enable him to
make a proper tender. In such cases, the award of interest
is left to judicial discretion, under the rule stated in
Subsection (2), in the light of all the circumstances,
including any deficiencies in the performance of the injured
party and any unreasonableness in the demands made by
him.
Restatement (Second) of Contracts § 354 cmts. c, d….
This Court has expounded on Section 354 as follows:
[Section] 354 commands that prejudgment interest is
awarded as a matter of right in four limited circumstances,
which all require an examination of the contract. In other
words, a court examines whether the contract was to pay,
or render a performance for, a monetary amount defined in
the contract; render a performance for a monetary amount
that can be calculated from standards set forth in the
contract; or render a performance for a monetary amount
calculated from the established market prices. The disputed
amount must be either specified in the contract or
ascertained from the terms of the contract such that at the
time of the breach, the breaching party can proffer a tender.
The disputed amount, in other words, must be liquidated at
the time of the breach as a prerequisite for prejudgment
interest. In all other circumstances, including an award of
consequential damages, prejudgment interest is awarded as
a matter of discretion.
Cresci, 64 A.3d at 264-65 (emphasis added; internal citations
omitted).
To illustrate, in Cresci, the appellant entered into a contract with
a construction company for it to build a home for the appellant for
$184,730. Id. at 256. Aside from the cost of building the home,
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“the contract did not specify or refer to any monetary values,
established market prices, or other fixed standards regarding a
determination of mortgage expenses, legal expenses, inspection
fees, and the costs of maintaining two homes in the event of a
breach.” Id. After some time, the construction company filed a
complaint against the appellant, alleging that the appellant
impeded the efforts of the construction company in completing the
contract, and claimed that the appellant owed $34,378.56 on the
balance of the contract. Id. at 256-57. In turn, the appellant
counterclaimed for, inter alia, breach of contract, asserting that
the construction company “had failed to complete several of the
contract’s required obligations.” Id. at 257. Following a jury trial,
the jury found that the construction company breached the
contract and awarded the appellant $66,000 in breach-of-contract
damages. Id. However, the trial court did not award the
appellant prejudgment interest, determining that “the damages
involved in this matter are simply not of the kind envisioned by §
354(1) of the Restatement[,]” and that the appellant “was
adequately compensated by the jury’s verdict, and no further
prejudgment interest was warranted.” Id. at 258 (citations
omitted).
On appeal, the appellant argued that “pre-judgment interest in a
breach of contract matter is a legal right.” Id. (citation omitted).
He averred that “he was forced to incur additional mortgage
expenses, legal expenses, inspection fees, and associated costs
with maintaining two properties since the home was
uninhabitable[,]” and “theorize[d] that because the sums he
claim[ed] [were] ascertainable, § 354(1) of the Restatement
(Second) of Contracts applie[d] and § 354(2) … [did] not.” Id.
(internal quotation marks and citations omitted). This Court,
however, disagreed. Significantly, we observed that the appellant
did “not argue that the contract provided for the payment of
additional mortgage expenses, legal expenses, inspection fees,
and associated costs with maintaining two properties[,]” or that
“these sums constituted the reasonable costs of completing the
construction contract or correcting the defective work.” Id.
(internal quotation marks and citations omitted). Further, we
reasoned:
In the case before us, we examine the contract to determine
whether [the a]ppellant is entitled to prejudgment interest
as of right. The contract specifically provided for the
performance of a construction of a home in exchange for
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$184,730, a monetary amount defined by the contract.
Thus, $184,730 is a liquidated, ascertainable sum.
The contract, however, did not provide for a “performance”
of “mortgage expenses, legal expenses, inspection fees, and
associated costs with maintaining two properties.” The
contract also did not reference or permit a calculation of a
monetary value for those items. [The construction
company], therefore[,] could not have tendered a proffer to
[the a]ppellant for those items, which necessarily required
a breach of contract to render a “performance” of those
items. [The construction company] is not charged with
interest as of right on the jury’s award of $66,000, because
that amount was not fixed by the construction contract and
[the construction company] could not have ascertained that
sum by construing the terms of the contract. Accordingly,
the jury’s non-specific award of $66,000 does not represent
a liquidated, ascertainable sum owed under the contract.
The jury’s award … “represents a loss incurred by [the
a]ppellant as a consequence” of [the construction
company’s] breach “of the promised performance” to
construct the home. Thus, contrary to [the a]ppellant’s
claim, an award of prejudgment interest on consequential
damages is not awarded as a matter of right but is instead
left to the court’s discretion. [The a]ppellant, however,
elected not to order the trial transcript. Thus, this Court
cannot ascertain whether the trial court abused its discretion
in declining to award prejudgment interest on an
unliquidated sum.
Cresci, 64 A.3d at 264-66 (internal citations, original brackets,
footnotes omitted…).
Krishnan v. Cutler Group, 171 A.3d 856, 873-76 (Pa. Super. 2017)
(emphasis omitted).
Here, Tenant argues,
[t]he market price for the … leasehold was set by the amount that
the [sub-]tenants were willing to pay for each sublease. Once the
lease was wrongfully terminated by [Landlord], [Tenant] lost
rental income on the three leases of $56,000, $14,400, and
$50,400. The total loss of these rent payments equals the amount
of the jury verdict ($120,500). The loss of rental income clearly
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qualifies as a “value of which in money is ascertainable from
established market prices of the subject matter.” Davis [v.
Borough of Montrose, 194 A.3d 597, 613 (Pa. Super. 2018)].
Tenant’s Brief at 13 (some internal citations omitted). We disagree.
The lease agreement between Landlord and Tenant required that Tenant
pay Landlord $90,000 over three years, in installments of $2,500 per month,
to lease the premises. Lease at ¶ 3. These amounts constitute an
ascertainable, liquidated sum under the lease.13 In contrast, with respect to
Tenant’s subletting the premises, the lease merely sets forth that:
13 A. ASSIGNMENT AND SUBLETTING: The Tenant may, with the
consent of the Landlord, which consent shall not be unreasonably
withheld, sublease, or assign this Lease or its rights under this
Lease. In such event, the Tenant shall remain liable for the
payment of all rent required to be paid under this Lease, and for
the performance of all terms, covenants, and conditions
undertaken by the Tenant.
Lease at ¶ 13A. This provision makes no mention of Landlord’s having to
reimburse Tenant for lost sublease profits that Tenant sustains due to a breach
of the lease, and Tenant does not point us to any other provision in the lease
providing for such reimbursement. Similar to the circumstances in Cresci,
the jury’s award of $120,500 for lost sublease profits in the case sub judice
____________________________________________
13 However, Tenant does not argue that the jury’s $120,500 award
represented rent Tenant had paid to Landlord to lease the premises and, even
if he had made such an argument, the record clearly would not support it. Cf.
Davis, 194 A.3d at 614 (“[T]he contract provided for a specified amount –
$59,940 annual rent, payable in monthly installments of $4,995, plus all real
estate taxes, insurance, utilities, and any and all maintenance, upkeep, and
repairs. Because [the b]orough breached the lease agreement to pay a
definite sum of money, [the l]andlord was entitled to pre-judgment interest
as a matter of law.”) (citations omitted).
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was not fixed by the lease, and Landlord could not have ascertained that sum
by construing the terms of the lease.14 Thus, we conclude that the $120,500
award does not represent a liquidated, ascertainable sum owed under the
lease; instead, it is a loss incurred by Tenant as a consequence of the
Landlord’s breach. Accordingly, Tenant is not entitled to prejudgment interest
as a matter of right.15 No relief is due.
Judgment affirmed.
Judgment Entered.
Joseph D. Seletyn, Esq.
Prothonotary
Date: 11/18/2020
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14 In fact, Tenant recognizes that the amount of $120,500 “was a sum
ascertainable based upon the terms of the subleases[,]” not based upon
the terms of the at-issue lease between Landlord and Tenant. Tenant’s Brief
at 8 (emphasis added). Further, in addition to the lease not contemplating
reimbursement for lost sublease profits, the trial court also discerned that
“there is no specific language in the lease that would describe the income
[Tenant] was receiving from those subleases. Nor does it appear that any
detailed subleases were attached to make any lost income ascertainable.”
TCO at 5.
15 Tenant does not challenge the trial court’s decision to deny him
prejudgment interest as a matter of discretion under Section 354(2). See
TCO at 5-6. Accordingly, we do not address that decision.
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