J.C. Penney Corp. v. GFM 23 ( 2023 )

J-A25034-22
NON-PRECEDENTIAL DECISION - SEE SUPERIOR COURT O.P. 65.37
J.C. PENNEY CORPORATION, INC., : IN THE SUPERIOR COURT OF
A DELAWARE CORPORATION : PENNSYLVANIA
:
Appellant :
:
:
v. :
:
: No. 238 WDA 2022
GFM 23, LLC, A PENNSYLVANIA :
LIMITED LIABILITY COMPANY, :
WILLIAM G. MCCONNELL, IN HIS :
CAPACITY AS TRUSTEE OF THE :
WILLIAM G. MCCONNELL FUNDED :
REVOCABLE TRUST AGREEMENT, :
DATED FEBRUARY 1, 2000, EUGENIA :
F. MCCONNELL, IN HER CAPACITY :
AS TRUSTEE OF THE EUGENIA F. :
MCCONNELL FUNDED REVOCABLE :
TRUST AGREEMENT, DATED :
FEBRUARY 1, 2000, G. THOMAS :
MCCONNELL AND CHARLENE S. :
MCCONNELL, HIS WIFE, MARY :
ELEANOR MILHEIM AND IRVINE G. :
MILHEIM, HER HUSBAND, MARTHA :
M. BEEZER AND GENE BEEZER, HER :
HUSBAND, WILLIAM G. MCCONNELL, :
JR., AND JENNIFER S. MCCONNELL, :
HIS WIFE, ANNE M. SHANNON AND :
MICHAEL R. SHANNON, HER :
HUSBAND, JOHN C. MCCONNELL :
AND SHANNON K. MCCONNELL, HIS :
WIFE, CATHERINE M. METTENBURG :
AND JOSEPH M. METTENBURG, HER :
HUSBAND, TERRENCE C. :
MCCONNELL, CYNTHIA M. :
ANDREYKO AND GREGORY M. :
ANDREYKO, HER HUSBAND, :
CATHLEEN L. HERBERGER AND :
TIMOTHY F. HERBERGER, HER :
HUSBAND, MATTHEW B. MCCONNELL :
AND ANGELA M. MCCONNELL, HIS :
J-A25034-22
WIFE, MATTHEW B. MCCONNELL, IN :
HIS CAPACITY AS TRUSTEE OF THE :
MCCONNELL FARMS REVOCABLE :
TRUST, DATED DECEMBER 11, 2017, :
STEPHEN G. MILHEIM, IN HIS :
CAPACITY AS TRUSTEE OF THE :
STEPHEN G. MILHEIM REVOCABLE :
TRUST, DATED JULY 11, 2013, :
WILLIAM G. MILHEIM AND :
JACQUELINE B. MILHEIM, HIS WIFE, :
ANNA MARIE MILHEIM, GEORGE H. :
MILHEIM, MARY MICHELE MILHEIM, :
HANNAH LEE MILHEIM, REBECCA B. :
SMITH, AND WILLIAM D. SMITH, :
HER HUSBAND, DAVID G. BEEZER :
AND SHANNON BEEZER, HIS WIFE, :
JOHANNA ELEANOR GIBSON AND :
JOHN RYAN GIBSON, HER HUSBAND
Appeal from the Order Entered January 28, 2022
In the Court of Common Pleas of Mercer County Civil Division
at No(s): 2019-3655
BEFORE: KUNSELMAN, J., NICHOLS, J., and McCAFFERY, J.
MEMORANDUM BY McCAFFERY, J.: FILED: June 23, 2023
In these cross-actions for declaratory judgment, J.C. Penney
Corporation, Inc., a Delaware corporation (Penney), appeals from the order
entered in the Mercer County Court of Common Pleas, declaring there is no
commercial lease currently binding the parties,1 and thus Penney is a tenant
____________________________________________
1 The defendants in the underlying proceedings, who were also the initial
appellees in this appeal, were: GFM 23, LLC; multiple members of the
McConnell family; and other individuals, some in their individual capacities
and some as trustees of trusts. They co-owned the property at issue in this
matter.
(Footnote Continued Next Page)
-2-
J-A25034-22
at will. Penney argues the trial court erred in: (1) interpreting the phrase,
“any extension thereof,” appearing in the parties’ 1967 agreement, to mean
only the extensions set forth in Penney’s original 1966 sublease, and did not,
as Penney argues, include its 2003 amended sublease agreement; and (2)
finding the 2003 amended agreement was not an “extension” of the 1966
agreement. After careful review, we affirm.
I. Facts
In reviewing the parties’ claims, we must examine four related
agreements. The underlying facts are generally not disputed, although the
parties disagree as to the legal effect of some events. See N.T. at 4. We
glean the following history from the parties’ well-presented arguments at the
November 23, 2021, hearing before the trial court, as well as the court’s
opinion.
____________________________________________
On October 17, 2022, Butterfli Holdings 011 LLC (Butterfli) filed a
petition with this Court to intervene and be substituted as appellee. Butterfli
averred it purchased the property at issue on August 5, 2022, and assumed
all of the prior owners’ rights, title, and interests in the property. This Court
granted the petition to be substituted as appellee on October 20th. Both the
original appellees and Butterfli are represented by the same attorney, William
McConnell, Jr., Esquire, who himself is part of the McConnell family that owned
the property. See N.T., 11/23/21, at 33. For ease of discussion, as the factual
history involves numerous parties and their successors, the identities of whom
are not germane to our legal analysis, we will refer to the original owners of
the property and their successors collectively as “Owner.”
-3-
J-A25034-22
Beginning in the 1940s, Owner owned land in Hermitage, Mercer
County. N.T. at 6. On May 31, 1966, Owner executed a commercial ground
lease (1966 Ground Lease) with Crown Construction Company (Crown), as
lessor. Crown constructed the Shenango Valley Mall on the property, and then
owned the mall. Id. at 6, 14. The lease between Owner and Crown had a
35-year term and provided three five-year renewal periods, for a total 50-year
term.
On October 27, 1966, Crown entered into a sublease with Penney (1966
Penney Sublease), which had an initial term of 25 years. The sublease
provided a “15-year automatic extension” should Penney expand its store, but
“that expansion never occurred” and thus this extension was not triggered.
N.T. at 7. The sublease further provided Penney the option to extend the
sublease by four consecutive five-year periods.2
Three months thereafter, on January 23, 1967, Owner, Crown, and
Penney executed an “Owner Agreement.” Its purpose was to protect Penney’s
sublease interests in the event of termination of the 1966 Ground Lease. N.T.
at 11-12. Owner would stand in the place of Crown and be bound by the
terms of Penney’s sublease. Trial Ct. Op., 1/28/22, at 3. Pertinently,
Paragraph 4(a) set forth the duration of the Owner Agreement:
____________________________________________
2 If all of the above extensions were made, the total term of the sublease
would have been 60 years — 10 years longer than the maximum possible
ground lease between Owner and Crown. N.T. at 9-10.
-4-
J-A25034-22
4. If Penney shall perform the obligations under the Penney
Lease[, Owner] covenants and agrees that:
a. Penney shall have and enjoy during the term of the
Penney Lease and any extension thereof[,] the quiet and
undisturbed possession of the premises . . . and Penney’s
possession and rights under the Penney Lease shall not be
adversely affected in any way by reason of default by
Crown[,] termination or cancellation of the [G]round
[L]ease . . . .
Owner Agreement, recorded 9/18/67, at 1-2 (emphasis added), Exh. 2 to
Penney’s Complaint in Action for Declaratory Judgment, 11/13/19.
It is the interpretation of the above phrase, “any extension thereof” —
not defined in the Owner Agreement —that is the subject matter of the parties’
cross-declaratory actions. Owner contends “any extension thereof”
unambiguously means only the extensions set forth in the 1966 Penney
Sublease — i.e., the automatic 15-year extension if Penney expanded its
store, along with the four optional five-year extensions. See N.T. at 18.
Penney exercised the entire 25 year-initial term of its 1966 sublease, as
well as two of the four optional five-year extensions. Accordingly, the new
end date of the sublease became January 31, 2004. Trial Ct. Op. at 3; N.T.
at 10. However, prior to this date, on July 7, 2003, Crown and Penney entered
into an agreement, entitled “Lease Extension/Modification Agreement” (2003
Penney Sublease). This agreement did not include Owner as a party. The
trial court noted the 2003 agreement
substantially altered the terms of the [1966 Penney Sublease] in
various ways, including, inter alia:
-5-
J-A25034-22
a. Extend[ing] the “base term” for 5 years.
b. Offering four . . . additional five . . . year extensions[.] If
fully exercised, the [2003 Penney Sublease] would have
terminated on Jan. 31, 2029 (later than any extension
contemplated in the [1966 Penney Sublease]).
C. Alter[ing] terms of “Net Retail Sales” as specified under
[the 1966 Penney Sublease, which were used to calculate
rent, and]
d. Add[ing] the term “Reserved Tracts,” putting substantial
limitations on [Crown’s] rights to alter the premises.
Trial Ct. Op. at 3-4.
Penney’s central argument in this matter is that: (1) the phrase, “any
extension thereof,” at Paragraph 4(a) of the Owner Agreement,
unambiguously means any extension whatsoever, without any limitations; (2)
the phrase thus encompasses the 2003 Penney Sublease; and accordingly (3)
pursuant to the Owner Agreement, Owner continues to stand in Crown’s place
and is bound to recognize Penney’s sublease rights.3 See N.T. at 35. Owner,
on the other hand — in addition to its above argument — contends the 2003
Penney Sublease is not in fact an “extension” of the 1966 Penney Sublease
because it altered so many material terms, and instead, the 2003 sublease is
an amended or even new sublease. Id. at 18, 27. Finally, Owner avers that
when it executed the Owner Agreement in 1967, it contemplated only the
____________________________________________
3 Penney argues it has one remaining option to extend the 2003 Penney
Sublease by five years, through 2029. N.T. at 41.
-6-
J-A25034-22
1966 Penney Sublease, and never consented to being bound by any potential
agreement to be made 50 years in the future. Id. at 18.
Returning to the factual history of this case, we summarize that Crown’s
rights under the 1966 Ground Lease were assigned several times. The final
assignee defaulted on the Ground Lease in 2017 or 2018.4 N.T. at 13. Owner
initiated an action to terminate the Ground Lease, and by court order of
January 18, 2019, it was terminated. As a result, Owner came to own, in
addition to the land, the mall and the buildings upon it. Id. at 14.
According to Owner, it considered Penney, at that point, to be a holdover
tenant and accepted rent from Penney accordingly. N.T. at 30. Penney, on
the other hand, contends that when it provided Owner with a copy of the
Owner Agreement, Owner did not deny that the Owner Agreement was in
effect, nor did it inform Penney of its purported month-to-month or at-will
tenant status. Id. at 46-47. Instead, Penney claims, Owner merely replied it
would “step into the shoes of the landlord on the [Penney] lease,” which
signfied Owner’s understanding that the Owner Agreement and 2003 Penney
Sublease remained in effect. Id. at 47.
____________________________________________
4The final assignee was Iowa Square Realty. Penney provides the Mercer
County Court of Common Pleas trial docket number for this lawsuit as 2018-
3258. Penney’s Brief at 16.
-7-
J-A25034-22
In any event, on October 23, 2019, Owner notified Penney that, in light
of the dissolution of the 1966 Ground Lease between Crown and Owner,
Penney was now a tenant at will.
II. Procedural History
On November 13, 2019, Penney filed a complaint for declaratory
judgment. Owner filed an answer, new matter, and counterclaim, likewise
seeking declaratory judgment.5 The trial court heard oral argument on
November 23, 2021, portions of which are summarized above.
On January 28, 2022, the court issued the underlying order, declaring:
(1) the Owner Agreement phrase, “any extension thereof,” unambiguously
bound Owner only to the 1966 Penney Sublease; (2) the 2003 Penney
Sublease was not an extension of the 1966 sublease, as it made material
modifications; and (3) accordingly, Owner’s obligations under the Owner
____________________________________________
5 We note that on March 23, 2020, the entire bench of the Mercer County
Court of Common Pleas recused from this matter, as it involves a Mercer
County commissioner. The Honorable Harry Knafelc, Senior Judge of the
Beaver County Court of Common Pleas, was accordingly specially appointed
to preside over this matter.
On May 29, 2020, Penney filed a suggestion of bankruptcy and notice of
automatic stay. The bankruptcy was discharged 10 months later, and on April
9, 2021, the court ordered the parties to resume this litigation.
Meanwhile, on January 6, 2020, Owner filed a motion for summary
judgment, and on September 14, 2021, Penney filed a cross-motion for
summary judgment. No rulings on these motions appear in the record or on
the trial docket.
-8-
J-A25034-22
Agreement were extinguished by the execution of the 2003 Penney Sublease.
Order, 1/28/22, at 15-16. The court thus concluded there was presently no
contractual relationship between Owner and Penney and, because Owner
continued to accept rent, Penney was a tenant at will. Id. at 16.
Penney filed a timely notice of appeal, and in response to the trial court’s
order, filed a Pa.R.A.P. 1925 statement of errors complained of on appeal.6
III. Statement of Questions Involved
Penney presents six related issues for this Court’s review:7
1. Does the term “any extension thereof” in Section 4(a) of the
Owner Agreement encompass any extension of the original [1966
Penney Sublease’s] term — including those provided in the 2003
[Penney Sublease] — and not only the four five-year extensions
specified in the original [1966 Penney Sublease]?
2. Does [Owner’s] express consent to and approval of the original
[1966 Penney Sublease], including the provision that the original
[1966 Penney Sublease] could be amended by Penney and
[Crown] without [Owner’s] consent or approval, confirm that
Section 4(a) of the Owner Agreement encompasses any extension
and/or amendment of the original [1966 Penney Sublease],
including the 2003 [Penney Sublease]?
3. Does the 2003 [Penney Sublease] constitute an extension and
amendment of the original Penney Lease rather than an entirely
new lease agreement that extinguished the original [1966 Penney
Sublease]?
____________________________________________
6Penney’s Rule 1925(b) statement raised 22 enumerated claims. We remind
counsel that a prolix statement presenting “an outrageous number of issues”
may “circumvent[ ] the meaning and purpose of Rule 1925(b) and . . . thereby
effectively preclude[ ] appellate review of the issues[.]” See Kanter v.
Epstein, 866 A.2d 394, 401 (Pa. Super. 2004).
7 We have reordered Penney’s issues for ease of review.
-9-
J-A25034-22
4. Did the trial court err in considering provisions of agreements
outside the Owner Agreement, including an insert to page 18(a)
of the [1966 Penney Sublease], to support a narrow interpretation
of Section 4(a) of the Owner Agreement?
5. Should [Owner’s] conduct in 2019 be considered in determining
the proper interpretation of the term “any extension thereof” in
Section 4(a) of the Owner Agreement?
6. If the Owner Agreement applies to any extension of the [1966
Penney Sublease] and not just the extensions set forth in the
original [1966 Penney Sublease], are the provisions of the [1966
Penney Sublease] as amended by the 2003 [Penney Sublease]
enforceable against [Owner] under the Owner Agreement?
Appellant’s Brief at 5-7.
IV. Standard of Review & Relevant Authority
We first consider the relevant standard of review: “The interpretation
of any contract is a question of law and this Court’s scope of review is plenary.
[W]e need not defer to the conclusions of the trial court and are free to draw
our own inferences.” Sw. Energy Prod. Co. v. Forest Res., LLC, 83 A.3d
177, 187 (Pa. Super. 2013) (citation omitted).
This Court has stated:
When interpreting the language of a contract, the intention of the
parties is a paramount consideration. “In determining the intent
of the parties to a written agreement, the court looks to what they
have clearly expressed, for the law does not assume that the
language of the contract was chosen carelessly.”
When interpreting agreements containing clear and unambiguous
terms, we need only examine the writing itself to give effect to
the parties’ intent. The language of a contract is unambiguous if
we can determine its meaning “without any guide other than a
knowledge of the simple facts on which, from the nature of the
language in general, its meaning depends.” “When terms in a
- 10 -
J-A25034-22
contract are not defined, we must construe the words in
accordance with their natural, plain, and ordinary meaning.” As
the parties have the right to make their own contract, we will not
modify the plain meaning of the words under the guise of
interpretation or give the language a construction in conflict with
the accepted meaning of the language used.
On the contrary, the terms of a contract are ambiguous if the
terms are reasonably or fairly susceptible of different
constructions and are capable of being understood in more than
one sense. Additionally, we will determine that the language is
ambiguous if the language is “obscure in meaning through
indefiniteness of expression or has a double meaning.” Where the
language of the contract is ambiguous, the provision is to be
construed against the drafter.
State Farm Fire & Cas. Co. v. PECO, 54 A.3d 921, 928 (Pa. Super. 2012)
(State Farm) (citations omitted). “The fact that the parties have different
interpretations of a contract does not render the contract ambiguous.” Tuthill
v. Tuthill, 763 A.2d 417, 420 (Pa. Super. 2000) (en banc) (citation omitted).
“The whole instrument must be taken together in arriving at contractual
intent.” Mitch v. XTO Energy, Inc., 212 A.3d 1135, 1138 (Pa. Super. 2019).
V. Plain Meaning of “Any Extension Thereof”
In its first issue, Penney maintains the unambiguous, plain, ordinary,
Merriam-Webster dictionary meaning of the word, “any,” means “any
whatsoever[,] without restriction or limitation.” Penney’s Brief at 38, 39
(emphasis omitted). Accordingly, the phrase, “any extension thereof,” within
the Owner Agreement, applies to the 2003 Penney Sublease. Id. at 40-41
(emphasis added). Penney avers the trial court’s limitation on the phrase,
“any extension thereof,” was “an unjustifiably restrictive reading.” Id. at 33.
- 11 -
J-A25034-22
Penney further contends the court’s interpretation “undermines a central
purpose of the Owner Agreement, leaving Penney with no protection under its
lease upon the termination of the Ground Lease” between Crown and Owner.
Id.
In its second issue, Penney avers the trial court erred in finding Owner
cannot be held to the terms of the 2003 Penney Sublease, where it did not
participate in the negotiation thereto. Penney’s Brief at 45-46. In support,
Penney contends the court failed to consider the statement in the Owner
Agreement, that Owner “hereby consents to and approves of the [1966
Penney Sublease,]” which in turn stated it could be modified by the parties
thereto — Penney and Crown. Id. at 12. Penney reads these terms together
to mean Owner expressly authorized Penney and Crown to amend the 1966
Penney Sublease without Owner’s prior approval. Id. at 42-43, citing Owner
Agreement at ¶ 3. It contends, “If the Owner Agreement meant [Owner]
approved of the [1966 Penney Sublease] only in its original, unmodified
form, it would say so.” Penney’s Brief at 44-45.
We agree with Penney’s initial argument — that the plain meaning of
the phrase, “any extension thereof,” was not limited to the extensions
specifically set forth in the 1966 Penney Sublease.
As stated above, the trial court found the term, “any extension thereof,”
within Paragraph 4(a) of the Owner Agreement, was unambiguous. Trial Ct.
Op. at 6. Observing that a contract “should be a read as a whole” and “must
- 12 -
J-A25034-22
be interpreted to give effect to all of its provisions[,]” the court considered
both subsections of Paragraph 4:
4. If Penney shall perform the obligations under the Penney
Lease[, Owner] covenants and agrees that:
a. Penney shall have and enjoy during the term of the
Penney Lease and any extension thereof, the quiet and
undisturbed possession of the premises . . . and Penney’s
possession and rights under the Penney Lease shall not be
adversely affected in any way by reason of default by
Crown[,] termination or cancellation of the [G]round
[L]ease . . . .
b. In the event of the termination or cancellation of the
[G]round [L]ease, the possession by Penney of the
premises . . . under . . . the Penney Lease and all rights of
Penney under the Penney Lease will be fully recognized and
protected by [Owner], and [Owner] will assume and perform
all the obligations set forth in the Penney Lease on the part
of [Crown.]
See id. (emphases added); Owner Agreement at 1-2. The court reasoned
that when the above references to “the Penney Lease” are read together, it is
clear the Owner Agreement only endured through the base term of the 1966
Penney Sublease, its 15 year unexercised extension, and the four optional
five-year extensions. Trial Ct. Op. at 7.
While we agree that terms of a “whole instrument must be taken
together in arriving at contractual intent,” Mitch, 212 A.3d at 1138, we
disagree with the trial court’s rationale — that the phrasing in Paragraph 4(b)
lends itself to an interpretation that “any extension thereof” means only the
extensions specifically set forth in the 1966 Penney Sublease. Instead, the
phrases emphasized by the court — “under the Penney Lease” — merely lack
- 13 -
J-A25034-22
the additional language, “and any extensions thereof,” that is present in
Paragraph 4(a). This dissimilarity, alone, does not support this particular
finding by the trial court.
Instead, as the phrase, “any extension thereof,” is not defined in the
Owner Agreement, we agree with Penney that we must construe these “words
in accordance with their natural, plain, and ordinary meaning.” See State
Farm, 54 A.3d at 928. We further agree the unambiguous, plain, ordinary
meaning of “any” connotes no limitations. See Penney’s Brief at 35-38 (citing
Merriam-Webster and www.dictionary.com definitions of the word “any”).
Furthermore, we observe the “1966 Penney Sublease” is not
synonymous with its 25-year base term. In other words, the terms of the
1966 Penney Sublease, when read as a whole, provide not only for the initial
sublease term, but also the specified extensions. Thus, we interpret the
extended phrase in the Owner Agreement, “the term of the Penney Lease and
any extension thereto,” to mean: (1) the 25-year initial term, the store
expansion-triggered 15-year extension, and the four optional five-year
extensions; and (2) any additional extensions properly entered into between
Penney and Crown.8 For the foregoing reasons, we conclude Owner would be
____________________________________________
8 Because we conclude the phrase, “any extension thereof” is unambiguous,
we limit our review to the writing itself, and need not reach Penney’s additional
arguments that the trial court’s interpretation undermines the purpose of the
Owner Agreement. See Penney’s Brief at 33. We likewise do not review the
(Footnote Continued Next Page)
- 14 -
J-A25034-22
bound to recognize any properly-entered “extension.” We thus now review
the trial court’s finding that the 2003 Penney Sublease was not, however, an
“extension” of the 1966 sublease.
VI. Effect of the 2003 Penney Sublease
In its third issue, Penney asserts the trial court erred in finding the 2003
Penney Sublease was not an extension, amendment, or modification, to/of the
1966 Penney Sublease, but instead an entirely new lease. Penney’s Brief at
64. Penney maintains that parties may always modify a written contract, and
here, given the length of time it has continuously operated a store at the mall,
“[i]t is not surprising . . . that Penney and Crown amended the Penney Lease
at various times[.]” Id. at 66. Nevertheless, Penney avers, “[m]ultiple
sections of the original Penney Lease remained unchanged by the 2003”
agreement, including
the sections titled: Alterations, Condemnation, Continued
Possession by Tenant, Covenant of Title, Authority and Quiet
Possession, Damage Clause, Default Clause, Lease Binding on
Heirs, Other Tenancies, Premises, Pylon Signs, Repairs,
Restrictions Affecting Tenant, Signs, Subletting and Assigning,
Subordination, and Use Of Premises.
Id. at 66-67 (quotation marks omitted). Penney alleges the trial court also
failed to consider Section 17 of the 2003 Penney Sublease, which provided
____________________________________________
trial court’s finding that Owner did not intend to bind itself to future
agreements not yet executed by Penney and Crown. See Trial Ct. Op. at 9.
- 15 -
J-A25034-22
that “all of the provisions of the original Penney Lease not amended by the
2003 [lease] remained in full force and effect.” Id. at 68. We disagree.
As stated above, the trial court found the 2003 Penney Sublease
significantly altered numerous material terms — including the length of the
base term, the number of optional extensions, the timing and terms of
renewal, and the rent calculation scheme.9 Trial Ct. Op. at 11. Penney does
not dispute this rationale, notwithstanding its listing of other terms that
remained unchanged. While Penney correctly points that “parties may always
modify a written contract previously entered into,” see Consol. Tile & Slate
Co. v. Fox, 189 A.2d 228, 230 (Pa. 1963), it does not cite, and we have not
discovered, authority addressing to what extent modifications of a lease may
____________________________________________
9 The trial court also cited McIntyre Square Assocs. v. Evans, 827 A.2d 446(Pa. Super. 2003) (McIntyre Square), summarizing only that in that
decision, this Court held “a lease term extension created a material risk which
could not be imputed [to] a non-signatory third-party regardless of waiver
[sic].” Trial Ct. Op. at 12. Owner explains McIntyre Square addressed a
surety agreement, and contends it is applicable to this matter because “[t]he
guarantees extended by [Owner] to Penney in the Owner Agreement were
akin to that of a surety.” Owner’s Brief at 21.
We disagree with this comparison. The McIntyre Square Court
explained a surety agreement is an agreement to be liable for the debt of
another, where “the creditor may look to the surety for immediate payment
upon [a] default, without first attempting to collect the debt from the
debtor[.]” McIntyre Square, 827 A.2d at 451 n.7. Owner’s obligations
under the Owner Agreement and, potentially, Penney’s sublease, had nothing
to do with assuming Penney’s debts. Instead, Owner and Penney would have
an entirely different relationship — that of landlord and tenant. Accordingly,
McIntyre Square is not relevant to this appeal.
- 16 -
J-A25034-22
be made before the new instrument is no longer in the nature of an
“extension,” but rather a new instrument that replaces the former.
Nevertheless, we find no error in the trial court’s reasoning. Again,
Penney does not dispute that the 2003 Penney Sublease altered material
terms, including the base length of the lease, the number of optional
extensions, the timing and terms of renewal, and the method for calculating
rent. See Trial Ct. Op. at 11. We emphasize these terms vastly differ from
the nature of the extensions set forth in the 1966 Penney Sublease. Under
that agreement, Penney would simply extend all of the very same terms for
an additional period of time. The 2003 Penney Sublease did not similarly
provide the parties would continue to observe the same terms; indeed, the
length of the base term was extended. Accordingly, we agree with the trial
court that the 2003 Penney Sublease was not an “extension” as contemplated
in Paragraph 4(a) of the Owner Agreement. On this basis, we agree with the
court the Owner Agreement no longer binds Owner to assume Crown’s
responsibilities under the 1966 Penney Sublease and to recognize Penney’s
sublease rights.
VII. Penney’s Remaining Claims
We may quickly dispose of Penney’s remaining arguments, which are as
follows. First, the trial court erred in stating the Owner Agreement
incorporated the 1966 Penney Lease, and accordingly relying on a paragraph,
on Page 18(a) of the 1966 Penney Lease. Penney’s Brief at 48-49. We note
- 17 -
J-A25034-22
the trial court reasoned that the language of this paragraph — which “limit[ed]
the Owner Agreement’s guarantee to ‘optional extensions thereto” —
supported its finding that “any extension thereof” means only the extensions
set forth in the 1966 Penney Sublease. Trial Ct. Op. at 7. On appeal, Penney
denies the Owner Agreement “incorporated” the 1966 Penney Subease, and
thus the trial court erred in considering any language it. Penney’s Brief at 49.
In its final issue, Penney avers the trial court erred in determining that
even if the Owner Agreement applied to extensions made outside the 1966
Penney Sublease, only the 1966 lease terms would apply (and not any 2003
sublease terms). Penney’s Brief at 69-71. In support, Penney reiterates
Owner consented to and approved of the 1966 Penney Sublease, which in turn
permitted Penney and Crown to amend the lease without notice to or consent
from Owner. Reading these provisions together, Penney concludes, contrary
to the trial court’s determination, that Owner is bound by the 2003 sublease
terms.
In light of our above disposition — that Owner is not bound to honor or
recognize Penney’s rights under the 1966 Penney Sublease — we conclude
Penney’s remaining arguments are moot. Accordingly, no relief is due.
VIII. Conclusion
In sum, we do not disturb the trial court’s conclusions that: (1) there
presently exists no contractual relationship between Penney and Owner; and
- 18 -
J-A25034-22
thus (2) Penney is a tenant at will. We affirm the order disposing of the
parties’ cross-declaratory actions.
Order affirmed.
Judge Nichols joins this Memorandum.
Judge Kunselman files a Dissenting Memorandum.
Judgment Entered.
Joseph D. Seletyn, Esq.
Prothonotary
Date: 6/23/2023
- 19 -