Commercial Realty Grp. v. Market Square Plaza ( 2021 )

J-A16037-21
NON-PRECEDENTIAL DECISION - SEE SUPERIOR COURT I.O.P. 65.37
COMMERCIAL REALTY GROUP, INC. : IN THE SUPERIOR COURT OF
: PENNSYLVANIA
Appellant :
:
:
v. :
:
:
MARKET SQUARE PLAZA : No. 1233 MDA 2020
ASSOCIATES, LP F/K/A SAGE :
MARKET SQUARE PLAZA, LP; FB :
HARRISBURG GENERAL, INC.; :
MARKET SQUARE PLAZA, LLC :
Appeal from the Judgment Entered December 22, 2020
In the Court of Common Pleas of Dauphin County Civil Division at No(s):
2015-CV-3731-CV
BEFORE: KUNSELMAN, J., McCAFFERY, J., and STEVENS, P.J.E.*
MEMORANDUM BY STEVENS, P.J.E.: FILED: AUGUST 23, 2021
Appellant, Commercial Realty Group, Inc., appeals from the Judgment
entered following a non-jury trial in the Court of Common Pleas of Dauphin
County on December 22, 2020, after the trial court’s denial of Appellant’s Post-
Trial Motion.1 Following a careful review, we affirm.
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* Former Justice specially assigned to the Superior Court.
1 In their briefs, the parties purport to appeal from the May 29, 2020, Order
denying Appellant’s Post-Trial Motion, and the trial court indicates the appeal
is from that Order in its Pa.R.A.P. 1925(a) Opinion. However, the appeal
properly lies from the judgment entered following disposition of the post-trial
motion. See Mackall v. Fleegle, 801 A.2d 577, 580 (Pa. Super. 2002)
(appeal does not properly lie from order denying post-trial motions, but rather
upon judgment entered following disposition of post-trial motions). The
(Footnote Continued Next Page)
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In its Opinion filed pursuant to Pa.R.A.P. 1925(a), the trial court
thoroughly and accurately detailed the relevant facts and procedural history
herein as follows:
Factual Background
[Appellant] initiated this action by writ of summons in May
2015 and later filed a Complaint asserting it was entitled to a
commission/commissions related to its brokering the rental of
office space in Market Square Plaza, a commercial property at 17
North Second Street in Harrisburg Pa. (the Property). [Appellant]
is a real estate brokerage firm that leases and sells commercial
and industrial properties, investments and businesses. The record
developed in this case to date, including the record submitted to
the [c]ourt in consideration of [collective Appellees’ Market Square
Plaza Associates, LP, f/k/a Sage/MSPA Market Square Plaza, LP;
FB Harrisburg General, Inc.; Market Square Plaza, LLC] summary
judgment motion as well as testimony and evidence supplied at a
later hearing, is as follows:
Lease Negotiations
The Property was initially owned by Defendant Market
Square Plaza, LLC (Market Square Plaza) and later by Defendant
Sage/MSPA Market Square Plaza, LP, now known as Market
Square Plaza Associates, LP (Sage/MSPA). Defendant FB
Harrisburg General, Inc. (FB Harrisburg) is the current general
partner of Sage/MSPA.
Market Square Plaza, a single-purpose limited liability
company, purchased the Property in February 2003. It consists of
approximately 90 condominium units. The original members of
Market Square Plaza were Anthony Pascotti (president), Thomas
Flynn, Richard Reynolds and Richard Friedman. Pascotti was a co-
managing principal in the development of the Property.
In 2004, the Pennsylvania Department of Banking was
seeking commercial office space for its Harrisburg headquarters
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caption correctly indicates the appeal is from the judgment entered on
December 22, 2020; therefore, this Court does not need to amend it.
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and put out bid specifications (specs) through the Pennsylvania
Department of General Services (DGS). Pascotti learned of its
need for space in 2004 while having dinner with Fred Clark and
the Secretary of the Department of Banking. Clark was a
consultant for Market Square Plaza hired to assist it in securing a
lease from the Commonwealth. Clark began working directly with
the Secretary of Banking, his designees and with the Governor's
Office to promote and secure space for the Department of
Banking. Clark never worked with, nor was he aware of,
[Appellant] or its agents Thomas Mallios and Bogumila “Bo”
Mangam. At all relevant times, both Mallios and Mangam were
licensed by the Pennsylvania Real Estate Commission and Mallios
managed [Appellant]. Market Square Plaza’s Pascotti also did not
work with [Appellant], Mangam or Mallios during his attempts to
secure the Department of Banking as a tenant for Market Square
Plaza.
Cheryl Dondero, the project manager for the Department of
Banking in charge of finding it office space, indicated that she did
not pursue space at Market Square Plaza but rather it “came to
[her] as an option” based upon a relationship between Market
Square Plaza owners and the Secretary of Banking. Dondero did
not recall working with Plaintiff or its agents Mallios or Mangam
during the time period when she was looking for office space,
while she was acting as liaison during lease negotiations or later
during the Leasing Board's review of the proposed Lease. She
testified that the spec sheet seeking space for the Department of
Banking was created after Market Square Plaza had been brought
to her “as an option” and that the spec sheet mirrored the space
allocation plan that Dondero created for the Department of
Banking. Furthermore, it was her belief that Market Square Plaza
was the only building that would have fit the requirements set
forth in the spec sheet as the Department of Banking “already
knew the desired outcome.”
At some point in 2004 while the Property was still under
construction, the Flynn Group sent out a flier seeking brokers to
find tenants. Pascotti and Flynn were the contacts listed on the
flier. Bo Mangam responded on [Appellant’s] behalf and attempted
to obtain an agreement to broker office space in the Property.
As part of the process of leasing space to the Department of
Banking, Mangam submitted three proposals on DGS forms. A first
Proposal to Lease Space was submitted by Mangam on November
29, 2004, on behalf of Market Square Plaza for the lease of the
Property. That Proposal was signed by Tom Flynn, as president of
Market Square Plaza, on behalf of “Proposer.” The second Proposal
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to Lease Space was submitted by Mangam on December 14, 2004,
on behalf of Market Square Plaza and again signed by Flynn on
behalf of “Proposer.” The final Proposal to Lease Space was
submitted by Mangam on April 8, 2005, on behalf of Market
Square Plaza, LLC. This Proposal was signed by Pascotti on behalf
of “Proposer.” Pascotti testified that he provided the information
used to complete the final Proposal. This Proposal was submitted
and included the initial term of the lease, two renewal term
options and change in price per square foot that had not been in
any prior version. Mangam was listed on all Proposals as the
contact person for response from the Department of Banking.
[Appellant] also asserted that its agent Mangam worked with
Market Square Plaza’s Flynn and Pascotti to review and complete
the proposals and worked with DGS in negotiating the Lease. None
of the Proposals to Lease Space provided for the payment of a
commission to [Appellant].
While Mangam allegedly made some efforts in seeking to
secure the Department of Banking as a tenant, as reflected in
some of the documentary evidence, the precise nature of her
efforts is unclear since she was not offered as a witness at the
hearing. As such, this [c]ourt later found, following the hearing on
the unjust enrichment claims, that it was Clark’s efforts, coupled
with Pascotti, that secured the Lease with the Commonwealth of
Pennsylvania. Pascotti later communicated directly with the
Department of Banking for the purpose of negotiating the Lease
eventually executed on June 23, 2005 (discussed below).
Commission Agreement and Lease
On November 18, 2004, [Appellant] entered into a
“Commission Agreement – Lease” (Commission Agreement) with
“Tom Flynn / Phoenix Development Company,” and not with
Market Square Plaza, the owner/lessor of the property.
[Appellant] had drafted the Commission Agreement and it was
signed by Mangam on [Appellant’s] behalf. The Commission
Agreement states that it “shall be binding on the undersigned
Owners ... and assigns.”
Flynn/Phoenix Development Company were incorrectly
identified in the Commission Agreement as the lessor of the
Property and Flynn signed it on behalf of “Tom Flynn/Phoenix
Development Co.” listing himself as vice president. At the time,
Phoenix Development Company’s president was Donald Race, Jr.
and its treasurer was John J. Ashdale; Flynn was not listed as an
officer of Phoenix Development Company. Market Square Plaza’s
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president Pascotti was not aware of the execution of this
Commission Agreement until after it had been entered.
An addendum, titled “Addendum No. I” (inexplicably dated
before the Commission Agreement), was attached to the
Commission Agreement and noted that the Commission
Agreement had been entered between [Appellant] and “Phoenix
Development Group, Inc.” (and not Phoenix Development
Company) “and/or assigns.” The Addendum was also signed by
Flynn. Phoenix Development Group is a different entity than
Phoenix Development Company. At the time, Flynn was the
president of Phoenix Development Group, which, as noted, was
not a named party to the Commission Agreement. Neither Phoenix
Development Company, Phoenix Development Group nor Flynn
ever owned the Property, which as noted, was owned by Market
Square Plaza. Flynn, then a co-managing partner of Market
Square Plaza, did not sign the Commission Agreement on Market
Square Plaza’s behalf but rather in his capacity as vice president
of the erroneously listed Phoenix Development Company.
Under the Commission Agreement terms, [Appellant], as
broker, agreed to market the Property to DGS for the Department
of Banking. In return, Flynn/Phoenix Development Company
agreed to pay [Appellant] a 4% commission of the total aggregate
gross rental of the initial lease plus 4% of the annual gross rental
on any options, modifications or any new Lease executed by the
tenant.
A few weeks prior to execution of the Commission
Agreement, on November 1, 2004, Market Square Plaza's Pascotti,
Flynn and Reynolds, signed a Lessor Identity Disclosure form as
co-managing members of Lessor Market Square Plaza. In
addition, on November 4, 2004, Market Square Plaza executed an
“Agency Agreement/Limited Agent Authority” (Agency
Agreement) with Plaintiff CRG and its agent Mangam. As part of
the process of leasing to the Commonwealth, the “Proposed
Lessor” was required to sign this agreement. The Agency
Agreement listed Market Square Plaza as the proposed lessor and
CRG/Mangam as the agent. Pascotti signed the Agency Agreement
for Market Square Plaza. Under its terms, the agent was
responsible for brokering the proposed lease of the Property and
handling all negotiations with DGS/Department of Banking. The
Agency Agreement stated that “agency to be binding during entire
lease term.” The Agency Agreement was a form document
required by DGS for parties entering into government agency
contracts. The Agency Agreement did not provide for the payment
of a commission to [Appellant].
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On June 23, 2005, the Department of Banking and Market
Square Plaza entered into a ten-year Lease Agreement (Lease).
Market Square Plaza’s president, Pascotti, signed the Lease on
behalf of Market Square Plaza. Pascotti negotiated the lease terms
with the Deputy of Banking’s Jim Henning and Dondero. The Lease
provided for the rental of 15,634 square feet on the 11th Floor and
3,494 square feet on the 13th Floor. The Lease provided for two
renewal options, the first from 2015-2020 and the second from
2020-2025. The initial annual rent was $443,769.60. The Lease
was amended September 23, 2005 (First Amendment), modifying
the square footage and the rent due. The terms of the First
Amendment were not negotiated by [Appellant]; Dondero did not
interact with [Appellant’s] agents Mallios or Mangam during the
First Amendment nor during any of the subsequent lease
amendments for which [Appellant] claims a commission
(discussed below).
[Appellant] asserted in its Complaint that after entering the
Commission Agreement with Flynn/Phoenix Development
Company, Phoenix Development Company assigned its rights and
obligations thereunder to Market Square Plaza although it later
admitted it had no such document. [Appellant’s] president Mallios
admitted that he is bound by the Real Estate Licensing and
Registration Act (RELRA)1 and that RELRA requires a written
commission agreement between a real estate professional and the
person from whom a real estate professional is seeking a
commission.
Sale of the Property and Commission Disputes
On November 7, 2005, Market Square Plaza transferred title
of the Property to Sage/MSPA for approximately Thirty Million
Dollars. That same day, Market Square Plaza and Sage/MSPA
executed an Assignment of Rights under a Declaration of
Condominium for Market Square Plaza Condominium. The
Assignment of Rights did not provide for an assignment of the
Commission Agreement that had been entered between
[Appellant] and Tom Flynn / Phoenix Development Company. A
second document, an Assignment Agreement, was also executed
that same day between Market Square Plaza and Sage/MSPA
which assigned, transferred and set over to Sage/MSPA certain
listed items including the Lease between Market Square Plaza and
the Department of Banking. The Assignment Agreement did not
provide for an assignment of the Commission Agreement entered
between [Appellant] and Flynn/Phoenix Development Company.
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Furthermore, none of the leases existing at the time of the Market
Square Plaza - Sage/MSPA sale contained any provisions assigning
any commissions for leases in place.
In the Fall of 2005, [Appellant’s] agent Mallios became
aware of the pending sale and he emailed Market Square Plaza's
Pascotti alerting him of [Appellant’s] continuing claim to
commissions on any renewals under the Lease, as the broker who
procured the Department of Banking as the tenant. Around the
same time, a second broker, Equis Corporation (Equis) also
claimed commissions under the Lease. Mallios informed Pascotti
that [Appellant] intended to seek a lien against the Property sale
if past commissions were not paid. Thereafter, funds were
escrowed by Market Square Plaza to address the commission
claims of [Appellant] and Equis.
All parties – [Appellant], Market Square Plaza, Sage/MSPA
and Equis - began addressing the division of the escrow funds in
December of 2005. There were email communications on
December 15, 2005 between Mallios on behalf of [Appellant],
Pascotti on behalf of Market Square Plaza, an Equis representative
and Gary Brandeis, on behalf of Sage/MSPA. Brandeis was the
single member entity owner of Sage/MSPA's general partner FB
Harrisburg (formerly Market Square, GP, LLC), who represented
Sage/MSPA and negotiated the sale with Market Square Plaza.
Brandeis had not been initially aware of a Commission Agreement
concerning the Property until just before the sale of the Property.
In the December 15, 2005 email chain, Brandeis responded
as follows (Brandeis Emails):
From our perspective, we want to make sure that it is
clear that future commissions related to the tenant is
also divided 65/35 among the brokers [CRG and Equis].
Once we receive the proper documentation, we will
request the release of funds from the escrow agent.
[W]e will need something in the agreement that provides
for the landlord’s maximum exposure for future
commissions. We will not expose ourselves to any future
commissions for this tenant beyond the stated
commission rate even if they have a tenant rep broker.
(emphasis added)
Brandeis admitted that his emails indicated Sage/MSPA
would not expose itself to any future commissions above the 4%
rate stated in the Commission Agreement. His intent, however,
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had been to communicate that Sage/MSPA was not going to
expose itself to commissions it was not obligated to pay.
Ultimately, the parties did not resolve the issue of Sage/MSPA's
exposure for future commissions as requested by Brandeis.
Despite being unable to come to terms about future
commissions, on March 14, 2006, [Appellant], Market Square
Plaza, Sage/MSPA, and Equis, executed a Settlement Release
disbursing the escrowed funds. [Appellant] received a portion of
the unpaid commission due on the initial lease term. The Release
terms reflected that it was limited to past commissions due and
not for any future commissions for future leases or renewals that
might become due under the Commission Agreement. The parties
also agreed that there was no admission of liability by any party.2
Despite threatening to place a lien on Market Square Plaza
and successfully demanding an escrow for commission at closing,
[Appellant] never requested that Sage/MSPA sign a commission
agreement with [Appellant] nor did it attempt to secure a written
assignment of the Commission Agreement with Sage/MSPA.
According to Mallios, he claimed he had been given an oral
representation by Sage/MSPA's Brandeis and Market Square
Plaza’s Pascotti that they would pay him commissions due, and as
such, there was no need for a writing and none was ever
produced. Mallios also relied upon the Brandeis Emails as an
admission by Brandeis/Sage/MSPA that they were obligated to
pay commissions.
In June 2007, Sage/MSPA paid $32,394.87 in commissions
to [Appellant] for the exercise of an option to lease additional
space.3 Despite receiving a payment from Sage/MSPA,
[Appellant] did not secure a written commission agreement with
Sage/MSPA nor obtain an assignment of the Commission
Agreement.
Current Commission Disputes - Third and Fourth
Lease Amendments and Lease Renewal Options
On November 8, 2012 and May 3, 2013, respectively, the
Department of Banking, then known as the Department of
Banking and Securities, amended the Lease terms with
Sage/MSPA and its general partner FB Harrisburg. The Third
Amendment significantly expanded the leased space and
increased rent due by $810,909.02. The Fourth Amendment
involved a small expansion of square footage and increased rent
due by $16,119.13.
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The Third and Fourth Amendments were executed by
Defendant FB Harrisburg as general partner for Sage/MSPA,
through Brandeis. Brandeis asserted that the Amendments were
solely negotiated by himself with no involvement by [Appellant],
including by its agent Mallios. [Appellant] conceded that it did not
have any specific involvement with the Third and Fourth
Amendments but asserted they were made possible because
[Appellant] had put the landlord and tenant together and had put
the initial proposal and Lease together, thus permitting both
expansion of space and extension of duration of the tenancy.
[Appellant] sought 4% commissions on the total increase in
rent under the Third and Fourth Amendments, totaling
$33,081.13, which Sage/MSPA refused to pay, asserting that at
all relevant times, Sage/MSPA was not a party to a written
agreement for commissions nor a written assignment of the initial
Commission Agreement between Plaintiff and Flynn / Phoenix
Development Company. Sage/MSPA also asserted that
[Appellant] was not involved in and did not assist in the
procurement of the Third and Fourth Amendments to the Lease.
After [Appellant] filed the Complaint in this action, the
Lessee Department of Banking exercised both 5-year options
renewing the Lease, for 2015-2020 and 2020-2025, respectively.
These options generated over Eight Million Dollars in total rent
payments. As of the hearing date (January 22, 2020), Plaintiff
asserted total unpaid commissions and interest due of
$402,886.42 it claims arose under the Third and Fourth
Amendments and the two renewal terms.
Procedural Background
In Count I of its Complaint, [Appellant] alleges breach of
contract against Defendant Market Square Plaza for failing to pay
commissions due, pursuant to the Commission Agreement. In
Count II, [Appellant] alternatively asserts a claim that Defendant
Market Square Plaza has been unjustly enriched for retaining in
commissions due [Appellant]. In Count III, [Appellant] alleges
breach of contract against Defendants Sage/MSPA and FB
Harrisburg for failing to pay commissions due under the
Commission Agreement, noting that while Defendants were not
owners of the Property when the Commission Agreement was
entered, they purchased the Property with knowledge that the
Commission Agreement was binding on future owners and assigns
and/or that they ratified their obligation to pay commissions under
the Commission Agreement by later making commission
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payments to [Appellant]. In Count IV, [Appellant] alternatively
asserts a claim that Defendants Sage/MSPA and FB Harrisburg
have been unjustly enriched for retaining commissions due.
Finally, in Count V, [Appellant] seeks relief in the form of a
declaration that the Commission Agreement is jointly binding on
all [Appellees] for payment to [Appellant] on all future commission
including the lease renewals and any other potential extensions,
options or modifications to the Lease.
After preliminary objections were dismissed by the Hon.
Bruce Bratton, Defendants Market Square Plaza and Sage/MSPA
filed a joint answer to the [C]omplaint. Notably, they denied any
obligation under the Commission Agreement, noting that none of
them were ever signatories thereto nor had been assigned any
obligations under the Commission Agreement. Instead, they
agreed that the Commission Agreement had been entered
between non-party Tom Flynn and Phoenix Development
Company.
After a period of inactivity, [Appellant] sought a status
conference to remove the matter from the purge list and deadlines
for dispositive motions were set by the Hon. John Cherry. On
March 30, 2018, [Appellees] filed a motion for summary judgment
and the matter was assigned to this [c]ourt.
Following the submission of a response, briefs and oral
argument, this [c]ourt issued an Order December 21, 2018
granting summary judgment in [Appellees’] favor on the breach
of contract claims (Counts I, III). This [c]ourt found that
“[Appellant] does not have a contract with any of the named
[Appellees] and said [Appellees] are not assigns of the entity
which executed the Commission Agreement with [Appellant].”
This [c]ourt denied summary judgment on the unjust enrichment
claims (Counts II, IV) finding that there remained genuine
questions of material fact. Finally, this [c]ourt denied in part and
granted in part the request for declaratory relief consistent with
the [c]ourt's order.
A bench trial limited to unjust enrichment claims was held
before this [c]ourt on January 22 and 23, 2020. Following trial,
the parties submitted proposed Findings of Fact and Conclusions
of Law. On May 29, 2020, following review of the record and the
parties’ filings, this [c]ourt issued its own “Findings of Fact and
Conclusions of Law,” which was in the nature of an opinion and
order, finding in [Appellees’] favor on the unjust enrichment
claims (Counts II, IV) and the request for declaratory judgment
(Count V) grounded upon a theory of unjust enrichment. The order
was later amended June 15, 2020, to correct a minor error.
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On June 25, 2020, [Appellant] filed a timely post trial
motion. After [Appellees] responded, and following oral argument,
this [c]ourt issued an Order on August 28, 2020, denying the Post
Trial Motion. Plaintiff filed a timely appeal from the denial of post-
trial relief, currently pending.[2]
____
1 63 P.S. §§ 455.101-902.
2 The 2006 Settlement Release, as well as a 2007 Settlement
Release, were precluded from admission at the hearing by Court
Order of January 21, 2020, following consideration of [Appellee’s]
motion in limine. During the hearing, however, the 2006
Settlement Release was deemed admissible for limited purposes
as reflected in the narrative related to this footnote. (See N.T.
73)[.]
3 The subject matter of this transaction was addressed in a 2007
Settlement Release, which was precluded from admission by this
Court (see Footnote 2).
Trial Court Memorandum Opinion, filed 12/9/20, at 2-11.
In its brief, Appellant presents the following Statement of Questions
Involved:
1. Whether the [t]rial [c]ourt erred in granting summary judgment
on the breach of contract counts in the complaint where there was
a written Commission Agreement that the parties acted in
accordance with and that such agreement satisfied the
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2Appellant filed a premature notice of appeal on September 22, 2020,
because, as stated in footnote one above, this appeal properly lies from the
Judgment entered in the trial court on December 22, 2020. Notwithstanding,
we will treat the instant appeal as if it were filed after the entry of judgment
on December 22, 2020, which is the appealable order. See McEwing v. Lititz
Mut. Ins. Co., 77 A.3d 639, 645 (Pa.Super. 2013) (citing Pa.R.A.P. 905(a)
(providing that “[a] notice of appeal filed after the announcement of a
determination but before the entry of an appealable order shall be treated as
filed after such entry and on the day thereof”) and Am. & Foreign Ins. Co.
v. Jerry's Sport Ctr., Inc., 948 A.2d 834, 842 (Pa.Super. 2008) (treating
defendant's appeal from the verdict as having been taken from the final
judgment when judgment was entered after the appeal had been filed)).
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requirement of the Real Estate Licensing And Registration Act
(“RELRA”)?
2. Whether the [t]rial [c]ourt erred in finding that Appellant failed
to satisfy its burden of proof with respect to the claims for unjust
enrichment and that it was barred in recovering on those claims
by the Real Estate Licensing and Registration Act (“RELRA”)
despite the fact that RELRA is silent as to its application to actions
in quasi-contract?
Brief for Appellant at 6.
Generally,
[o]ur appellate role in cases arising from non-jury trial verdicts is
to determine whether the findings of the trial court are supported
by competent evidence and whether the trial court committed
error in any application of the law. The findings of fact of the trial
judge must be given the same weight and effect on appeal as the
verdict of a jury. We consider the evidence in a light most
favorable to the verdict winner. We will reverse the trial court only
if its findings of fact are not supported by competent evidence in
the record or if its findings are premised on an error of law.
Amerikohl Mining Co. v. Peoples Nat. Gas Co., 860 A.2d 547, 549-50
(Pa.Super. 2004) (citations omitted).
Our standard of review of the trial court's grant of summary judgment
is de novo and the scope of review is plenary. American Southern
Insurance Co. v. Halbert, 203 A.3d 223, 226 (Pa.Super. 2019). Summary
judgment may be granted only where there is no genuine issue of any material
fact pertaining to a necessary element of the cause of action or defense or
where, after the completion of relevant discovery, the party who will bear the
burden of proof at trial has failed to produce evidence of facts sufficient to
prove all elements of the cause of action or defense. Pa.R.C.P. 1035.2; US
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Coal Corp. v. Dinning, 222 A.3d 431, 437-38 (Pa.Super. 2019); Renna v.
PPL Electric Utilities, Inc., 207 A.3d 355, 367-68 (Pa.Super. 2019).
In considering whether there is a genuine issue of material fact or
sufficient evidence of the elements of a cause of action or defense, this Court
must view the record in the light most favorable to the non-moving party and
resolve all doubts against the moving party. US Coal Corp., 222 A.3d at 437;
Renna, 207 A.3d at 367; Shiner v. Ralston, 64 A.3d 1, 4 (Pa.Super. 2013).
Appellant first asserts the trial court erred in granting summary
judgment upon finding the Commission Agreement entered into in this case
was not a viable contract agreement that meets the requirements of the
RELRA, 63 P.S. §§ 455.101–455.902. Brief for Appellant at 19, 23. Appellant
reasons that:
The Commission Agreement clearly satisfies the requirements of
RELRA in that it is a written agreement that states the nature of
the service and the fee to be charged. The Commission
Agreement was signed by the agent. It was signed by Mr. Flynn
on behalf of the Lessor and while it did not specifically identify the
entity, Market Street Plaza, the parties acted as if it did.
Regardless of the confusion of Flynn, the Commission Agreement
caused [Appellant] to act for the benefit of Market Street Plaza in
the leasing of office space to the Commonwealth. Flynn and
Pascotti proceeded to execute all of the documents required by
the Department of General Services regarding the leasing of space
to the Commonwealth of Pennsylvania that indicated Market
Street Plaza was the Lessor and that [Appellant] was its
broker/agent.
Id. at 21.
“To successfully maintain a cause of action for breach of contract the
plaintiff must establish: (1) the existence of a contract, including its essential
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terms, (2) a breach of a duty imposed by the contract, and (3) resultant
damages.” Albert v. Erie Ins. Exch., 65 A.3d 923, 928 (Pa.Super. 2013)
(citation omitted). Our Court previously has determined:
Generally[, a]n agreement is an enforceable contract wherein the
parties intended to conclude a binding agreement and the
essential terms of that agreement are certain enough to provide
the basis for providing an appropriate remedy. If the essential
terms of the agreement are so uncertain that there is no basis for
determining whether the agreement has been kept or broken,
there is not an enforceable contract.
***
[T]he question of whether an undisputed set of facts establishes
a contract is a matter of law. It is also well settled that in order
for an enforceable agreement to exist, there must be a “meeting
of the minds,” whereby both parties mutually assent to the same
thing, as evidenced by an offer and its acceptance. It is equally
well established that an offer may be accepted by conduct and
what the parties do pursuant to the offer is germane to show
whether the offer is accepted. In cases involving contracts wholly
or partially composed of oral communications, the precise content
of which are not of record, courts must look to the surrounding
circumstances and course of dealing between the parties in order
to ascertain their intent. We must, therefore, look to the parties’
course of conduct to ascertain the presence of a contract.
United Environmental Group, Inc. v. GKK McKnight, LP, 176 A.3d 946,
963 (Pa.Super. 2017) (citations omitted) (brackets in original).
The RELRA establishes specific standards of conduct and licensing which
pertain to all persons engaged in the sale or transfer of real property within
this Commonwealth. See, e.g., 63 P.S. § 455.301. “A principal purpose of the
Act is to protect buyers and sellers of real estate, the most expensive item
many persons ever buy or sell, from abuse by persons engaged in the
business.” Meyer v. Gwynedd Dev. Grp., Inc., 756 A.2d 67, 69 (Pa.Super.
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2000) (citation omitted). For this reason, an oral modification of a term of
such an agreement, which is required under the RELRA to be in writing, cannot
support a claim for commissions or fees brought pursuant to the Act. Michael
Salove Co. v. Enrico Partners, L.P., 23 A.3d 1066, 1071 (Pa.Super. 2011).
The trial court herein found Appellant had not established that it and
Appellees were bound by a valid commission agreement and in doing so
reasoned as follows:
In its statement of errors raised on appeal, [Appellant]
argues the grant of summary judgment was error because there
was in fact a written agreement, the Commission Agreement, with
which the parties acted in accordance. [Appellant] alternatively
argues the summary judgment grant was issued in error where
the execution of the Commission Agreement by Tom Flynn for
Phoenix Development Company and/or Phoenix Development
Group was either a mutual mistake or a ruse perpetrated by
Defendant Market Square Plaza by Flynn for the benefit of
Defendant Market Square Plaza.
This [c]ourt rejected [Appellant’s] first argument, that there
existed a valid Commission Agreement binding [Appellant] and
either or both [Appellees]. RELRA establishes specific standards
of conduct which pertain to all persons engaged in the sale or
transfer of real property within the Commonwealth. Meyer v
Gwynedd Dev. Group, 756 A. 2d 67 (Pa.Super. 2000). [Appellant]
is a “licensee” and [Appellees] are “consumers” as defined in
RELRA. 63 P.S. § 455.201. Section 455.606a(b)(1) provides:
(b)(1) A licensee may not perform a service for a
consumer of real estate services for a fee,
commission or other valuable consideration paid
by or on behalf of the consumer unless the nature
of the service and the fee to be charged are set
forth in a written agreement between the broker
and the consumer that is signed by the consumer.
This paragraph shall not prohibit a licensee from
performing services before such an agreement is signed,
but the licensee is not entitled to recover a fee,
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commission or other valuable consideration in the
absence of such a signed agreement.
63 P.S. §455.606a(b)(l) (emphasis added). Thus, in order to
receive payment for any commissions, this Section requires an
express contract signed by the parties. The failure to abide by
RELRA results in the inability to collect a commission. Michael
Salove Co. v. Enrico Partners, L.P., 23 A.3d 1066. 1071 (Pa.
Super. 2011); see also, Schutter v. Herskowitz, No. CIVA 07-
3823, 2008 WL 2673375, at *3-4 (E.D. Pa. June 30, 2008).
(“[RELRA] provisions, taken as a whole, make it unmistakably
clear that a real estate broker licensed in Pennsylvania is required
to obtain a written agreement, signed by the consumer and
specifying the services to be performed along with an assurance
that the agreement as to the fees and services was “the result of
negotiations” between the broker and the customer. Accordingly,
where there is no such signed written agreement, a broker may
not recoup any “fee, commission or other valuable consideration.”
(citing See 63 P.S. §§ 455.606a, 455.608a; 49 Pa. Code §§
35.281, 35.331)).
[Appellant] has admitted that there was no written contract
with any of the named [Appellees] nor was there a written
assignment to either [Appellee]. The only possible party that could
have been responsible to pay [Appellant] a commission, based
upon the four corners of the Commission Agreement, was Phoenix
Development Company, which was not a named party in this
action. [Appellant’s] agent Mallios admitted that he is bound by
RELRA, inasmuch as it requires a written commission agreement
between a real estate professional and the person from whom a
real estate professional is seeking commission. As a result, there
cannot be a breach of a non-existent agreement between
[Appellant] and either named [Appellee]. Because there is no
written agreement between [Appellant] and any [Appellees] from
whom [Appellant] seeks a commission which meets RELRA
requirements, paying any commission upon such would violate
RELRA.
[Appellant] suggested that other documents in the record
supported its claim for commissions, which this [c]ourt rejected.
The Agency Agreement does not provide for the payment of a
commission to [Appellant]; nor do any of the Proposals to Lease
Space provide for payment of a commission to [Appellant]. Mallios
admitted that he had not negotiated the right of the
Commonwealth to expand the square footage of their leasehold
interest. As such, [Appellant] is not entitled to commissions on
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expansions or renewals as paying such commissions would be
violative of even the scope of Mallios’/[Appellant’s] equitable
claim, if any.
[Appellant’s] failure to secure a written assignment or post-
Lease written commission agreement with Market Square Plaza or
Sage/MSPA makes recovery impermissible under Section
455.606a(b)(l) of RELRA, because there is no binding contract.
Furthermore, all writings between [Appellant] and either named
[Appellee] lacked the required elements to comply with RELRA.
Trial Court Opinion, filed 12/9/20, at 13-15 (emphasis in original).
Upon review of the certified record and viewing the evidence in the light
most favorable to Appellant, as our standard of review requires, we discern
no error by the trial court in granting summary judgment on Appellant's
breach of contract claims. The trial court made a legal determination that the
written Commission Agreement upon which Appellant relies was not entered
into by any of the named Appellees in the instant cause of action, and there
was no assignment thereof to any of the named Appellees. See N.T. Non-Jury
Trial, at 90; the record supports this finding.
In fact, it is undisputed that Appellees did not sign the Commission
Agreement or Addendum No. 1., and Mr. Mallios acknowledged at trial that
such action was required in order for Appellant to seek a commission pursuant
to the RELRA. Id. at 86-87; see also Trial Court findings of Fact and
Conclusions of Law, filed 5/29/20, at ¶ 16.
Moreover, Mr. Flynn had no recollection of ever being presented with a
proposal by Ms. Mangam to lease space, and he did not sign the Proposal to
Lease Space. N.T. Non-Jury Trial 1/23/2020, at 194. Importantly, Appellant
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admits “the confusion of Flynn” regarding the Commission Agreement in the
portion of its brief quoted above. See Brief for Appellant at 21. This admitted
confusion thwarts Appellant’s attempt to show the Commission Agreement
was binding upon Appellees, for there could not have been a “meeting of the
minds” with regard to the terms thereunder where one of the necessary
signatories denies his signature appears on the document and testifies he has
no knowledge of the terms contained within it. See United Environmental
Group. In., supra.
Also, the email chain Appellant references commenced after the
property had been sold to Sage/MSPA on November 9, 2005, and at that time
both Appellant and Equis Corp. claimed they were owed a commission. N.T.
Non-Jury Trial, 1/22/20, at 107-110. Despite the fact that emails continued
for several months, a written commission agreement providing for
Sage/MSPA’s exposure for future commissions never was created. Id. at 72,
106-109. Appellant did not request that Sage/MSPA, through Mr. Brandeis
or Mr. Pascotti, sign a commission agreement.
To the contrary, Mr. Mallios testified he relied on an oral representation
during a telephone conversation with Mr. Bandeis regarding the payment of a
commission. Id. at 97-98. However, this alleged oral representation clearly
does not satisfy the writing requirements of the RELRA. See Moyer, supra.
Mr. Mallios possessed nothing in writing other than the Commission
Agreement on which to base Appellant’s claim to commissions. N.T. Non-Jury
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Trial, 1/22/20 at 106, 109-10. Yet, he admitted he is bound by RELRA and its
terms, understood that RELA requires the existence of a written commission
agreement between Appellant and the person or entity from whom a
commission is sought, and knew that both parties must agree to the terms of
such commission agreement. Id. at 86-87. Simply put, Appellant did not
comply with RELRA to secure a written commission agreement with any of
Appellees despite Mr. Mallios’ knowledge that a specific writing was required
under RELRA and his having numerous opportunities to obtain one. Id. at 97-
98.
Appellant alternatively posits the trial court erred in failing to award it
commissions upon a theory of unjust enrichment. In doing so, Appellant
reasons:
[t]here is no doubt that Market Square Plaza and
Sage/MSPA have been unjustly enriched where benefits (the rent
paid by the Commonwealth) were conferred on them by
[Appellant’s] services; where they have appreciated the payment
of the rent; and where they accepted and retained the benefits
under circumstances that are inequitable for them to do so without
payment of value on the commissions due on the lease renewals
and the expansions of space (both provided for in the Lease).
Brief for Appellant at 27.
When considering this issue, we are mindful of the following:
Unjust enrichment is an equitable doctrine, whose elements we
have described as [(1)] benefits conferred on defendant by
plaintiff, [(2)] appreciation of such benefits by defendant, and
[(3)] acceptance and retention of such benefits under such
circumstances that it would be inequitable for defendant to retain
the benefit without payment of value. .... The critical inquiry in
the application of this doctrine is whether a defendant has been
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unjustly enriched. Where unjust enrichment is found, the law
implies a contract, referred to as either a quasi contract or a
contract implied in law, which requires that the defendant pay to
plaintiff the value of the benefit conferred.
Karden Constr. Servs., Inc. v. D'Amico, 219 A.3d 619, 628 (Pa.Super.
2019), appeal denied, 229 A.3d 234 (Pa. 2020) (citation and quotation marks
omitted). In addition,
[t]he most significant element of the doctrine is whether the
enrichment of the defendant is unjust; the doctrine does not apply
simply because the defendant may have benefited as a result of
the actions of the plaintiff. Where unjust enrichment is found, the
law implies a quasi-contract which requires the defendant to pay
to plaintiff the value of the benefit conferred. In other words, the
defendant makes restitution to the plaintiff in quantum meruit. By
its nature, the doctrine of quasi-contract, or unjust enrichment, is
inapplicable where a written or express contract exists.
Lackner v. Glosser, 892 A.2d 21, 34 (Pa.Super 2006)(citations omitted).
To resolve this claim, we must consider whether under the facts
presented herein an award of unjust enrichment is recoverable under RELRA.
In Phelps v. Caperoon, 190 A.3d 1230 (Pa.Super. 2018), this Court
summarized the well-settled rules of statutory construction:
The Statutory Construction Act, 1 Pa.C.S. §§ 1901-1991,
sets forth principles of statutory construction to guide a court's
efforts with respect to statutory interpretation. In so doing,
however, the Act expressly limits the use of its construction
principles.
The purpose of statutory interpretation is to ascertain the
General Assembly's intent and to give it effect. In discerning that
intent, courts first look to the language of the statute itself. If the
language of the statute clearly and unambiguously sets forth the
legislative intent, it is the duty of the court to apply that intent
and not look beyond the statutory language to ascertain its
meaning. Courts may apply the rules of statutory construction
only when the statutory language is not explicit or is ambiguous.
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We must read all sections of a statute together and in
conjunction with each other, construing them with reference to
the entire statute. When construing one section of a statute,
courts must read that section not by itself, but with reference to,
and in light of, the other sections. Statutory language must be
read in context, together and in conjunction with the remaining
statutory language.
Every statute shall be construed, if possible, to give effect
to all its provisions. We presume the legislature did not intend a
result that is absurd, impossible, or unreasonable, and that it
intends the entire statute to be effective and certain. When
evaluating the interplay of several statutory provisions, we
recognize that statutes that relate to the same class of persons
are in pari materia and should be construed together, if possible,
as one statute.
Also, when interpreting a statute we must listen attentively
to what the statute says, but also to what it does not say.
Phelps, 190 A.3d at 1236 (quoting Retina Assocs. of Greater Phila., Ltd.
v. Retinovitreous Assocs., Ltd., 176 A.3d 263, 270 (Pa. Super. 2017)
(alteration omitted)).
The Legislature specifically drafted RELRA to require licensees and
consumers to establish a direct relationship and memorialize the same in a
clearly written and properly executed agreement. As Appellees stress,
“[n]othing in RELRA transforms the Ancillary Documents or the email chain
into a written and signed commission agreement. . . . The relationship
between Appellant and Appellees is, pursuant to statute, founded upon a
contract, but that contract does not exist.” Brief for Appellees at 18-19
(footnotes omitted).
Thus, had the trial court allowed Appellant’s unjust enrichment claim to
go forward, it would have acted contrary to the plain language of Subsection
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455.606a(b)(1) of RELRA which precludes a recovery of a fee, commission, or
other consideration for brokerage services absent an express contract signed
by the licensee and the party from whom the licensee seeks the commission.
Moreover, in light of the fact that Appellant did not secure the original
Lease with the Commonwealth, the trial court did not err in determining
Appellant was not entitled to equitable relief on this basis. Mr. Clark testified
that it was he and Mr. Pascotti who advanced Market Square Plaza as a
property to be identified for banking, and no one associated with Appellant or
Mr. Mallios had ever been involved in those discussions. N.T. Non-Jury Trial,
1/22/20, at 139-40. Mr. Pascotti testified he never interacted with Mr. Mallios
in securing the Lease, and he did not recall Ms. Mangam being involved in
identifying Market Square Plaza as a potential place for Banking. N.T. Non-
Jury Trial, 1/23/20, at 264-65.
Ms. Dondero also testified she was unaware of Appellant and did not
recall working either with Mr. Mallios or Ms. Mangam when Market Street Plaza
was brought to her attention in her position by the Department of Banking as
the Director of Administrative Services. N.T. Non-Jury Trial, 1/23/20, at 157,
165-66, 169.
As the trial court found, although Ms. Mangam may have put forth effort
to secure the Commonwealth as a tenant of the Property, because she did not
testify at trial, “it is unclear what, if anything, she had done or accomplished.”
. . . “It was Clark’s efforts, coupled with Pascotti, that secured the lease with
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the Commonwealth of Pennsylvania. Pascotti spoke directly with the
Department of Banking for Purposes of negotiating the lease.” Findings of
Fact and Conclusions of Law, filed 5/29/20, at ¶¶ 24, 39.
Also, the trial court, within its purview as factfinder, found Appellant’s
actions did not confer a benefit upon Appellees, because Appellant did not
negotiate the Lease with Appellees, and the Third and Fourth Amendments
thereto, for which Appellant made the claims of unjust enrichment and
pertained to expansions to the Commonwealth’s square footage, were
procured by Mr. Brandeis. In fact, Mr. Mallios admitted that he did not
negotiate the Third and Fourth Amendments to the Lease. N.T. Non-Jury Trial,
100-104.
In light of all of the foregoing, we find no trial court error and affirm the
Judgment entered on December 22, 2020.
Judgment affirmed.
Judgment Entered.
Joseph D. Seletyn, Esq.
Prothonotary
Date: 08/23/2021
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