Tsung Tsin Associates v. Leun Fong Produce

J-A25041-18
NON-PRECEDENTIAL DECISION – SEE SUPERIOR COURT I.O.P. 65.37
TSUNG TSIN ASSOCIATION : IN THE SUPERIOR COURT OF
: PENNSYLVANIA
:
v. :
:
:
LUEN FONG PRODUCE, INC., :
:
Appellant. : No. 3724 EDA 2016
Appeal from the Judgment Entered, November 29, 2016,
in the Court of Common Pleas of Philadelphia County,
Civil Division at No(s): No. 01813 October Term, 2015.
BEFORE: PANELLA, J., DUBOW, J., and KUNSELMAN, J.
MEMORANDUM BY KUNSELMAN, J.: FILED APRIL 09, 2019
This landlord/tenant dispute arises out of a long-term, commercial lease
for a grocery store in Philadelphia’s Chinatown. To resolve it, we must decide
how the statute of limitations impacts a multi-year rental, when the landlord
waits until the lease is almost expired to sue for all unpaid, additional rent,
going back nearly a decade. The trial court allowed the landlord, Tsung Tsin
Association to recover four years of damages. The jury found that the tenant,
Luen Fong Produce, Inc., breached the lease by not paying various forms of
additional rent and awarded $38,558.00 to the landlord. The tenant appeals
from that judgment.1
____________________________________________
1 The tenant initially tried appealing “from the May 19, 2016 Jury Verdict, and
related Trial Court Findings . . . .” Notice of Appeal, 6/17/16, at 1. We
J-A25041-18
We hold that, as a matter of law, the 2003 lease supplanted the parties’
original 1995 lease, and under the 2003 lease and the facts of record, the
tenant owed additional rent only for excess real estate taxes from June 2011
to the date of trial. That amount was $19,523.90. Thus, we shall affirm the
judgment in favor of the landlord, but modify the amount to $19,523.90.
I. FACTUAL BACKGROUND
The facts and procedural history of this case are fairly straightforward.
In 1995, the landlord leased the first floor of its building to the tenant, a
wholesaler of produce. See P-2 at 1. The parties executed a form lease and
an addendum that altered many of the lease terms. See P-3 at 9-10.
Then, in 2003, the parties entered into a new lease, using the same
form as the one they used in 1995, but without the typed alterations. See P-
____________________________________________
quashed that first appeal as premature. See Order of Superior Court,
8/23/2016.
Its second notice of appeal was also, technically speaking, premature.
See Pennsylvania Rule of Appellate Procedure 301. However, under Mancini
v. Morrow, 458 A.2d 580 (Pa. Super. 1983), and Johnston the Florist v.
TEDCO Construction Corp., 567 A.2d 511, 515 (Pa. Super. 1995) (en banc),
we will not quash the tenant’s second appeal, because the landlord caused the
Prothonotary of Philadelphia County to enter final judgment on the docket.
That said, the better practice would have been for the tenant to wait
until the Prothonotary had reduced the denial of post-trial motions to a final
judgment. At that point, the 30-day filing period under Pennsylvania Rule of
Appellate Procedure 903 would have begun to run. During that time, the
tenant should have filed its notice of appeal, appealing from the final
judgment, not from the order denying post-trial motions or the jury’s verdict.
-2-
J-A25041-18
4 at 1; see also N.T., 5/17/16, at 212. The 2003 lease was originally for five
years, with an option for a four-year extension. See P-4 at 1. In 2009, the
parties signed an addendum, extending the 2003 lease for ten years – to June
30, 2019. See P-4, at 1.
There is no dispute that the tenant paid the monthly base rent
throughout the 20 years of the parties’ contractual relationship. The parties
only disagree on whether the tenant should have paid additional rent and, if
so, how much. The landlord claims the tenant owed additional rent in the
form of increases in property taxes, use and occupancy taxes, water, sewage
and gas. The tenant claims that it paid the use and occupancy taxes.
Additionally, the tenant claims the landlord cannot seek damages dating back
twelve years, and disputes other additional rents due.
The landlord sued the tenant in the Philadelphia Municipal Court on June
6, 2015 for nonpayment of additional rent and won. The tenant appealed to
the Court of Common Pleas of Philadelphia County. In its Complaint, the
landlord sought twelve years’ worth of additional rent. In response, the tenant
raised the four-year statute of limitations for contract actions in Pennsylvania.
The case proceeded to a jury trial in May of 2016. The trial court partially
limited the landlord’s claim as a matter of law; applying the statute of
limitations for contract claims, the court limited the landlord’s damages to the
four years preceding the date on which it filed suit. Thus, the landlord could
only seek additional rent from June 6, 2011 forward.
-3-
J-A25041-18
At trial, the landlord presented evidence of the various forms of
additional rent it claimed the tenant owed. It presented evidence of excess
real estate taxes from 2004 to 2011. It presented water bills for the building
from 2007 through 2016. It presented evidence of gas usage from 2011
through 2016. It presented evidence of use and occupancy taxes for 2013,
2014, and 2015. Finally, the landlord presented a claim for accelerated rent
through the end of the contract term.
The jury returned a verdict finding the tenant in breach of contract and
awarded the landlord $38,558.00 in damages.2 Both parties filed post-trial
motions, which the trial court denied. The tenant appealed.
II. ANALYSIS
In its brief, the tenant raises six issues, which we have consolidated to
the following three claims. Essentially, the tenant first claims the statute of
limitations and/or laches bars the landlord’s claims entirely. Second, the
tenant claims the landlord did not establish a prima facie case of breach of
contract. Finally, the tenant claims the trial court should have molded the
verdict consistent with the evidence at trial.
A. The Trial Court Properly Applied the Statute of Limitations and Rejected
the Doctrine of Laches.
____________________________________________
2 The jury also ruled in favor of the landlord on various counterclaims that the
tenant had levied, but the tenant has not appealed that part of the verdict.
-4-
J-A25041-18
First, the tenant claims the landlord filed this lawsuit too late. Thus, it
raises the statute of limitations and/or the doctrine of laches as a defense to
bar all of the landlord’s claims for additional rent.
Initially, the tenant challenges the trial court’s application of the statute
of limitations for contract actions. The trial court applied the statute and
limited the landlord’s claims to four years prior to the date suit was filed: June
6, 2011. The tenant believes the statute of limitations required the landlord
to file suit by June of 2007, four years after the first time the tenant failed to
pay additional rent under the 2003 lease.
The applicability of a statute of limitations to an alleged cause of action
is a question of law; therefore, our scope of review is plenary, and our
standard of review is de novo. Kessock v. Conestoga Title Ins. Co., 194
A.3d 1046, 1056 (Pa. Super. 2018)
Pennsylvania’s Landlord and Tenant Act of 1951 mandates that actions
to collect rent proceed under the common law of contracts. “Any landlord may
recover from a tenant rent in arrears in an action of assumpsit as debts of
similar amount are by law recoverable.” 68 P.S. § 250.301.3
____________________________________________
3We note that while the law of contracts governs unpaid rent, equity governs
whether a landlord can collect interest on the amount of unpaid rent. The law
provides:
In any such action, interest at the legal rate on the amount
of rent due may be allowed if deemed equitable under the
circumstances of the particular case.
-5-
J-A25041-18
Generally, an action for breach of a contract has a four-year statute of
limitations. See 42 Pa.C.S.A. § 5525(a)(8); Packer Soc. Hill Travel
Agency, Inc. v. Presbyterian Univ. of Pennsylvania Med. Ctr., 635 A.2d
649, 652 (Pa. Super. 1993) (holding that the statute of limitations applies to
all actions on contracts not under seal is four years).
”The time within which a matter must be commenced . . . shall be
computed . . . from the time the cause of action accrued.” 42 Pa.C.S.A. §
5502; see also Cucchi v. Rollins Protective Services Co., 546 A.2d 1131,
1144 (Pa. Super. 1988), rev’d on other grounds, 574 A.2d 565 (Pa. 1990). In
general, a contract action accrues at the moment a party breaches. Id.;
Sadtler v. Jackson-Cross Co., 587 A.2d 727, 731 (Pa. Super. 1991).
Here, the landlord filed suit on June 6, 2015 and sought damages for
unpaid rent going back to 2004. The trial court applied Section 5525 to bar
recovery of any damages flowing from alleged breaches prior to June 6, 2011
– i.e., four years before the landlord filed suit. The parties and the common-
pleas judge referred to this as the ”four-year-look-back” period.
We agree with the trial court approach. In its Complaint, the landlord
alleged the tenant breached the 2003 lease (and its 2009 addendum) by not
____________________________________________
68 P.S. § 250.301.
We also note that the trial court properly dismissed the landlord’s claim for
unjust enrichment, because the parties had a written contract.
-6-
J-A25041-18
paying various forms of additional rent. That lease dictated when each form
of additional rent was due.
For example, the tenant agreed to pay the real estate taxes “assessed
or imposed . . . in excess of and over and above those assessed or imposed
at the time of making this lease . . . on or before the first day of July of each
and every year.” P-4 at 1, ¶ 6(b) (emphasis added). Thus, the contract fixed
a certain time for payment of the additional rent until the obligations
terminated at the end of the lease.
The landlord alleged that tenant made none of these payments.
Essentially, the landlord claims that the tenant committed multiple, recurring,
annual breaches. Assuming the tenant owed additional rent, the landlord
claimed each failure to pay constituted a new breach. The tenant’s failure to
pay the 2003-04 real estate tax on July 1, 2004 was one breach of paragraph
6. Failure to pay the 2004-05 real estate tax on July 1, 2005 was another,
and so on each year. Thus, failure to pay the 2010-11 real estate tax on July
1, 2011 was a new breach.
The July 1, 2011 breach gave rise to a new cause of action, which
accrued on July 2, 2011 for Section 5502 purposes. The landlord had four
years under that statute to sue the tenant for the July 2, 2011 breach — i.e.,
until July 2, 2015. The landlord sued on June 6, 2015, about four weeks
before the statute of limitations expired. Thus, the claim for damages arising
from the tenant’s failure to pay the 2010-11 real estate taxes on July 2, 2011
was timely.
-7-
J-A25041-18
The same is true of all the alleged breaches for additional rent which
occurred on or after June 6, 2011 — i.e., four years before the landlord
commenced this action. Where, as here, a tenant has allegedly breached a
series of reoccurring obligations to pay rent over the life of a lease, the statute
of limitations, practically speaking, creates a “four-year-look-back” period. In
short, 42 Pa.C.S.A. § 5525(a)(8) time-barred all causes of action arising prior
to June 6, 2011, while any causes of action, accruing from a breach on or after
that date, remained legally viable.
The tenant’s suggestion, that the statute of limitations bars the landlord
from recovering any rent at all after 2007, would create the absurd and unjust
result that the landlord could never collect any additional rent – past, present,
or future. The tenant’s construction would excuse all subsequent breaches,
based solely on the landlord’s failure to file a lawsuit to collect additional rent
by 2007. We do not think that the Legislature intended for long-term tenants
to occupy premises rent-free, when a landlord waits more than four years into
a decade-long lease to sue. In fact, by applying the ”four-year-look-back” as
the trial court did, this tenant received an unforeseen windfall of occupying
the premise without paying any additional rent from 2003 through 2011. But
this good fortune does not mean that the tenant can escape the obligation to
pay additional rent forever.
We conclude that the trial judge properly applied the statute of
limitations by limiting the time period for which the landlord could seek
-8-
J-A25041-18
damages to four years prior to the date the landlord filed the lawsuit. See 42
Pa.C.S.A. § 5255(a)(8).
The tenant also claims the trial court erred in not applying the doctrine
of laches to bar the landlord’s claims for additional rent. The tenant claims it
suffered prejudice in defending this case, because of the landlord’s inordinate
delay in filing suit.
The trial judge refused to enforce the equitable doctrine of laches
against the landlord’s contract action. As we indicated above, the
Landlord/Tenant Act requires landlords to file an action at law to recover
unpaid rent. See 68 P.S. § 250.301.
We have previously held, “Laches is not a defense in a court of law.”
Leedom v. Spano, 647 A.2d 221, 228 (Pa. Super. 1994). Thus, the trial
judge correctly rejected the tenant’s defense of laches.
Accordingly, the tenant’s first claim warrants no relief.
B. The Landlord Offered Sufficient Proof to Show the Tenant Owed Excess
Real Estate Taxes Only.
Next, we consider the tenant’s claim that it is entitled to judgment
notwithstanding the verdict on the landlord’s breach of contract claims.
When reviewing a trial court’s denial of judgment notwithstanding the
verdict (JNOV), this Court’s standard of review varies based upon what type
of error the appellant has alleged:
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
-9-
J-A25041-18
for the movant. When reviewing a trial court’s denial of a
motion for JNOV, we must 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[, and our
standard is de novo]. 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.
Tong-Summerfrod v. Abington Memorial Hospital, 190 A.3d 631, 640
(Pa. Super. 2018) (quoting V–Tech Services, Inc. v. Street, 72 A.3d 270,
275 (Pa. Super. 2013). Here, the tenant challenges whether the landlord
presented sufficient evidence, as a matter of law, to support its breach of
contract claims; thus, our scope of review is plenary, and our standard of
review is de novo.
“[L]eases are in the nature of contracts and are thus controlled by
principles of contract law.” 2401 Pennsylvania Ave. Corp. v. Federation
of Jewish Agencies of Greater Philadelphia, 466 A.2d 132, 136 (Pa.
Super. 1983), aff'd, 489 A.2d 733 (Pa. 1985); see also Pugh v. Holmes,
405 A.2d 897 (Pa. 1979). To “decide if there was sufficient, competent
evidence to sustain the verdict,” we turn to the law of contracts to establish
what the landlord had to prove for each Count in its Complaint. Tong-
Summerford, supra.
- 10 -
J-A25041-18
This Court has said that the elements for breach of contract are “(1) the
existence of a contract, including its essential terms, (2) a breach of a duty
imposed by the contract, and (3) resultant damages.” CoreStates Bank,
N.A. v. Cutillo, 723 A.2d 1053, 1058 (Pa. Super. 1999).
Here, the landlord’s Complaint alleges the tenant promised to pay
additional rent under the lease and failed to do so. The parties agree that the
2003 lease, as extended in 2009, governs their relationship; they do not
dispute that a contract existed.
As we will discuss, our review of the contract and the evidence of record
indicates that the tenant was obligated to pay excess real estate taxes, and it
failed to do so. Our review also indicates that the remaining claims for
additional rent are meritless. We conclude that the trial court properly denied
the tenant’s request for JNOV on Count II of the Complaint, but erred in
denying JNOV on Counts I, III, IV, V and VI.
In Count II of the Complaint, the landlord seeks damages for a breach
of contract due to the tenant’s failure to pay the excess real estate taxes.4 In
____________________________________________
4 In the Complaint, the landlord never actually alleged this specific duty or
breach on the part of the tenant. Instead, in Count II, the landlord repeated
language from Count I that the tenant “was required to pay for water and
sewer under the 1995 Lease, 2003 Lease, and addendums thereto.”
Complaint at 3 (emphasis added). Even so, in the WHEREFORE clause of
Count II, the landlord correctly demanded judgment “in the amount of
$27,020.83 for real estate taxes . . . .” Id. (emphasis added). Because the
tenant did not preliminarily object to this defect, we will overlook this error.
- 11 -
J-A25041-18
clause (b) of paragraph six in the lease, the tenant agreed to pay these taxes
as additional rent:
(b) [Tenant] further agrees to pay as rent in addition to
the minimum rental herein reserved all taxes assessed or
imposed upon the demised premises and/or the
building of which the demised premises is a part
during the term of this lease, in excess of and over
and above those assessed or imposed at the time of
making this lease. The amount due hereunder on account
of such taxes shall be apportioned for that part of the first
and last calendar years covered by the term hereof. The
same shall be paid by [Tenant] to [Landlord] on or before
the first day of July of each and every year.
P-4 at 1, ¶ 6 (emphasis added).
The landlord submitted a handwritten chart that listed all of the tenant’s
alleged non-payments of excess real estate taxes. The top of the first page
listed the building’s address and then included the following table, which listed
the real estate taxes for the base year, 2003, as $4,969.02, the principle
amount of tax bill for each year thereafter and a calculation of the excess
amount owed by the tenant:
TAX YEAR PRINCIPAL BASE YEAR EXCESS/OVER
PRINCIPAL
2004 6,021.48 4,969.02 1,052.46
2005 6,021.48 4,969.02 1,052.46
2006 6,021.48 4,969.02 1,052.46
2007 6,021.48 4,969.02 1,052.46
2008 6,082.30 4,969.02 1,113.28
2009 6,090.37 4,969.02 1,121.35
2010 6,021.48 4,969.02 1,052.46
2011 6,017.51 4,969.02 1,648.49
2012 6,872.53 4,969.02 1,903.51
2013 7,119.55 4,969.02 2,150.53
2014 11,820.01 4,969.02 6,850.99
- 12 -
J-A25041-18
2015 11,939.40 4,969.02 6,970.38
TOTAL $ 27,020.83
P-7 at 1.
Additionally, Ms. Yeung, the landlord’s public relations director, testified
that the landlord was submitting this chart so it could receive
“reimbursements.” N.T., 5/17/16, at 77. From that testimony, combined with
the chart, the jury could have reasonably concluded that the landlord paid the
full real estate taxes for over a decade. Thus, the trial court properly denied
tenant’s request for JNOV on Count II because the landlord established that
the tenant owed additional rent in the form of increased real estate taxes for
2011 through 2015.
The landlords remaining claims for additional rent fail. First, in Count I,
the landlord claimed additional rent for unpaid water and sewage bills. It
relied on the following language from the 2003 lease:
(d) [Tenant] further agrees to pay as additional rent, if
there is a metered water connection to the said
premises, all charges for water consumed upon demised
premises in excess of the yearly minimum meter charge and
all charges for repairs to the said meter or meters on the
premises, whether such repairs are made necessary by
ordinary wear and tear, freezing, hot water, accident or
other causes, immediately when the same become due.
(e) [Tenant] further agrees to pay as additional rent, if
there is a metered water connection to said premises,
all sewer rental or charges for use of sewers, sewage
system, and sewage treatment works servicing the demised
premises in excess of the yearly minimum of such sewer
charges, immediately when same become due.
P-4 at 1, ¶ 6 (emphasis added).
- 13 -
J-A25041-18
While it appears the tenant agreed to pay for water and sewer changes,
both of those obligations were conditioned upon there being a separate
metered water connection to the premises the tenant was leasing. The
landlord failed to produce evidence of a separate metered connection to the
premises occupied by the tenant. Ms. Yeung, the landlord’s witness, testified
that there was only one water meter for the building. N.T., 5/17/16, at 109.
There is no other evidence of record to prove that there was a metered water
connection for the first floor to meet the condition precedent of clauses (d)
and (e). As a matter of law, the tenant owed the landlord nothing under
clauses (d) and (e) of the 2003 lease for water or sewer. Accordingly, the
tenant was entitled to JNOV on Count I. The trial court erred by not granting
the tenant that judgment, as a matter of law.
Similarly, in Count V of the Complaint, the landlord sought damages
because the tenant failed to pay the gas bill. The tenant was required to pay
for gas under the addendum to the 1995 lease. See P-3, at 5. However, that
lease expired when the parties entered the 2003 lease. The 2003 lease never
mentioned gas. As such, the landlord cannot succeed on this Count, and the
tenant was entitled to JNOV as matter of law.
Ironically, in Count III, the landlord sought damages for the tenant’s
failure to install “separate gas, water, and electric services under the 1995
Lease, 2003 Lease, and addendums thereto.” Complaint at 4. However,
nothing in the 2003 lease required the tenant to install such utilities separate
and apart from the landlord’s original connections for the building. That
- 14 -
J-A25041-18
obligation was only in the addendum to 1995 lease, which expired in 2003.5
As such, the tenant was entitled to judgment as a matter of law on this Count.
In Count IV, the landlord sought additional rent in the amount of
$15,000 for unpaid U&O taxes.6 Unlike Counts I, III and V, where the landlord
could not show that the tenant agreed to pay additional rent for the items
sought in those counts, the 2003 lease provided that the tenant “is fully
responsible for paying all use and occupancy tax.” P-4 at 3.
Although the tenant was obligated to pay U&O taxes as additional rent,
the landlord failed to show that the tenant did not pay them. To the contrary,
the tenant demonstrated that it had paid the U&O taxes. See D-3; see also
N.T., 5/17/18, at 142-144. The evidence established that the landlord and
the tenant were both ”up-to-date as far as U&O taxes are concerned.” N.T.,
5/17/18, at 144. From all of the record evidence and drawing all inferences
therefrom in favor of the landlord, as the verdict winner, we conclude that the
landlord offered no proof that the tenant failed to pay the U&O taxes between
June 6, 2011 and the jury trial. As such, the tenant was entitled to JNOV on
Count IV.
Finally, in Count VI, the landlord sought payment under the lease’s
acceleration-of-rent provision; it demanded 44 months’ worth of pre-paid
____________________________________________
5 Any claim under the 1995 agreement would be barred by the four-year
statute of limitations. 42 Pa. C.S.A. §5255(a)(8).
6The Complaint’s drafter made the same copy and paste error here, too. See
Note 5, above.
- 15 -
J-A25041-18
rent, various taxes, and water/sewer bills, totaling $229,329.00. See
Complaint at 6.
The landlord did not included the accelerated-rent penalty in any of its
prayers for relief under its other breach-of-contract counts, as the lease’s
language provides. In fact, the landlord’s attorney never argued to the jury
that his client was seeking acceleration of rent in this case, nor did he ask the
trial judge for an instruction on this issue. As he told the jury:
We’re seeking just some basic stuff; what’s fair. We want
just the water that the tenant used just from the last couple
of years; not for everything. Just give us the big usage that
the tenant used, the business taxes. What the tenant used;
the gas.
N.T., 5/19/16, 47. The landlord has not advanced its accelerated-rent theory
of recovery, and we do not see how the jury could have, in any way, based its
verdict upon that clause. Accordingly, the tenant was entitled to JNOV as to
Count VI of the Complaint.
Because the landlord made its prima facie case of owed, unpaid, excess
real estate taxes, the tenant’s appellate issue of insufficient evidence warrants
it no relief at this juncture. However, our conclusion that the tenant should
have received JNOV on the other five Counts means the total amount of
damages awarded by the jury is not supported by the evidence.
In sum, the only claim for which the landlord presented sufficient
evidence was Count II, unpaid excess real estate taxes. The claims for water,
sewer, gas, use and occupancy taxes, and accelerated rent all fail. As such
- 16 -
J-A25041-18
the court should have granted judgment notwithstanding the verdict in favor
of the tenant on the unsupported claims in Counts I, III, IV, V and VI.
C. The Trial Court should have molded the verdict consistent with the
evidence at trial.
The tenant argues that the jury’s award of $38,558.00 is excessive and
the trial court abused its discretion by not reducing the award to comport with
the record evidence. See Tenant’s Brief at 29-30.
On this issue, the trial court stated in its 1925(a) Opinion stated that
“the award of $38,558.00 is not grossly disproportionate to the evidence the
landlord presented at trial.” Trial Court Opinion, 2/12/18, at 6-7.
While our standard of review for a trial court’s denial of remittitur usually
is quite yielding, our deference is not boundless. We have said:
remittitur should fix the highest amount any jury could
properly award, giving due weight to all the evidence
offered. Therefore, the correct question on review is
whether the award of damages falls within the uncertain
limits of fair and reasonable compensation or whether the
verdict so shocks the sense of justice as to suggest that the
jury was influenced by partiality, prejudice, mistake, or
corruption. On appeal, the Superior Court is not free to
substitute its judgment for that of the fact finder. Rather, it
is our task to determine whether the post-trial motions
judge committed a “clear” or “gross” abuse of discretion
when conducting its initial evaluation of a defendant's
request for remittitur.
Neal v. Bavarian Motors, Inc., 882 A.2d 1022, 1028–29 (Pa. Super. 2005)
(citations and quotations omitted).
- 17 -
J-A25041-18
The jury’s award of $38,558.00 cannot be supported by the law of
contracts in this case. As the landlord’s attorney explained to the jury in his
opening statement:
The bottom line is, my client was required to pay what the
tax was at the very beginning of the lease, and any increase
in value thereafter would require a math problem to be done
— which is the excess — that the tenant would be required
to pay.
It will be your job to actually do that basic math for us.
N.T., 5/17/16, at 37. We agree with counsel’s simple mathematics formula.
And this Court is equally capable of doing that basic math.
The uncontradicted evidence at trial, as Ms. Yeung submitted, was that
the tenant owed the excess real estate taxes for the relevant period as follows:
TAX YEAR PRINCIPAL BASE YEAR EXCESS/OVER
PRINCIPAL
2011 6,017.51 4,969.02 1,648.49
2012 6,872.53 4,969.02 1,903.51
2013 7,119.55 4,969.02 2,150.53
2014 11,820.01 4,969.02 6,850.99
2015 11,939.40 4,969.02 6,970.38
P-7 at 1. These numbers, although handwritten, were taken directly from the
City and School District of Philadelphia’s “Real Estate Tax Receipts” that Ms.
Yeung appended to her hand-drawn chart. See id. at 2, 11-14.
Using “basic math” to add up the five years of Excess/Over Principal, we
find that $19,523.90 is the maximum, possible award that the evidence
supports on Count II of the Complaint. N.T., 5/17/16, at 37; see also P-7 at
1. Had it correctly applied the law of contracts, the trial court should have
- 18 -
J-A25041-18
reduced the damages award to $19,523.90, because all of the other Counts
should have resulted in JNOV in the tenant’s favor.
Thus, we conclude the trial court abused its discretion by sustaining a
jury verdict that the law and the facts did not support. We will therefore
modify the verdict consistent with this Memorandum.
As a final matter, we reject the tenants claim for a new trial. See Luen
Fong Produce’s Brief at 30-31. Our appellate review has corrected the legal
errors below. As we explained, the evidence supports an award of $19,523.90
to the landlord; thus, a new trial is unwarranted.
IV. CONCLUSION
The tenant signed a lease obligating it to pay excess real estate taxes,
the tenant failed to pay them, and the landlord proved damages that resulted
from this breach. The maximum possible award the jury could give the
landlord for this breach was $19,523.90. In all other respects, the landlord
failed to prove its case, and the tenant was entitled to a judgment
notwithstanding the verdict. In light of this, we modify the jury verdict to
award $19,523.90 to the landlord.
Judgment affirmed as modified.
- 19 -
J-A25041-18
Judgment Entered.
Joseph D. Seletyn, Esq.
Prothonotary
Date: 4/9/19
- 20 -