Military Resource Enhancement v. Green Diamond

J-S03018-22
NON-PRECEDENTIAL DECISION - SEE SUPERIOR COURT I.O.P. 65.37
MILITARY RESOURCE ENHANCEMENT : IN THE SUPERIOR COURT OF
SPECIALISTS, INC. : PENNSYLVANIA
:
Appellant :
:
:
v. :
:
: No. 954 WDA 2021
GREEN DIAMOND SERVICES, LLC :
Appeal from the Order Entered July 15, 2021
In the Court of Common Pleas of Cambria County
Civil Division at No(s): No. 2021-0610
BEFORE: LAZARUS, J., SULLIVAN, J., and PELLEGRINI, J.*
MEMORANDUM BY SULLIVAN, J.: FILED: APRIL 1, 2022
Military Resource Enhancement Specialists, Inc. (“MRES”), appeals from
the order granting the motion to enforce the license agreement filed by Green
Diamond Services, LLC (“Green Diamond”). We affirm.
The trial court set forth the relevant factual and procedural background
of this matter as follows:
This case arises out of the sale of [real] property and
removal of items contained on the property in Cambria County,
Pennsylvania. On or about October 28, 2016, the parties entered
into an Option and Agreement of Purchase and Sale for the
purchase of 48.460 acres of land and improvements comprising
the former Bethlehem Steel rail car plant in Franklin Borough
(“property”) for a sale price of $800,000.00. After extensive
negotiation and litigation, the transfer of the real estate occurred
on October 30, 2020, wherein [MRES] conveyed the property to
. . . Green Diamond in accordance with [an arbitration award].
Green Diamond alleges that MRES refused to enter into a license
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* Retired Senior Judge assigned to the Superior Court.
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agreement with Green Diamond to govern entry onto the property
by MRES in order to perform the clean[]up of the property. On
March 10, 2021, MRES filed a complaint and petition for
preliminary injunction to prevent Green Diamond from disposing
of MRES property after Green Diamond allegedly changed the
locks on the maintenance building on the property. On March 25,
2021, the parties appeared before this court and entered into an
agreement (“license agreement”) related to the petition for
preliminary injunction. The license agreement set forth the timing
of the MRES clean[]up of the property and set deadlines for the
removal of items. Following the entry of the license agreement,
Green Diamond was allegedly made aware that MRES intended to
remove a 150[-]ton hydraulic press (“press”), an air compressor
(“compressor”), and a six[-]ton truck lift (“lift”) from the
maintenance building. Green Diamond objected to the removal of
these three items by MRES, arguing that the items are fixtures
and not personal property, and ownership of the said items passed
to Green Diamond upon sale of the property. On April 22, 2021,
MRES did remove the press, the compressor, and the lift from the
maintenance building. Green Diamond filed the current motion to
enforce the license agreement on May 5, 2021[, to which it
attached numerous documents and photographs, including the
license agreement, arbitration award, sale documents, and
photographs of the property. MRES filed a response to the motion
to which it attached a copy of the Option and Agreement of
Purchase and Sale]. A hearing was held before this court on June
22, 2021, at which the attorneys presented oral argument and
referenced the documents and photographs previously submitted
to the trial court. On July 15, 2021, the court granted the motion
[to enforce the license agreement. The trial court also awarded
costs for the reinstallation of the items and attorneys’ fees for
preparing and presenting the motion.]
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Trial Court Opinion, 7/25/21, at 1-2 (unnecessary capitalization omitted).1
MRES filed a timely notice of appeal and a court-ordered Pa.R.A.P. 1925(b)
concise statement of errors complained of on appeal.2
MRES raises the following issues for our review:
1. Whether the trial court erred, as a matter of law, in determining
that the air compressor, press[,] and lift were fixtures attached
to the building; and as such, were part of the building and were
included in the sale of the building?
2. Whether the trial court abused its discretion in finding that a
piece of equipment that is required to be anchored in place for
safe operation becomes a fixture that is permanently attached
to the building and becomes a part of the building as sold?
MRES’s Brief at 4.
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1 MRES did not file a post-trial motion. See Pa.R.Civ.P. 227.1. However,
neither the parties nor the trial court denominated or noticed the June 22,
2021 hearing as a trial. See Wolk v. Sch. Dist. Of Lower Merion, 197 A.3d
730, 740-41 (Pa. 2018) (holding that when the trial court enters an order in
a non-jury case that disposes of the last remaining claims, it should specify
that the hearing is deemed a trial and clarify that post-trial motions are due).
Moreover, parties to a proceeding that does not amount to a trial do not need
to file post-trial motions to preserve issues for appeal. See G & G Investors,
LLC v. Simmons Real Estate Holdings, LLC., 183 A.3d 472, 477 (Pa. Super.
2018). In the instant matter, the parties did not present testimony or new
evidence at the June 22, 2021 hearing on the motion to enforce the license
agreement. Therefore, it was not a proceeding that required post-trial
motions for issue preservation. See Vautar v. First Nat. Bank of Pa., 133
A.3d 6, 11-12 (Pa. Super. 2016) (providing where parties took no new
testimony and introduced no new evidence, and court issued verdict based
solely on evaluation of existing record, the proceeding did not amount to trial
and post-trial motions were unnecessary).
2 The trial court did not author a Pa.R.A.P. 1925(a) opinion, and instead
elected to rely on its July 15, 2021 opinion explaining its order granting the
motion to enforce the license agreement.
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MRES’s issues involve the same arguments; therefore, we will address
them together.3 As the parties elected to enter into the license agreement in
lieu of further litigation in the proceedings below, we view the license
agreement as a type of settlement agreement for purposes of appellate
review. Our standard of review of a trial court’s ruling on a motion to enforce
a settlement agreement as follows:
Our Court’s standard of review of a trial court’s grant or
denial of a motion to enforce a settlement agreement is plenary,
as the challenge is to the trial court’s conclusion of law. The
appellate court is free to draw its own inferences and reach its
own conclusions from the facts as found by the trial court.
However, the appellate court is only bound by those findings of
fact by the trial court that are supported by competent evidence.
Casey v. GAF Corp., 828 A.2d 362, 367 (Pa. Super. 2003)
Chattels that are used in connection with real estate generally fall into
one of three categories. See Clayton v. Lienhard, 167 A. 321, 322 (Pa.
1933). Those categories are as follows:
First, chattels that are not physically attached to realty are
always personalty. Second, chattels which are annexed to realty
in such a manner that they cannot be removed without materially
damaging either the realty or the chattels are always fixtures. The
third category consists of those chattels that are physically
connected to the real estate but can be removed without material
injury to either the land or the chattels. When a chattel falls into
the third category, its status as a fixture or as personalty depends
upon the objective intent of the [owner] to permanently
incorporate [the] chattel into real property, as evidenced by the
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3 We note with disapproval that the entirety of MRES’s discussion of its first
issue is incorporated by reference into the discussion of its second issue, which
otherwise consists of a single sentence. Further, while MRES has framed its
first issue as a claim of legal error by the trial court, it argues the trial court
abused its discretion in finding that the press, compressor, and lift are fixtures.
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proven facts and surrounding circumstances entered into
evidence.
Lehmann v. Keller, 684 A.2d 618, 621 (Pa. Super. 1996) (internal citations
and quotation marks omitted). The parties agree that the press, compressor,
and lift fall into the third category of chattels. Therefore, the question before
this Court is whether the proven facts and surrounding circumstances
evidence an objective intent to permanently incorporate these items into the
maintenance building.
The general test used in determining when an article of personalty is a
fixture has three components: (1) the relative permanence of attachment to
realty; (2) the extent to which the chattel is necessary or essential to the use
of the realty; and (3) the intention of the parties to make a permanent addition
to the realty. See Noll by Noll v. Harrisburg Area YMCA, 643 A.2d 81, 87-
88 (Pa. 1994). The considerations in making such a determination may
include:
[T]he degree to which and manner in which the object is
attached to real property, the ease of removing the object,
whether the object may be removed without damaging the real
property, how long the object has been attached to the real
property, whether the object is necessary or essential to the real
property, and the conduct of the party and whether it evidences
an intent to permanently attach the object to the reality.
Id. (citations omitted).
MRES does not challenge the terms of the license agreement or that the
ownership of the press, compressor, and lift, if deemed to be fixtures, passed
to Green Diamond upon the sale of the property. Instead, MRES contends
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that trial court misapplied the above legal standards and improperly analyzed
the facts of this case when applying the three-part fixture test.
In discussing the first prong of the fixture test, which considers the
relative permanence of attachment to realty, MRES concedes that: (1) the
press, compressor, and lift were bolted to the floor of the maintenance
building; (2) the press was also anchored to the floor by four angle irons
embedded in the concrete; (3) the press, compressor, and lift were required
to be hardwired into the maintenance building’s electrical system to operate
at a high voltage; and (4) the compressor was connected to the air pipes in
the maintenance building. MRES’s Brief at 8, 13-14. Nevertheless, MRES
asserts that manner in which the press, compressor, and lift were installed
does not indicate that they were intended to be permanent fixtures. Instead,
MRES contends that such attachments indicate only that the items were used
in accordance with the manufacturer’s recommendations for safe operation
and in compliance with OSHA standards. MRES likens the press, compressor,
and lift to common household items, such as a dresser or television, which
remain personal property despite being bolted to a wall. MRES additionally
points out that it was required to remove several other pieces of equipment
from the property which were hardwired and bolted in place, including a scale,
baler, camera building, wood shop, rectifiers, pedestal grinder, tire machine,
and drill press.
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Turning to the second prong of the fixture test, which considers the
extent to which the object is necessary or essential to the use of the realty,
MRES indicates that the agreement for sale of the property, entered into by
the parties in 2016, clearly states that the transfer was “to allow Purchaser to
operate a rail tank car repair, retrofit, repurposing and car cleaning facility
and a bulk transfer and water processing facility on the on the [p]roperty.”
MRES’s Brief at 15 (quoting Option and Agreement of Purchase and Sale,
10/28/16, at 4). MRES contends that there cannot be any inference that the
stated purpose for the property would require the press, compressor, and lift
because they were located in a building that is not connected to the train
tracks.
In discussing the third prong of the fixture test, which considers the
intention of the parties to make a permanent addition to the realty, MRES
claims that the press, compressor, and lift appear to have been installed
during the ownership of the property by Bethlehem Steel. MRES asserts that
no testimony was presented regarding Bethlehem Steel’s intentions when it
installed the equipment. MRES concedes that the press, compressor, and lift
were installed in the maintenance building when it purchased the property in
2002, but argues that this fact does not indicate that the items are fixtures to
be included in all subsequent sales of the property.
The trial court explained its determination that the press, compressor,
and lift are fixtures, as follows:
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First, . . . the three items were permanent attachments to
the maintenance building and had been bolted into the concrete
floor or hardwired into the electrical system of the maintenance
building. Second, . . . the maintenance building is used to service
trucks and heavy machinery, which is one reason why Green
Diamond purchased the building as part of the property purchase,
Lastly, upon considering the objective manifestations of the
parties in the context of the first two components of the test, the
court finds that, because the items were permanently made a part
of the maintenance building, and because the items had never
previously been removed at any time, it was the intent of the
parties that the items remained with the maintenance building as
fixtures. . . . [T]he court hereby finds that because the items were
bolted into or hardwired into [the structure], . . . they were not
intended to be removed from the maintenance building.
Trial Court Opinion, 7/15/21, at 6 (unnecessary capitalization omitted).
In reaching its determination, the trial court considered the reasoning
of the Commonwealth Court in Cureton v. Phila. School Dist., 798 A.2d 279(Pa. Cmwlth. 2002).4 In Cureton, the Commonwealth Court determined that
a scroll saw in a high school wood shop classroom was realty rather than
personalty because (1) the saw had been in its place at the high school
classroom since 1987; (2) the saw was permanently hardwired through the
building’s main power supply; (3) the saw was bolted to the ground by four
bolts, and (4) the saw was never removed from the wood shop classroom.
See id. at 283. The Cureton Court looked to the following factors which
indicated an intention by the school district to make the scroll saw part of its
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4 While decisions of the Commonwealth Court are not binding on this Court,
they may serve as persuasive authority. See Lynn v. Aria Health Sys., 227
A.3d 22, 32 (Pa. Super. 2020).
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realty: (1) the nature of the scroll saw; (2) the status of the annexor in respect
to the realty; (3) the manner of annexation; and (4) the use for which the
scroll saw was installed. Id.Mindful of our standard of review, we conclude that the trial court
applied the correct standard for determining whether the press, compressor,
and lift were fixtures, and its factual findings in support of its determination
are amply supported by competent evidence of record. MRES concedes that
(1) the 150-ton hydraulic press, air compressor, and six-ton truck lift were
bolted to the floor of the maintenance building; (2) the press was also
anchored to the floor by four angle irons embedded in the concrete; (3) the
press, compressor, and lift were required to be hardwired into the
maintenance building’s electrical system to operate at a high voltage; and (4)
the compressor was connected to the air pipes in the maintenance building.
MRES’s Brief at 8, 13-14. Thus, there is no dispute that the press,
compressor, and lift were affixed to the maintenance building in a relatively
permanent manner.
MRES further concedes that Bethlehem Steel constructed the
maintenance building and, as owner of the premises, installed the press,
compressor, and lift.5 Id. at 15-16. MRES describes these items as large
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5 See Canon-McMillan Sch. Dist. V. Bioni, 533 A.2d 179, 184 (Pa. Cmwlth.
1987), case remanded on other grounds, 555 A.2d 901 (Pa. 1989) (explaining
that the status of the annexor to the realty involves a determination of
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pieces of industrial equipment designed to be bolted to the floor for safe
operation. Id. at 13. MRES acknowledges that the press, compressor, and
lift, as originally installed by Bethlehem Steel, were intact when it purchased
the property in 2002, and that MRES never moved these items during its
eighteen-year ownership of the property. Id. at 16. MRES explains that it
used the maintenance building as a shop for the repair and maintenance of all
equipment and vehicles it used in connection with its scrap operation. MRES
acknowledges that, similar to its use of the maintenance building, Green
Diamond intended to, inter alia, “operate a rail tank car repair, retrofit,
repurposing and car cleaning facility” on the property. See MRES’s Brief at
15 (quoting Option and Agreement of Purchase and Sale, 10/28/16, at 4).
These facts indicate that the press, compressor, and lift were necessary or
essential to the use of maintenance building.
Finally, we consider whether the record demonstrates that the parties
intended to make the equipment a permanent addition to the realty. In
making this determination, we look to the objective intent of the owner to
permanently incorporate the equipment into the maintenance building, as
evidenced by the proven facts and surrounding circumstances entered into
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whether the annexor is a mortgagor, lessee, lessor, owner, secured creditor,
etc.). Here, the fact that Bethlehem Steel was the owner of the maintenance
building when it installed the press, compressor, and lift (rather than a lessee
or a third party) militates toward a finding that it intended the equipment to
be permanent fixtures. See id.
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evidence. See Lehmann, 684 A.2d at 621. As our Commonwealth Court has
explained, “[t]he degree of attachment necessary to evidence an intent of
permanence is not high.” In re Appeal of Sheetz, Inc., 657 A.2d 1011,
1014 n.7 (Pa. Cmwlth. 1995) (concluding that canopies placed over the
gasoline pumps at a Sheetz service station became part of the real estate for
purposes of assessing the value of the property). Further, the fact that an
item has been and can be moved does not mean the intention was not to
make it permanent. See id. at 1014. “It is sufficient if the item is intended
to remain where affixed until worn out, until the purpose to which the realty
is devoted is accomplished or until the item is superseded by another item
more suitable for the purpose. Id.In the instant matter, the proven facts and surrounding circumstances
put forth in the record evidence an objective intent by Bethlehem Steel to
permanently incorporate the press, compressor, and lift into the maintenance
building and that such equipment was to remain where affixed until worn out
or superseded. This conclusion is supported by the manner in which the press,
compressor, and lift were affixed to the maintenance building, the use of the
maintenance building, and the fact that, in the decades since their original
installation,6 the equipment had never been moved by either Bethlehem Steel
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6 Green Diamond claimed that the press, compressor, and lift were installed
in 1972 when Bethlehem Steel originally constructed the maintenance
building. See Trial Court Opinion, 7/15/21, at 3. MRES did not dispute the
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or MRES during their respective ownership of the structure. As the record
supports the trial court’s determination that the press, compressor, and lift
are fixtures, and we discern no legal error in that ruling, MRES’s issues warrant
no relief.
Order affirmed.
Judgment Entered.
Joseph D. Seletyn, Esq.
Prothonotary
Date: 04/01/2022
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date of installation for the press and compressor; however, it claimed that lift
was not installed until 1991. See id. at 4. Even assuming that the lift was
not installed until 1991, the equipment had been unmoved for at least twenty-
nine years at the time the property was transferred to Green Diamond in 2020.
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