222 South Manoa v. Lavin, G.

• Court: Superior Court of Pennsylvania
• Decided: November 3, 2020
• Docket: 3123 EDA 2019
• Status: Unpublished

Opinion

J-A19011-20

NON-PRECEDENTIAL DECISION - SEE SUPERIOR COURT I.O.P. 65.37

222 SOUTH MANOA, LLC : IN THE SUPERIOR COURT OF : PENNSYLVANIA : v. : : : GEORGE J. LAVIN III, ESQUIRE AND : GEORGE J. LAVIN & ASSOCIATES, : PLLC : No. 3123 EDA 2019 : Appellant :

Appeal from the Order Entered September 27, 2019 In the Court of Common Pleas of Delaware County Civil Division at No(s): No. 2017-005707

BEFORE: PANELLA, P.J., McLAUGHLIN, J., and McCAFFERY, J.

MEMORANDUM BY PANELLA, P.J.: FILED NOVEMBER 3, 2020

George J. Lavin III, Esquire, and George J. Lavin & Associates, PLLC,

(collectively, “Tenants”) appeal from the judgment entered by the Court of

Common Pleas of Delaware County following a bench trial and subsequent

verdict rendered in favor of 222 South Manoa, LLC, (“Landlord”). The seminal

issue in this case is the term of lease that was created by implication after the

expiration of a written commercial lease between Tenants and Landlord.

Throughout the proceedings, Tenants adamantly asserted that because there

was some level of negotiation prior to the commercial lease’s expiration, a

month-to-month lease had been created. However, the trial court found that

Tenants failed to establish the saliency and dates of these negotiations and

further found that Tenants failed to provide requisite notice of their intention

to vacate the leased property. Consequently, the court required Tenants to J-A19011-20

pay the remaining balance on a full year of rent, beginning on the date of the

lease’s expiration. After our thorough review of the record, we conclude that

the trial court did not abuse its discretion or commit an error of law in finding

that the lease renewed for a full year term when Tenants failed to provide

adequate notice of their intent to vacate the premises. Accordingly, we affirm.

Tenants leased commercial space from Landlord. The relationship was

defined in a lease agreement, which provided for a one-year term. In that

agreement, there was a clause explaining that if Tenants or Landlord did not

provide written notice to the other party that it did not intend to renew the

lease three months prior to the lease’s expiration, the lease would

automatically renew under the lease’s original terms for an additional one-

year term. After the first year of the lease passed and no notice was provided

by either party, the lease renewed in accordance with that condition. The

expiration date of the new one-year lease term became June 30, 2016.

Tenants remained on the premises beyond June 30, 2016, and did not

provide any notice of an intent to terminate the lease prior to that date.

However, on September 26, 2016, Tenants notified Landlord that it intended

to vacate on October 31, 2016.

Relying on the ninety-day notice requirement, Landlord filed suit under

the belief that it was entitled to a full year of rental payments. Tenants filed a

response to Landlord’s complaint, which included new matter and

counterclaims asserting, among other things, that there had been an explicit

rejection of the old lease agreement and ongoing negotiations for a new

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contract. The new matter and counterclaims asserted, in relevant part, that

the parties were engaged in intensive renewal negotiations in March 2016.

Tenants claimed that these negotiations constituted a denial of the lease

agreement’s renewal, as written, because Tenants sought more on-site space.

Landlord failed to respond to Tenants’ pleading, and as a result, the substance

of Tenants’ averments were deemed admitted under Pa.R.C.P. 1029(b).

At trial, the court found that by utilizing a totality of the circumstances

approach, Tenants failed to demonstrate: 1) that it was clearly repudiating

the lease as it had been written; and 2) that both parties were engaged in

meaningful negotiations to alter the lease at the end of its term. Accordingly,

the terms and conditions of the written lease agreement governed the parties,

and because Tenants failed to provide proper notice, the agreement renewed

for another full year.

On appeal, Tenants raise six issues for our review:

1) Did the trial court err when it failed to accept factual averments in [Tenants'] new matter and counterclaims when Landlord failed to respond to those assertions?

2) Did the trial court improperly permit testimony on behalf of Landlord that contradicted its admissions due to its failure to respond to Tenants?

3) Did the trial court abuse its discretion or err as a matter of law when it based its decision on evidence and testimony that conflicted with Landlord’s admissions?

4) Did the trial court improperly discredit [Tenants’] testimony?

5) Did the trial court improperly analyze and apply Clairton Corp. v. Geo-Con, Inc., 635 A.2d 1058 (Pa. Super. 1993), to the facts

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at issue here?

6) Did the trial court improperly read and/or interpret the lease agreement?

See Appellant’s Brief, at 4-5.

When reviewing non-jury trials, we determine whether the findings of

facts by the trial court are supported by the record and whether the trial court

erred in applying the law. See Century Indem. Co. v. OneBeacon Ins. Co.,

173 A.3d 784, 802 (Pa. Super. 2017). We must consider the evidence in the

light most favorable to the verdict winner and will reverse the trial court only

where the findings are not supported by the evidence of record or are based

on an error of law. See id.

In construing a written lease agreement, “the law declares the writing

to be not only the best, but the only, evidence of their agreement.” Yocca v.

Pittsburgh Steelers Sports, Inc., 854 A.2d 425, 436 (Pa. 2004) (citation

omitted). Here, the relevant portion of the lease agreement provided that the

term of the lease would be for one year ending on June 30, 2015. It then

provided that if neither party provided three months’ written notice, “this

Lease will automatically renew under the same terms and conditions for an

additional one (1) year term.”

The primary thrust of all six of Tenants’ arguments is that the trial court

erred in failing to give proper weight to the judicially admitted averments

contained in Tenants’ new matter and counterclaims and, as a result, erred in

failing to find that the lease became month-to-month after June 30, 2016.

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Instead, Tenants complain, the court not only permitted Landlord to testify

and controvert the admissions, but also found Tenants’ testimony to not be

credible.

Landlord’s failure to file a pleading denying the averments in Tenants’

new matter and counterclaim meant that Tenants’ averments were considered

admitted by Landlord. See Pa.R.C.P. 1029(b). “Judicial admissions … are

formal pleadings … by a party or his counsel which have the effect of

withdrawing a fact from issue and dispensing wholly with the need for proof

of the fact.” Durkin v. Equine Clinics, Inc., 546 A.2d 665, 670 (Pa. Super.

1988) (citation omitted). A judicial admission cannot be contradicted by the

party that made it. See Jewelcor Jewelers and Distributors, Inc. v. Corr,

542 A.2d 72, 75 (Pa. Super. 1988).

Here, it is clear that the trial court treated the averments in Tenants’

new matter and counterclaim as judicially admitted. See Trial Court Opinion,

2/7/2020, at 1 n.1; 6 n.2. Despite this, Tenants argue “[t]he trial court

mistakenly allowed [Landlord’s] representative, Brian Quinn, to erroneously

testify contrary to those [judicially admitted] facts.” Appellant’s Brief, at 31.

While there may be some merit to Tenants’ claims regarding the content of

Quinn’s testimony, we conclude the trial court, sitting as fact-finder, did not

err or commit an abuse of discretion in its handling of the judicial admissions.

There are differences between trial by jury and trial by judge. One of

these differences is that judges are presumed to be able to disregard

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irrelevant or prejudicial testimony. See Commonwealth v. Green, 347 A.2d

682, 683 (Pa. 1975) (rejecting contention that “mere exposure to prejudicial

evidence is enough to nullify a judge’s verdict in a case”). Accordingly, unless

Tenants can establish that the trial court relied on the parts of Quinn’s

testimony that are contradicted by the judicial admissions, they are due no

relief.

In essence, Tenants claim the judicial admissions foreclosed any

possibility that the trial court could find in favor of Landlord. Tenants rely

heavily on Clairton Corp. v. Geo-Con, Inc., 635 A.2d 1058 (Pa. Super.

1993), to argue that since Landlord had legally admitted that the parties were

negotiating a change in lease terms in March 2016, the lease agreement’s

renewal clause no longer controlled the outcome.

We find that there are significant distinctions between Clairton and the

circumstances here. For instance, there is no indication in the text of Clairton

that the lease in that case had a renewal clause, nor did it have a “hold-over”

provision governing what would happen at the end of the lease’s term. See

id., at 1059.

Tenants argue the renewal clause here did not clearly establish that it

applied beyond the first renewal. However, the trial court concluded that the

language was clear and that it established the terms for every subsequent

year.

Upon reviewing the language of the renewal clause, we agree with the

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trial court. The renewal clause does not contain any restrictive language. The

natural and logical reading of the clause does not limit it to only the first year.

Further, as the trial court notes, both parties are experienced practitioners of

law and therefore should be expected to understand the import of the

language used by the renewal clause.

To escape the operation of the clear language of the renewal clause,

Tenants argue that, pursuant to Clairton, the existence of negotiations

between the parties prior to the renewal of the lease negates the application

of the clause. Like the trial court, we disagree. Clairton dealt with a lapsed

express contract, which then led to the Court’s discussion on the applicability

of a common-law solution. See id.

Finally, Tenants argue that the trial court erroneously utilized

extraneous evidence to define or contradict the plain language of the lease’s

terms. See Appellant’s Brief, at 50. In short, Tenants aver: 1) the lease’s

language indicates that the contract is subject to only one renewal period and

after that, it would terminate; 2) Landlord’s admissions and testimony indicate

that the lease was or would be month-to-month; and 3) in accordance with

Clairton, the negotiations meant that the lease would automatically be

converted to month-to-month after its term ended. See Appellant’s Brief, at

53.

As noted previously, the trial court disagreed with Tenants’ construction

of the express terms of the renewal clause. Further, we conclude that Clairton

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does not apply under these circumstances. There is no need to search for a

common-law answer; the lease agreement itself provides the renewal term in

the absence of a timely written objection to renewal.

As none of Tenants’ arguments on appeal merit relief, we affirm the

judgment.

Judgment affirmed.

Judgment Entered.

Joseph D. Seletyn, Esq. Prothonotary

Date: 11/03/2020

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