JBRC v. Kelly Family Trust

CourtSuperior Court of Pennsylvania
DecidedFebruary 28, 2023
Docket98 MDA 2022
StatusUnpublished

This text of JBRC v. Kelly Family Trust (JBRC v. Kelly Family Trust) is published on Counsel Stack Legal Research, covering Superior Court of Pennsylvania primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
JBRC v. Kelly Family Trust, (Pa. Ct. App. 2023).

Opinion

J-A27009-22 and J-A27010-22

NON-PRECEDENTIAL DECISION - SEE SUPERIOR COURT I.O.P. 65.37

JBRC OF PENNSYLVANIA, LLC AND : IN THE SUPERIOR COURT OF JUST BELIEVE RECOVERY CENTER OF : PENNSYLVANIA CARBONDALE, LLC : : Appellants : : : v. : : No. 98 MDA 2022 : PATRICK J. KELLY FAMILY TRUST, : SAPIENT PROVIDENCE LLC, AND : BRETON EQUITY COMPANY CORP. :

Appeal from the Order Entered January 7, 2022 In the Court of Common Pleas of Lackawanna County Civil Division at No(s): 2018-CV-02236

JBRC OF PENNSYLVANIA, LLC AND : IN THE SUPERIOR COURT OF JUST BELIEVE RECOVERY CENTER OF : PENNSYLVANIA CARBONDALE, LLC : : : v. : : : PATRICK J. KELLY FAMILY TRUST, : No. 223 MDA 2022 SAPIENT PROVIDENCE LLC, AND : BRETON EQUITY COMPANY CORP. : : : APPEAL OF: PATRICK J. KELLY FAMILY : TRUST : J-A27009-22 and J-A27010-22

Appeal from the Order Entered January 7, 2022 In the Court of Common Pleas of Lackawanna County Civil Division at No(s): 2018-CV-02236

BEFORE: DUBOW, J., McLAUGHLIN, J., and COLINS, J.*

MEMORANDUM BY DUBOW, J.: FILED: FEBRUARY 28, 2023

JBRC of Pennsylvania, LLC (“JBRC, LLC”) and Just Believe Recovery

Center of Carbondale, LLC (“Just Believe Recovery Center”) (collectively, the

“JB Entities”) and Patrick J. Kelly Family Trust (the “Trust”) each filed appeals

from the January 7, 2022 order that struck a writ of execution entered in favor

of Patrick J. Kelly Family Trust (the “Trust”), found that the JB Entities were

entitled to a credit against money they owed to the Trust, and lifted a stay of

the enforcement of an ejectment judgment. In its appeal, the JB Entities

challenge numerous prior orders.1 In the Trust’s appeal, it challenges the

court’s decision to strike the writ of execution and to award the JB Entities a

credit against the Trust’s monetary damages. It also asserts that the appeal

____________________________________________

* Retired Senior Judge assigned to the Superior Court.

1 These orders include: (1) the October 25, 2018 order sustaining the Trust’s preliminary objections to three of five counts of the JB Entities’ complaint; (2) the December 11, 2019 order entering judgment on the pleadings against the JB Entities as to the remaining counts in the complaint and in favor of the Trust on its four counterclaims, and entering judgment in ejectment against JBRC; (3) the July 31, 2020 order conditionally granting the JB Entities’ request for stay relief on the judgment in ejectment; and (4) the June 14, 2021 order determining the monetary damages owed to the Trust on its counterclaims and modifying the conditions of stay relief.

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that the JB Entities filed is untimely.2 After careful review, we quash the JB

Entities’ appeal as untimely and affirm in part and reverse in part the January

7, 2022 order.

The relevant facts and procedural history are as follows. In September

2014, JBRC, LLC, purchased real estate formerly used as a hospital (the

“Property”). JBRC, LLC, leased the Property to Just Believe Recovery Center

which then operated a mental health and substance abuse treatment facility

at the Property.3

On April 10, 2017, the JB Entities executed a second mortgage loan

agreement (“Loan Agreement”) with the Trust for $800,000. The Loan

Agreement established a repayment schedule that provided, inter alia, that

the JB Entities would make their final payment on the mortgage approximately

one year later, on April 9, 2018. A Deed in Lieu of Foreclosure (“Deed”)

secured the mortgage and the Loan Agreement provided that the Trust could

file the Deed in the event of default.

Relevant to the instant appeal, the Loan Agreement defined the failure

to make a timely payment under the terms of the Note or the Loan

2 We have consolidated these appeals sua sponte.

3 On November 20, 2014, Just Believe executed a mortgage on the Property in favor of named-defendant Sapient Provident, LLC (“Sapient”). Sapient recorded the mortgage on November 25, 2014. On February 26, 2018, Sapient assigned the mortgage to named-defendant Breton Equity Company Corp. (“Breton”) for $550,000.

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Agreements as an “Event of Default.”4 The Loan Agreement provided

remedies for an Event of Default which changed depending on when the

default occurred. The Loan Agreement specified that the failure to make all

payments due under the Note “on or before the Final Payment Date [of April

9, 2018] shall constitute an Event of Default hereunder and shall entitle [the

Trust] to all rights and remedies set forth herein, in the Note or in any [] of

the other Loan Documents.”5

The JB Entities failed to make payments as required by the Loan

Agreement. On February 13, 2018, the parties entered into a Forbearance

and Release Agreement (“Forbearance Agreement”). In the Forbearance

Agreement, the JB Entities acknowledged that it was in default of the Loan

Agreement. The parties agreed that, upon the JB Entities’ payment of

$50,000, the Trust would refrain from exercising any of its remedies that the

Loan Agreement provided the Trust as a result of the JB Entities’ default of

the Loan Agreement. The JB Entities also agreed to pay the Trust the $50,000

immediately. In exchange, the Trust agreed that the JB Entities could remain

in possession of the Property and the Trust would wait until March 15, 2018

to exercise any of its remedies.6 Of most significance, the JB Entities agreed

to release the Trust from all obligations and liability under the Loan ____________________________________________

4 Loan Agreement, 4/10/17, at Art. VII ¶ 7.1.

5 Id. at Art. VII ¶ 7.1(a).

6 Forbearance Agreement, 2/13/18, at 1.

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Agreement, including the obligation to wait until April 9, 2018, to file the

Deed.7

The JB Entities did not cure their payment default during the forbearance

period. Accordingly, on March 16, 2018, the Trust exercised its right to file

the Deed.

Procedural History Relevant to the Judgment against the JB Entities

On April 13, 2018, the JB Entities filed a five-count complaint asserting

that the Trust violated the terms of the Loan Agreement by prematurely

recording the Deed.8, 9 In particular, the JB Entities claimed that because it

had not committed an “Event of Default” as defined in the Loan Agreement,

the Trust “illegally” filed the Deed on March 16, 2018, “before the [f]inal

[p]ayment [d]ate [of April 9, 2018] and in violation of the terms of the [] Loan

[Agreement], despite [the JB Entities] having complied with the terms of the

7 See id. at 1-2 (releasing the Trust from “any and all obligations . . . held by [the JB Entities] . . . related to . . . the substance of the terms and obligations therein provided [in the Loan Documents].”).

8 In particular, the JB Entities asserted claims for: (1) breach of contract of the Loan Agreement; (2) unjust enrichment; (3) fraud in the inducement; (4) quiet title; and (5) injunctive relief.

9 The JB Entities asserted their quiet title claim also against Sapient and Breton, and Sapient subsequently filed crossclaims against Breton and the Trust. Those claims have been resolved or withdrawn and Sapient and Breton are not parties to this appeal.

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Forbearance Agreement.”10 The JB Entities concluded that through these

actions, the Trust unlawfully acquired ownership of the Property.

The Trust filed preliminary objections to the complaint. On October 25,

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JBRC v. Kelly Family Trust, Counsel Stack Legal Research, https://law.counselstack.com/opinion/jbrc-v-kelly-family-trust-pasuperct-2023.