Tsung Tsin Associates v. Leun Fong Produce

Superior Court of Pennsylvania·Decided April 9, 2019·No. 3724 EDA 2016·Unpublished

Opinion

NON-PRECEDENTIAL DECISION – SEE SUPERIOR COURT I.O.P. 65.37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

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.

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.

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.

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.

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).

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