Opinion
No. 952 MDA 2019
01-04-2021
Joan P. GROVE v. PERRY A. & Lana R. Lutz, and NCWPCS MPL 24 Year Sites Tower Holdings LLC Appeal of: Perry A. & Lana R. Lutz
John Latimer Senft, York, for appellant. John Ebken, Pittsburgh, for NCWPCS, appellee. Michael R. Kelley, Harrisburg, for Grove, appellee. Randall Stanley Pajovich, Harrisburg, for Grove, appellee
John Latimer Senft, York, for appellant.
John Ebken, Pittsburgh, for NCWPCS, appellee.
Michael R. Kelley, Harrisburg, for Grove, appellee.
Randall Stanley Pajovich, Harrisburg, for Grove, appellee
BEFORE: DUBOW, J., NICHOLS, J., and COLINS, J.
Retired Senior Judge assigned to the Superior Court.
OPINION BY DUBOW, J.: This case involves a seller's attempt to extend a lease, and collect the lease payments, on a property after the seller had sold the property to the buyers. In particular, Appellee Joan P. Grove ("Seller") owned the property at issue and in 2003, sold the property to Appellants Perry A. and Lana R. Lutz ("Buyers"). In 2015, twelve years after Seller sold the property to Buyers, Seller entered into an amended lease in order to continue to collect rents from a tenant on the property. Even though Seller no longer owned the right to lease the property, the trial court blessed the transaction. Thus, the trial court erroneously granted Seller's Motion for Judgment on the Pleadings and denied Buyers’ Motion for Judgment on the Pleadings and we reverse.
Factual History
Seller and her now-deceased husband owned a 67-acre farm in Chanceford Township, York County. In 1993, they executed a "Land Lease Agreement" ("1993 Lease") with the Pennsylvania Cellular Telephone Co. ("Tenant") in which Tenant agreed to pay rent to the Seller in exchange for the Tenant's right to install and maintain a cell communication tower on a portion of their property ("Property"). The term of the 1993 Lease, including renewal terms, extended until 2019:
NCWPCS MPL 24 Year Sites Tower Holdings LLC ("NCWPCS") is a successor to Pennsylvania Cellular Telephone Company and a party to the proceedings below. NCWPCS, however, is not a party to this appeal.
Although the Lease was executed in 1993, the record indicates that the Lease commenced on June 16, 1994.
2. Term. This [Lease] shall commence on the date hereof and shall continue in effect for an initial term (the "Original Term") of five years from the Rental Commencement Date (as defined below). Thereafter, this agreement shall continue in force and effect upon the terms and conditions herein for four (4) renewal terms of five (5) years each unless Lessee terminates this [Lease] by providing written notice to Lessor at least sixty (60) days before the expiration of the Original Term or any renewal term.
1993 Lease, annexed as Exh. A to Complaint-Action for Declaratory Judgment, dated 4/17/17.
On October 10, 2003, Seller sold two parcels of land, which included the Property, and all rights attendant to those parcels of land, to Buyers. The Deed specifically provides:
WITNESSETH, That in consideration of THREE HUNDRED EIGHTY THOUSAND ($380,000) DOLLARS, in hand paid, the receipt whereof is hereby acknowledged, the said Seller does hereby grant and convey to the said Buyer, their heirs and assigns, ALL the following described two (2) parcels of land ....
Deed, Exh. F annexed to Complaint (emphasis added). The Deed did not reserve to Seller any rights in the Property. Rather, the Deed merely acknowledged the existence of the 1993 Lease and granted to Seller the right to receive those rents until 2019 when the 1993 Lease expires:
The rent for the communication tower is reserved to the seller ... for the remainder
of the term of the lease and for the additional term extensions as set forth in the lease dated December 21, 1993.
Deed, ¶¶ 11(b)(emphasis added).
In 2015, unaware that Seller had sold the Property, Tenant approached Seller to negotiate an extension of the 1993 Lease. On March 24, 2015, Seller and Tenant executed a Third Amendment to the 1993 Lease ("Third Amendment"). Tenant agreed to continue to pay rent to Seller for the use of the Property with options to extend the term for forty years or until June 15, 2059. Third Amendment, annexed to Complaint at Exh. H.
Procedural History
On April 7, 2017, Seller filed an action against Buyers and Tenant seeking a judgment declaring that the Third Amendment is valid and that she has the right to collect cell tower rents until 2059. Complaint at 11.
Tenant filed an Answer and New Matter, which it later amended to include a counterclaim asserting breach of contract in the event that the trial court determined that the Deed did not give Seller the authority to extend the term of the Lease beyond June 2019. Buyers filed an Answer, New Matter, and a Counterclaim seeking a Declaratory Judgment that Seller's rights to any cell tower rental payments expired in June 15, 2019.
NCWPCS Am. Answer, New Matter & Counterclaim, 1/16/18, at 15, ¶22.
See Buyers Ans., New Mtr, and Counterclaim, 06/12/17, at 6-8 (unpaginated).
Seller filed preliminary objections to Tenant's Amended Answer, New Matter and Counterclaim. The Honorable N. Christopher Menges denied the preliminary objections after a hearing held on May 11, 2018.
Motions for Judgment on the Pleadings
On October 26, 2018, Buyers and Tenant filed a joint Motion for Judgment on the Pleadings seeking dismissal of Seller's Complaint based on their respective counterclaims that Buyers, as of June 16, 2019, have the right to receive the rental payments from the Property. ("Buyer's and Tenant's Motion for Judgment on the Pleadings"). Seller filed an Answer in opposition.
On January 11, 2019, Judge Richard K. Renn denied the Buyers’ Motion for Judgment on the Pleadings. The court concluded that "because the [D]eed between the parties expressly includes reference to the lease agreement and [Seller's] reservation of rights to the rental from the tower," the terms of the Lease itself and principles of contract law validated the Third Amendment. Order denying NCWPCS Motion for Judgment on the Pleadings, filed 1/11/19, at 9-11.
Seller's Motion for Judgment on the Pleadings
On February 25, 2019, Seller filed a Motion for Judgment on the Pleadings. She averred that because of the trial court's January 11th Order, the "law of the case" doctrine applies. Accordingly, she reasoned, she is entitled to a declaratory judgment allowing her to receive the cell tower rents in accordance with the Third Amendment to the Lease. Plntf's Motion, 2/25/19, at 3-4.
Tenants took no position on the Seller's Motion for Judgment on the Pleadings. See NCWPCS MPL's Statement in Response, filed 3/25/19.
On May 22, 2019, the trial court granted Seller's Motion for Judgment on the Pleadings. The court reiterated its prior reasoning that the Lease and Third Amendment should be construed together and held that it was bound by its prior January 11, 2019 Order. Trial Ct. Order, 5/22/19, at 6.
Buyers filed a timely Notice of Appeal and a court-ordered Pa.R.A.P. 1925(b) statement. The trial court filed a Rule 1925(a) Opinion referring this Court to its prior January 11, 2019, and May 22, 2019 Orders resolving the Motions for Judgment on the Pleadings.
Issues on Appeal
Buyers raise the following questions for our resolution:
1. Did the [c]ourt below err as a matter of law and/or abuse its discretion in denying [Buyer's] Motion for Judgment on the Pleadings, when the Deed executed by [Seller] clearly and unambiguously cut off her right to receive cell tower rental payments as of June 15, 2019?
2. Did the [c]ourt below err as a matter of law and/or abuse its discretion when it granted [Seller's] Motion for Judgment on the Pleadings based on its determination that its decision denying [Buyers’] Motion constituted the law of the case, even though there were abundant allegations by [Buyers] which necessitated denial of [Seller's] Motion?
3. Did the [c]ourt below err as a matter of law and/or abuse its discretion when it denied [Buyers] the opportunity to conduct discovery and present evidence related to the language of the Deed and the parties’ intentions?
4. Did the [c]ourt below err as a matter of law and/or abuse its discretion when it ignored the fact that [Seller] had come to the [c]ourt with unclean hands, where the Lease Amendment she signed contained numerous material misrepresentations concerning her ownership rights?
Appellants’ Brief at 3.
Legal Analysis
Our review of a decision to grant a Motion for Judgment on the Pleadings is limited. In re Weidner , 595 Pa. 263, 938 A.2d 354, 358 (2007). "A motion for judgment on the pleadings will be granted where, on the facts averred, the law says with certainty that no recovery is possible." Id . (citation omitted). See also Front St. Dev. Assocs., L.P. v. Conestoga Bank, 161 A.3d 302, 307 (Pa. Super. 2017) (reiterating that a court properly grants judgment on the pleadings "when there are no disputed issues of fact and the moving party is entitled to judgment as a matter of law." (citation omitted)). Because this presents a legal question, our scope of review is plenary. Weidner , 938 A.2d at 358.
Each issue raised in this appeal requires that we examine the meaning of the Deed. "When construing a deed, a court's primary object must be to ascertain and effectuate what the parties themselves intended" by first examining the meaning of plain words of the deed itself. Consolidation Coal Co. v. White , 875 A.2d 318, 326 (Pa. Super. 2005) (citation omitted). Among the factors the court should consider is the nature of the interest conveyed:
[C]ertain rules are applicable in the construction of deeds. Among such rules are those providing: (1) that the nature and quantity of the interest conveyed must be ascertained from the instrument itself and cannot be orally shown in the absence of fraud, accident or mistake and we seek to ascertain not what the parties may have intended by the language but what is the meaning of the words; (2) effect must be given to all the language of the instrument and no part shall be rejected if it can be given a meaning; (3) the language of the deed shall be interpreted in the light of the subject matter, the apparent object or purpose of the parties and the conditions existing when it was executed.
Yuscavage v. Hamlin , 391 Pa. 13, 137 A.2d 242, 244 (1958) (some emphasis in original); Mackall v. Fleegle , 801 A.2d 577, 581 (Pa. Super. 2002). See , i.e. , Edgett v. Douglass , 144 Pa. 95, 22 A. 868 (1891) (ascertaining the intent of the parties in reserving a right contained in a deed by construing the plain meaning of the words used).
In this case, Buyers argue that when Seller conveyed the Property to them in 2003, Seller conveyed all of her rights to the Property, including her right to lease the Property. Thus, Seller lacked the authority to enter the Third Amendment and has no right to receive the rents pursuant to the Third Amendment. Appellants’ Br. at 10-12. Buyers conclude that the trial court erred in denying Buyers’ Motion for Judgment on the Pleadings. We agree.
In the instant case, the Deed clearly and unambiguously transferred the two parcels, including the Property, to the Buyers. The Deed specifically provides:
WITNESSETH, That in consideration of THREE HUNDRED EIGHTY THOUSAND ($380,000) DOLLARS, in hand paid, the receipt whereof is hereby acknowledged, the said Seller does hereby grant and convey to the said Buyer, their heirs and assigns, ALL the following described two (2) parcels of land ....
Deed, Exh. F annexed to Complaint (emphasis added).
Such a conveyance includes the conveyance of all rights attendant to the property, including the right to lease the property. See Wilcox v. Penn Mut. Life Ins. Co. , 357 Pa. 581, 55 A.2d 521, 528 (1947) (reiterating that the essential attribute of property ownership is the right to "possess, use, enjoy and dispose" of the property. (citation and emphasis omitted)). Thus, Seller transferred her right to lease the Property to Buyers in 2003.
The trial court erroneously relies on the provision in the Deed that provides Seller with the right to receive rents from the 1993 Lease as reserving to Seller the right to lease the Property after she sold the Property to Buyers. This provision provides:
The rent for the communication tower is reserved to the seller ... for the remainder of the term of the lease and for the additional term extensions as set forth in the lease dated December 21, 1993.
Deed, § 11(b) (emphasis added). The clear and unambiguous language of this provision is merely to allow Seller to collect the rent for the remaining term of the 1993 Lease. It does not, either explicitly or implicitly, grant to Seller the right to lease the Property after the sale. Thus, Seller held no interest to transfer to the Tenant when she entered into the Third Amendment and had no authority to convey that right to the Tenant. Since Seller, when she entered into the Third Amendment, attempted to transfer an interest in real estate that she did not hold, the Third Amendment is void.
To accept the trial court's interpretation of the Deed—that Seller held the right to lease the Property after the sale—requires us to rewrite the language of the Deed and add to the Deed language granting Seller the right to lease the Property after the sale. This right was not part of the transaction and was not mentioned in the Deed. Since the Deed clearly and unambiguously transferred all rights attendant to the Property to Buyers in 2003 and is silent about granting Seller the right to lease the Property after the sale, the trial court erroneously granted this right to Seller.
For the foregoing reasons, we conclude the trial court erred as a matter of law in denying Buyers’ Motion for Judgment on the Pleadings and subsequently granting Seller's Motion for Judgment on the Pleadings. Accordingly, we (1) reverse the January 11, 2019 Order; (2) reverse the May 22, 2019 Order; and (3) remand for further proceedings.
Since Seller conveyed her right to lease the property when she sold it in 2003, Seller lacked the authority to enter into the Third Amendment to the Lease in 2015. Thus, the Third Amendment to the Lease is void and Tenant's Counterclaim of breach of contract is revived. Further, we leave it to the trial court to address whether the Tenant erroneously paid rent to the Seller and any remedies that the Buyers may have.
Orders reversed. Case remanded. Jurisdiction relinquished.
Judge Colins joins the opinion.
Judge Nichols files a concurring and dissenting opinion.
CONCURRING AND DISSENTING OPINION BY NICHOLS, J.:
I concur with the majority's conclusion to reverse the trial court's decision, but I disagree with its reasoning, and therefore, I respectfully dissent in part.
The Deed provides that the "rent for the communication tower is reserved to [Seller], her heirs, executors, administrators and assigns for the remainder of the term of the lease and for the additional term extensions as set forth in the lease dated December 21, 1993." Deed at ¶ 11(b). The majority asserts that the "Deed did not reserve to Seller any rights in the Property," but then quotes the Deed's clause that the "rent for the communication tower is reserved to" Seller. Majority Op. at 824. A reservation (or an exception) clause, of course, may encompass rent. Butler v. Charles Powers Estate ex rel. Warren , 620 Pa. 1, 65 A.3d 885, 887 (2013) ; Ralston v. Ralston , 55 A.3d 736, 741-42 (Pa. Super. 2012) (distinguishing the terms "reservation" and "exception" and explaining that "even if the term ‘reservation’ is used, if the thing or right reserved is in existence, then the language in fact constitutes an exception[, which] retains in the grantor the title of the thing excepted" (citations omitted)). Here, Seller is the grantor.
In any event, notwithstanding the aforementioned clause, the majority nonetheless construes the Deed as including "the conveyance of all rights attendant to the property, including the right to lease the property." Majority Op. at 827 (quoting Willcox for the proposition "that the essential attribute of property ownership is the right to ‘possess, use, enjoy and dispose’ of the property"). Therefore, the majority holds that Seller "transferred her right to lease the Property to the Buyers in 2003." Id.
Initially, I do not read Willcox as broadly as the majority. First, Willcox resolved questions regarding the interpretation of the Community Property Law of 1947, and not real property. Willcox , 55 A.2d at 522. It is an "axiom that decisions are to be read against their facts, [which] prevents the wooden application of abstract principles to circumstances in which different considerations may pertain." Maloney v. Valley Med. Facilities, Inc. , 603 Pa. 399, 984 A.2d 478, 485-86 (2009) (citation omitted); accord Morrison Informatics, Inc. v. Members 1st Fed. Credit Union , 635 Pa. 636, 139 A.3d 1241, 1247 (2016) (noting, "the holdings of judicial decisions are to be read against their facts" (citation omitted); Tincher v. Omega Flex, Inc. , 628 Pa. 296, 104 A.3d 328, 397 (2014) (stating, "[T]his Court's decisions are read against the facts because ‘our decisional law generally develops incrementally, within the confines of the circumstances of cases as they come before the Court. For one thing, it is very difficult for courts to determine the range of factual circumstances to which a particular rule should apply in light of the often myriad possibilities’ " (citations omitted)).
The Willcox Court explained as follows:
The Community Property Law proclaims that property acquired by either spouse during marriage and after the effective date of the act, except that which is the separate property of either, shall be deemed the community or common property of the husband and wife, and each shall be vested with an undivided one-half interest therein. Practically all the remaining provisions, however, would seem to be in conflict with this pronouncement, with the apparent result that each spouse is not in reality given an undivided one-half interest in the so-called community or common property. For what is meant by the ownership of property? According to common law concepts property is ‘the right of any person to possess, use, enjoy and dispose of a thing.’ Wynehamer v. People , 13 N.Y. 378, 433. It ‘is composed of certain constituent elements, to wit, the unrestricted right of use, enjoyment, and disposal of that object.’ City of St. Louis v. Hill , 116 Mo. 527, 533, 22 S.W. 861, 862, 21 L.R.A. 226. Is the wife, or the husband as the case may be, invested by the Community Property Law with any real right to the possession, use, enjoyment and disposal of the alleged community property in which she or he is said to be given a one-half interest? An analysis of some of the provisions of the act will show that that question must be answered in the negative.
Willcox , 55 A.2d at 528.
Second, Willcox did not construe any deed. In contrast, in Wright v. Misty Mountain Farm, LLC , 125 A.3d 814 (Pa. Super. 2015), the sellers sold the property at issue to the buyers, subject to a clause in the deed referencing a preexisting oil and gas lease. Wright , 125 A.3d at 817. Specifically, the deed had two "exceptions and reservations," which follow:
Excepting and reserving unto the herein grantors all rights in oil, gas and minerals on property hereby conveyed with the right of ingress and egress and the further right to build or establish coal tipples, and to remove said minerals with least damage as possible to said lands, said oil and gas having been leased under Lease dated June 16, 1949 ....
Further, reserving unto the herein grantors the right to maintain, operate and use saw mill on said property for a period of six months from the date hereof, all property of said mill to be fully removed from said premises six months from the date hereof.
Id. The 1949 lease expired, and the property buyers and their successors in interest subsequently executed leases. Id. Eventually, the successors in interest to both the buyers and sellers disputed ownership of the oil and gas rights. Id.
The trial court granted summary judgment in favor of the sellers’ successor in interest. Id. at 817-18. The buyers’ successor in interest appealed, arguing that because the sellers’ preexisting oil and gas lease expired in 1959, the oil and gas rights vested in the buyers’ successors in interest. Id. at 819. The Wright Court explained that the first deed clause was an exception and the second deed clause was an exception to an exception. Id. at 821. Because the first deed clause was an exception, the Wright Court rejected the buyers’ successor in interest's argument and held that the rights to lease the oil and gas belonged to the sellers’ successors in interest—not the buyers’ successor in interest. Id. at 821-22 (noting that the "fact that the [buyers and their successors] have treated the oil and gas as their own, and have leased the oil and gas several times over the years, is of no moment. Under the law, title to the oil and gas has always belonged to the [sellers] and their successors in interest"). Here, although I agree with the majority's result, I do so on different grounds. Further, I disagree with the majority's holding that the "conveyance of all rights attendant to the property, including the right to lease the property," unreservedly terminated the Seller's right to extend the Lease. Majority Op. at 827. In my view, the Deed clause at issue contains a latent ambiguity resulting in two reasonable interpretations, such that the trial court should have denied the Seller's motion for judgment on the pleadings. See Synthes USA Sales, LLC v. Harrison , 83 A.3d 242, 251 (Pa. Super. 2013). The first reasonable interpretation is that the Deed clause "December 21, 1993" is a limiting adjectival phrase restricting the Seller only to the original and renewal terms set forth in the Lease—an interpretation raised by the Buyers and rejected by the trial court. See Trial Ct. Order, 1/11/19, at 11; see also Appellants’ Brief at 14. The second reasonable interpretation is that the Deed clause "December 21, 1993" is a descriptive label that did not bar the Seller and NCWPCS from amending the Lease—an interpretation raised by the Buyers and adopted by the trial court. See Trial Ct. Order at 11-12; see also Appellee's Brief at 19-20. Akin to Wright , I suggest that Seller's right to renew a lease relating to the property may not necessarily unconditionally terminate when the property is sold. See Wright , 125 A.3d at 819-22.
Given this stage of the proceedings, I would remand for further proceedings to construe the Deed rather than, as the majority does here, grant outright relief to the Buyers. For these reasons, I respectfully concur in the relief granted but dissent from the majority's reasoning.