Nexus Real Estate v. Erickson, J., Appeal of: JLB , 174 A.3d 1 ( 2017 )

J-A01006-17
2017 Pa. Super. 180
NEXUS REAL ESTATE, LLC IN THE SUPERIOR COURT OF
PENNSYLVANIA
v.
JOHN ERICKSON
JOHN ERICKSON
v.
JASON COHEN, JLB RETASA SHADY, LLC
AND NEXUS REAL ESTATE, LLC
APPEAL OF: JLB RETASA SHADY, LLC
No. 972 WDA 2016
AND NEXUS REAL ESTATE, LLC
Appeal from the Judgment Entered June 28, 2016
In the Court of Common Pleas of Allegheny County
Civil Division at No(s): LT-15-1230
BEFORE: BOWES, OLSON AND STRASSBURGER,* JJ.
OPINION BY BOWES, J.: FILED JUNE 12, 2017
JLB Retasa Shady, LLC (“JLB”), property owner, and Nexus Real
Estate, LLC (“Nexus”), property manager, (collectively “Landlord”), appeal
from the June 28, 2016 judgment entered in favor of tenant John Erickson.
We affirm.
In July 2002, Mr. Erickson entered into a lease with the Reddy Family
for an apartment in their forty-seven unit building located on Shady Avenue
in the Squirrel Hill neighborhood of Pittsburgh. Initially, he paid $550 per
month in rent, but that sum increased gradually to $700 per month over the
* Retired Senior Judge assigned to the Superior Court.
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twelve years he resided there under the Reddys’ ownership. In November
2014, JLB bought the real estate.
On November 24, 2014, a two-foot-by-two-foot section of Mr.
Erickson’s bathroom ceiling fell into his bathtub. When Mr. Erickson notified
the Reddy family of the ceiling collapse, he was advised that they no longer
owned the building. They assured him, however, that they would convey his
request for repairs to the new owners.
JLB had hired Nexus to manage the building. Mr. Erickson, as well as
the other tenants, were notified by Nexus on December 12, 2014, that they
would be required to sign a new lease within nine days or vacate their units
by December 31, 2014. Prior to signing a new lease on December 19, 2014,
Mr. Erickson met with Laura Beynon, the leasing agent for Nexus. She
reassured him that the hole in his bathroom ceiling and failing heat would be
remedied promptly. Although Mr. Erickson would have preferred that the
defects were cured prior to signing a new lease, he maintained that he did
not have time to pack and locate a new place in which to live in the
nineteen–day window of time.
Mr. Erickson introduced photographs depicting the condition of his
bathroom ceiling as of December 12, 2014. When the promised repairs had
not been undertaken by January 2015, he telephoned Nexus. Nexus
employees told Mr. Erickson they would take care of it. The heat failed
entirely in February, and Mr. Erickson could not remain in his apartment. He
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stayed elsewhere for most of the month, but returned at the end of February
with a space heater and a military sleeping bag.
Mr. Erickson renewed his complaints in March, but to no avail. He had
no heat throughout the winter and the hole in the bathroom ceiling was not
repaired. On June 10, 2015, Mr. Erickson discovered the air conditioning
also did not work. When he reported this latest deficiency to Nexus via
email, he received reassurances that day, and again on June 16, that Nexus
would fix the problem. Nexus finally installed a window air-conditioning unit
in July. Mr. Erickson notified the management company on July 28, 2015
that the unit was not cooling and that the daytime temperature in his
apartment was in the mid-nineties. Nexus promised to address the problem
by July 30, but did not do so.
Mr. Erickson offered into evidence photographs taken on June 14,
2015 that depicted water entering through the hole in his bathroom ceiling.
His complaints to Nexus were ignored. In the beginning of August, the Vice
President of Nexus, Craig Falk, was on the premises talking to a roofer. Mr.
Erickson availed himself of the opportunity to discuss the hole in the ceiling
and the non-working air conditioning and Mr. Falk accompanied him to his
apartment. Mr. Falk assured him, “We’ll have it fixed.” N.T., 5/5/16, at 22.
Nothing was done.
On August 5, 2015, Mr. Erickson emailed Nexus and advised that it
was raining in his bathroom, there was visible mold, and that he was
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coughing. He received no response. On August 16, he begged Nexus to do
something, but again, there was no response. Finally, Nexus replied to his
August 25th plea, confirmed on August 27, 2015, that it found leaks in the
ceiling, and advised that it would be making repairs within a few days.
Mr. Erickson left his apartment and returned on September 5, 2015. A
significant part of his bathroom ceiling had collapsed during his absence. He
was excited when, on September 10, Nexus appeared to have fixed the hole
in the ceiling. “That excitement faded away when” he moved the dropped
ceiling tiles and realized that “the big gaping hole was still present.” Id. at
25. He could see mold in the ceiling. He closed the door to the bathroom
and left the apartment for two months. When he returned on December 6,
2015, the ceiling tiles had fallen and what remained of the plaster ceiling
was hanging. He captured the condition in photographs.
Finally, on December 11, Nexus arranged for someone to rip out the
ceiling to the bare rafters and scrub it with bleach to ameliorate the mold.
Shortly before this occurred, Mr. Erickson had gone to the Department of
Permits, Licenses and Inspections, and the agency had inspected his
apartment on December 9, 2015, and filed a report. Nexus employees also
told Mr. Erickson that the Allegheny Health Department had contacted them
about the possibility of mold in his bathroom. Mr. Erickson believed that his
complaints to city agencies prompted Nexus to hire the mold remediation
company and repair the ceiling.
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Nonetheless, the water problem persisted. Plastic had been stapled
into the rafters and was collecting water when it rained. Instead of fixing
the roof, Nexus placed makeshift gutters of corrugated plastic in the rafters
to collect the rainwater dripping through the roof and channel it to the
outside. It was not until December 17, 2015, that Nexus dry walled Mr.
Erickson’s bathroom ceiling. By that time, he had already made plans to
vacate the premises.
At the non-jury trial, Mr. Erickson also complained that when he signed
the new lease, Ms. Beynon made no mention of major outdoor construction.
He offered the testimony of Rick Beadling, another tenant, who confirmed
that Ms. Beynon told him only that there would be landscaping work on the
premises. Mr. Erickson introduced photographs that depicted scaffolding
covering the front of the building starting in January 2015, plywood sheets
over trenches in lieu of sidewalks, and no lighting or railings. He described
the condition as treacherous. Although Nexus recommended that the
tenants use alternate entrances, Mr. Erickson testified that those routes
were impassable especially at night. The problems with safe ingress and
egress remained throughout the summer of 2015, and it was not until
October that proper lighting was installed.
In addition to these issues, Mr. Erickson complained that construction
noise commenced at 6:30 a.m., and, as the project neared conclusion,
persisted seven days per week. Water service to the apartments was shut
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off at least twenty-five times, a fact that was confirmed by Mr. Beadling. In
October 2015, Mr. Erickson began paying his rent into an escrow account.
The situation spawned two lawsuits. Landlord filed a magisterial
district justice action against Mr. Erickson claiming that he breached the
lease by failing to make timely rent payments totaling $1,575. Following
judgment in Mr. Erickson’s favor, Landlord appealed to compulsory
arbitration. On February 16, 2016, arbitrators entered an award in favor of
Mr. Erickson, and Landlord appealed to the court of common pleas. A non-
jury trial was scheduled for May 5, 2016.
In the meantime, Mr. Erickson filed an action against JLB, its principal
Jason Cohen, and Nexus with the magisterial district justice, alleging breach
of the warranty of habitability and violations of the Unfair Trade Protection
and Consumer Protection Law, (“UTPCPL”). That action subsequently was
appealed to arbitration, and then to the Court of Common Pleas of Allegheny
County. By order dated May 5, 2016, and with the consent of the parties,
the Honorable Alan Hertzberg consolidated both actions for non-jury trial.
An award in favor of Mr. Erickson was entered on Landlord’s breach of
contract claim. Mr. Erickson prevailed on his claims against JLB and Nexus.
The court tripled the $9,750 in rent paid by Mr. Erickson due to violations of
the UTPCPL for a total of $29,250, plus it awarded attorney’s fees of $2,900,
for a total verdict of $32,150.
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After a motion for post-trial relief was filed seeking to modify the
verdict, the trial court, by order dated June 8, 2016, reduced the verdict
from $32,150 to $29,900, and entered judgment. Following a motion for
reconsideration, the trial court again modified its verdict to $23,150, but
provided that Mr. Erickson was to retain the rent he had escrowed.
Landlord timely appealed and complied with the trial court’s order to
file a Pa.R.A.P. 1925(b) concise statement of errors complained of on
appeal. It challenged the trial court’s award of treble damages under the
Pennsylvania UTPCPL, 73 P.S. § 201-1, et seq. On appeal, Landlord
presents two issues:
1. Whether the Court committed an error of law or abused its
discretion in awarding triple damages pursuant to the
Pennsylvania Unfair Trade Practices and Consumer Protection
Law 73 P.S. § 201-1, et seq. where the evidence clearly does
not support such a finding.
2. Whether the Court erred in awarding full rent reimbursement
as “actual damages” where insufficient proof was provided to
support the claim that the leased apartment was
uninhabitable.
Appellants’ brief at 4.
Preliminarily, we find that Landlord’s second issue is waived as it was
not identified in its Pa.R.A.P. 1925(b) statement. See Pa.R.A.P.
1925(b)(4)(vii) (“Issues not included in the Statement and/or not raised in
accordance with the provisions of this paragraph (b)(4) are waived.”). Since
Landlord’s first issue implicates the legal standard for an award of treble
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damages under the UTPCPL, our standard of review is de novo, and our
scope of review is plenary. Schwartz v. Rockey, 932 A.2d 885 (Pa. 2007).
Landlord acknowledges that the UTPCPL applies to landlord-tenant
cases, but maintains that treble damages awards are reserved only for the
most egregious cases where the landlord’s conduct was deceitful and illegal.
In support of its position, Landlord directs us to our unpublished, non-
precedential memorandum in Pierre v. MP Cloverly Partners, LP, 133
A.3d 64 (Pa.Super. 2015), in contravention of this Court’s rules. 1 As
additional examples of the type of egregious conduct that merited treble
damages, Landlord cites Pikunse v. Kopchinski, 631 A.2d 1049 (Pa.Super.
1993), where the landlord discarded furniture and appliances in retaliation
for the tenant’s failure to pay rent, and Wallace v. Pastore, 742 A.2d 1092
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1
See 210 Pa. Code § 65.37, which provides in pertinent part:
(A) An unpublished memorandum decision shall not be relied
upon or cited by a Court or a party in any other action or
proceeding, except that a memorandum decision may be
relied upon or cited (1) when it is relevant under the
doctrine of law of the case, res judicata, or collateral
estoppel, and (2) when the memorandum is relevant to a
criminal action or proceeding . . .
Furthermore, in the memorandum decision cited, the jury rejected tenant’s
contention that the apartment was vermin infested, and found no violation of
UTPCPL that would support any damages. Thus, we did not reach the issue
of treble damages.
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(Pa.Super. 1999), where the landlord withheld the tenant’s security deposit
and misrepresented the existence and extent of property damage.
Furthermore, Landlord argues that the record reveals no deceptiveness
on its part. It maintains that its representatives met with Mr. Erickson,
inspected his apartment, explained the process for submitting maintenance
requests, and provided the opportunity for him to note in the new lease that
certain conditions required attention. He did not avail himself of that
opportunity. According to Landlord, Mr. Erickson’s periodic requests for
maintenance were acted upon after he followed the proper procedures and
repaired, and treble damages were not warranted.
Mr. Erickson counters that the trial court properly applied the standard
enunciated in Schwartz, supra, and rejected Landlord’s claim that
egregious conduct was required to support an award of treble damages. He
maintains that the trial court heeded the direction of the Supreme Court to
“focus on the presence of intentional or reckless, wrongful conduct.” Id. at
898. Furthermore, he points to a record replete with instances of Landlord’s
deception and false promises.
In Schwartz, our Supreme Court discussed the role of the court in
assessing treble damages pursuant to the UTPCPL:
[T]he statute, on its plain terms, does not provide any standard
pursuant to which a trial court may award treble damages. In
construing its terms, we find particularly relevant the principles
of statutory construction authorizing consideration of the
occasion and necessity for the statute, the mischief to be
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remedied, the object to be attained, and the consequences of a
particular interpretation. See 1 Pa.C.S. § 1921(c).
Schwartz, supra at 898. The Court recognized that the UTPCPL is a
consumer protection statute, in which the General Assembly has employed
broad phrasing that our Supreme Court has instructed us to construe
liberally. Recognizing that the UTPCPL’s treble damages provision had “both
punitive and remedial aspects,” the Schwartz Court concluded that the trial
court’s discretion “should not be closely constrained by the common-law
requirements associated with the award of punitive damages.” Id. see also
Meyer v. Cmty. College of Beaver County, 93 A.3d 806, 815 (Pa. 2014)
(noting the hybrid nature of treble damages with both punitive and remedial
aspects). Nonetheless, it cautioned that the trial court’s discretion was not
unfettered. The Supreme Court concluded that trial courts “should focus on
the presence of intentional or reckless, wrongful conduct, as to which an
award of treble damages would be consistent with, and in furtherance of, the
remedial purposes of the UTPCPL.” Schwartz, supra at 897-898.
Appellate courts should review such decisions “for rationality, akin to
appellate review of the discretionary aspect of equitable awards.” Id. at
898; Dibish v. Ameriprise Fin., Inc., 134 A.3d 1079, 1091 (Pa.Super.
2016).
The trial court applied the correct legal standard in making its
determination. It found “multiple instances of intentional or reckless,
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wrongful conduct by Nexus.”2 Trial Court Opinion, 8/29/16, at 2. The court
noted Nexus’s December 2014 assurances that defects in Mr. Erickson’s
ceiling and heat would be remedied immediately. N.T., 5/5/16, at 14.
Despite repeated complaints, the heat and air conditioning in Mr. Erickson’s
apartment were non-functioning until September 10, 2015. Thus, Mr.
Erickson endured a winter without heat and a summer without air
conditioning. The trial court pointed to the report authored by the City of
Pittsburgh Department of Permits, Licenses and Inspections indicating that
the large hole in the ceiling of the bathroom had not been properly repaired
even after Mr. Erickson vacated the unit. Exhibit O.
The court credited Mr. Erickson’s testimony that when he contacted
Nexus about the ceiling and the heat and air conditioning, they promised to
take care of it or send it to maintenance. N.T., 5/5/16, at 15-16. Copies of
email correspondence with Nexus confirmed that the latter promised that the
repairs would be made “today” or “as soon as possible,” which did not occur.
The court found credible Mr. Erickson’s testimony recounting his
conversations with Nexus Vice President Craig Falk in August 2015, and
expressly found incredible Nexus’s representation that Mr. Erickson did not
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2
The trial court referred to both defendants as Nexus throughout.
However, it noted that, although Nexus was named as landlord in the lease,
Nexus directed Mr. Erickson to make monthly rental payments payable to
JLB, the property owner. See Trial Court Opinion, 8/29/16, at 1 n.1.
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report the problem with the heat until June 2015. The court concluded that
Nexus could have devoted the necessary resources to repair Mr. Erickson’s
ceiling, heat, and air conditioning by January or February 2015, but
“deliberately delayed both in responding . . . and in devoting the resources
necessary for the repairs.” Trial Court Opinion, 8/29/16, at 5. Nexus’s false
promises and inaction was “cruel and callous behavior,” and the type of
intentional or reckless, wrongful conduct that warranted treble damages
under Schwartz.
There is no legal support for Landlord’s contention that the trial court
should have applied some amorphous egregiousness measure in determining
whether to award treble damages. The trial court applied the proper legal
standard. Furthermore, we have no basis to disturb the court’s credibility
determinations. In short, the record supplies a firm rational basis for the
trial court’s finding that the harm to Mr. Erickson was caused by Landlord’s
intentionally wrongful and deceptive conduct that supported an award of
treble damages.
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Judgment affirmed.
Judgment Entered.
Joseph D. Seletyn, Esq.
Prothonotary
Date: 6/12/2017
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