Pizza Zone, LLC v. Catalina Partners, L.P. ( 2023 )

J-A16033-23
NON-PRECEDENTIAL DECISION - SEE SUPERIOR COURT OP 65.37
PIZZA ZONE, LLC, AND PIZZA ZONE : IN THE SUPERIOR COURT OF
II, LLC : PENNSYLVANIA
:
Appellants :
:
:
v. :
:
: No. 1172 MDA 2022
CATALINA PARTNERS, L.P., :
COLONIAL PARK MALL REALTY :
HOLDING, LLC, AND KOHAN RETAIL :
INVESTMENT GROUP :
Appeal from the Judgment Entered November 4, 2022
In the Court of Common Pleas of Dauphin County Civil Division at No(s):
2020-CV-07541-CV
BEFORE: PANELLA, P.J., BENDER, P.J.E., and McCAFFERY, J.
MEMORANDUM BY McCAFFERY, J.: FILED: AUGUST 15, 2023
In this commercial lease matter, Pizza Zone, LLC, and Pizza Zone II, LLC
(collectively, Appellant) appeal from the judgment entered in the Dauphin
County Court of Common Pleas, following a non-jury trial and post-trial
motions, in favor of Colonial Park Mall Realty Holding, LLC (Appellee).
Appellant avers the trial court erred in: (1) denying relief on its claim that
Appellee improperly converted restaurant equipment, inventory, and other
property; (2) improperly weighing a lay witness’ testimony with respect to the
value of restaurant equipment; (3) awarding accelerated rent to Appellee, as
it resulted in double recovery, where Appellee took repossession of the subject
premises and has leased it to a new tenant; (4) denying punitive damages for
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Appellee’s use of distraint to justify the conversion of property; (5) denying
Appellant the return of its security deposit; and (6) awarding Appellee
attorneys’ fees. With respect to conversion, we determine the court erred in
denying relief on Appellant’s claim, and thus reverse that portion of the
judgment and remand for calculation of the value of the converted property.
On the issue of accelerated rent, the trial court agrees it was error to award
this to Appellee. We reverse this verdict, however, on the ground Appellee
waived it for failing to present any supporting evidence or argument at trial.
In light of the foregoing, we vacate the award of attorneys’ fees to Appellee
and remand for reconsideration. We deny relief on the remaining two
issues — distraint and the return of the security deposit. We thus vacate the
judgment in part, reverse in part, affirm in part, and remand for further
proceedings.
I. Underlying Facts
The trial court summarized the underlying facts as follows:
[O]n May 20, 2016, [Appellee’s predecessor in interest] entered
into a ten-year Lease with [Appellant] and its principal [Mohamed]
Elbayoumy, to lease commercial space within the Colonial Park
Mall for the operation of a pizzeria.[1] The Lease was personally
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1 Appellant entered into the lease with Catalina Partners, L.P., who, in
November of 2017, sold its interest to Appellee. See Trial Ct. Op., 11/10/22,
at 1. Nevertheless, Appellant’s 2020 counseled complaint named Catalina
Partners, L.P. as a defendant. The complaint also named Kohan Retail
Investment Group as a defendant; it was dismissed from the action at trial.
Id. at 2 n.2.
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guaranteed by Elbayoumy. The initial rent was $1,667.67 per
month with a scheduled increase in July 2018. . . .
As scheduled, [Appellant’s] rent increased in July of 2018 to
$2,500 per month. [However, Appellant] continued to pay
$1,666.67 over the next fourteen months, through August 2019,
resulting in an alleged rental payment deficit of $11,526.62.
[Additionally, f]rom September 2019 through April of 2020,
[Appellant] allegedly failed to pay rent due in the total amount of
$20,000.
[Appellee claimed that o]n April 17, 2020, it provided a
written Default Notice to Elbayoumy[,] informing him that
[Appellant] was in default for failing to [pay] $31,652.62 in rent.
[Appellee] demanded that all amounts due be paid in full
immediately[, and if not, Appellee] would seek any remedy
available under the Lease, including eviction.
Trial Ct. Op. at 1-2 (paragraph break added).
Appellant did not cure the default, and Appellee filed a complaint on July
14, 2020,
asserting one count against [Appellant] for breach of the Lease
and one count against Elbayoumy for breach of his Guaranty.
[Appellee] alleged that as a result of defaults under the Lease and
Guaranty Agreement, [it] exercised its right under the Lease to
peaceably reenter and recover possession of the premises.
[Appellee] sought $251,834.02 in damages jointly against
[Appellant] and Elbayoumy, . . . including $44,334.02 for past-
due rent, interest and fees, and $207,500.00 for accelerated rent
for the entire unexpired balance of the Lease term. [Appellee]
also [sought] reasonable costs[ and attorneys’ fees[.]
Trial Ct. Op. at 2 (paragraph break added).
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On September 27, 2020, Appellant filed a complaint against Appellee,2
acknowledging “it made a number of late payments due to poor business,” but
alleging Appellee’s representative had “told Elbayoumy that because business
was poor at the mall, [Appellant] should continue paying the lower amount.”
Trial Ct. Op. at 2. Appellant denied Appellee provided any written notice of
default, and averred a breach of the lease by Appellee’s
preventing it from accessing the property, and effectively
terminating the Lease prior to its expiration without providing
notice. [Appellant] sought $5,000 per month in lost income for
these breaches and the return of its $3,333.34 security deposit.
[Secondly, Appellant] asserted a claim for conversion of all
[its] restaurant equipment and personal property that had been
left on the property following the Lease termination. [Appellant
claimed] damages [of $80,000] for the value of converted
restaurant equipment and personal property[, and] an additional
$10,000 for the value of ingredients and food stock allegedly
disposed by [Appellee. Appellant] also sought costs and
attorneys’ fees.
Id. at 3 (paragraph break added). For ease of discussion, we will refer to all
of the alleged converted property together as the “restaurant equipment.”
II. Trial Evidence
The trial court consolidated the two actions and this matter proceeded
to a two-day non-jury trial on August 30 and September 30, 2021. We review
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2 As discussed above, Appellant named additional defendants. See n.1,
supra.
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the trial evidence, thoroughly summarized by the trial court. See Trial Ct. Op.
at 3-11.
First, as Appellant does not presently challenge the award of unpaid rent
against it, we briefly recount the following evidence. Sherease Riley, who
became Appellee’s mall property manager in May of 2020, testified that from
July of 2018 to August of 2019, Appellant paid $1,667.67 monthly, although
the rent amount was $2,500. Trial Ct. Op. at 3-4. Beginning in December
2018, the rental payments “became sporadic,” and the last rental payment
was made in February 2020. Id. Nevertheless, Riley admitted she had no
evidence Appellant was informed, before April of 2020, that it was not paying
enough rent. Id.
Meanwhile, Elbayoumy testified that in July of 2018, a mall
representative told him he could “keep paying the lower rent,” although
Elbayoumy could not recall this person’s name, “had never met him in
person[,] and . . . had no written documentation confirming the alleged
agreement.” Trial Ct. Op. at 7. Nevertheless, Elbayoumy acknowledged he
missed the October 2019 and February 2020 rent payments, and that after
the mall closed for the COVID-19 pandemic, “he was no longer able to pay
rent because he had no business income[.]” Id.
Riley, the mall property manager, testified that on April 17, 2020, then-
property manager Nikki Fry provided Elbayoumy with a notice of default, via
email to mohamed250001@hotmail.com. Trial Ct. Op. at 5. Riley was copied
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on this email. Id. The subject line was “RE: Default Notice,” and attached to
the email was the notice itself, which stated:
You are hereby given notice of default under your license
agreement effective June 2016 . . . .
You have failed to pay timely rent per your lease
agreement, with charges totaling $31,652.62.
These charges must be paid in full immediately in order to cure
the default. If payment is not made[,] or other arrangements
[with Appellee not made, then Appellee] will be free to exercise
any and all remedies available to it under the lease and the laws
of this state, including . . . commencement of eviction
proceedings. Please also note that under the terms of your lease
and the applicable law, [Appellee] may be able to collect from you
not only this amount, but interest, collection costs and attorney’s
fees if this matter is not satisfactorily resolved immediately.
If you have any questions regarding this matter, please contact
the undersigned immediately by email at
nikkilzy@colonialparkmall.com.
Trial Ct. Op. at 5 (emphases added), quoting Trial Exh. D-5 (letter
attachment).
Riley testified that the following day, April 18, 2020, Elbayoumy replied
to the email, with his email message “appear[ing] in the same email chain.”3
Trial Ct. Op. at 5. Elbayoumy, however, denied he received the April 17th
email, yet admitted he sent an email to Fry on April 18th, and verified his
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3 Riley also produced a read-receipt of the April 17th “RE: Default Notice
Letter,” which reflected “it was read/opened by someone with access to
Elbayoumy’s email address on June 1, 2020[.]” Trial Ct. Op. at 5, citing N.T.,
9/30/21, at 41-42.
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email address was mohamed250001@hotmail.com. Id. at 8. Riley
summarized that Elbayoumy’s reply stated:
[H]e was not sure what [Appellee] expected him to do because
[Appellant] was not open for business, had no income, and had
“lost everything.” [N.T. 9/30/21 at 46-47.] He also claimed . . .
he should be entitled to a discount for March and April rent. . . .
Id. at 5 (some record citations omitted). Meanwhile, Fry informed Appellee’s
representatives she had conversations about unpaid rent with Elbayoumy,
who at times became “angry” or “aggressive.” Id. at 4, 6. At trial, Elbayoumy
denied he was aggressive. Id. at 8.
With respect to Appellant’s conversion claim, we review the following.
Riley testified that on June 18, 2020 (two months after the default notice),
she emailed Elbayoumy, informing him: (1) Appellant “would not be allowed
to return to its space and that the locks had been changed[;]” (2) Appellee
would pack “anything in the store that does not belong to the mall” and
schedule time the following week for Elbayoumy to pick it up at the security
office; and (3) he could contact the mall office with any questions. 4 Trial Ct.
Op. at 6 (record citations omitted).
Riley later helped box up Elbayoumy’s/[Appellant’s]
belongings and they were placed in the security office. [N.T.,
9/30/21, at 41, 77. Riley was] aware that Elbayoumy called
someone associated with [the] Mall seeking . . . the return of some
specific items including a cell phone and other personal property.
____________________________________________
4 In this same email, Riley stated the rent arrears were now $34,166.63, and
noted that “multiple” attempts by her, Fry, and another person “to set up a
repayment plan [with Elbayoumy] had been unsuccessful.” Trial Ct. Op. at 6.
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[Id. at 44.] Riley recalled that those items were then gathered
up and brought back to the mall offices. [Id.]
Trial Ct. Op. at 6. Riley was later informed “by the head security officer that
[E]lbayoumy picked up the boxed items.” Id. at 7. Riley was not aware of
any additional list, email, or letter from Elbayoumy concerning restaurant
equipment he believed he was entitled to. Id. at 6.
Elbayoumy denied he received this June 18, 2020, email from Riley, and
indeed that he ever “had any contact with Riley at any time[.]” Trial Ct. Op.
at 9, citing N.T., 8/30/21, at 37. Instead, Elbayoumy testified, he emailed Fry
(the prior property manager) and “repeatedly called the mall” concerning the
status of the mall’s reopening, but received no response. Trial Ct. Op. at 8,
citing N.T., 8/30/21, at 20-21. He learned the mall would reopen on June
19th, and “kept calling so he could ready his store[,] but was told by security
they would not allow him in his store.” Trial Ct. Op. at 8, citing N.T., 8/30/21,
at 23.
Additionally, Elbayoumy testified that on June 18, 2020 (the same day
as Riley’s email), he emailed Appellee’s representative, Sharon Edwards,
stating, inter alia,
he had observed people in his store on his store security camera.
[N.T., 8/30/21, at 25.] He claimed that he had not been informed
. . . there was a new tenant on the premises. He [stated] the new
tenant, Pizza Anela, which was owned by [his] former . . .
employee, was using his restaurant equipment.
Elbayoumy returned to the property on the day the mall
reopened (June 19, 2020) in order to open his business but . . .
the locks had been changed. [N.T., 8/30/21, at 38-39.]
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Elbayoumy testified that he was never informed why he was
locked out and never informed about a new tenant replacing
[Appellant.]
Trial Ct. Op. at 8-9 (some record citations omitted).
Elbayoumy also
broadly claimed that he was never allowed to retrieve his . . .
restaurant equipment and personal items. [N.T. 8/30/21 at 26.]
He agreed, however, that he never returned to his store after . . .
he tried to reopen it on June 19, 2020, . . . never contacted . . .
Mall representatives . . . to get his property back from his shop
and . . . never provided . . . any list of any items he sought to
retrieve. [Id. at 37-38, 40. Elbayoumy] also testified that he
never contacted the new tenant (his former employee) . . . to
inquire about his restaurant equipment. [Id. at 40-41, 52.] He
claimed that he never sought to retrieve his store equipment and
property because he believed he would be going back and opening
his business and had no idea why he was not allowed there. [Id.
at 38.]
Trial Ct. Op. at 9.
With respect to the value of the restaurant equipment, Elbayoumy
testified he purchased most of it from the prior tenant on May 20, 2016, the
date Appellant commenced its tenancy. Trial Ct. Op. at 9-10, citing N.T.,
8/30/21, at 9-10. Appellant produced a bill of sale for $25,000, for equipment
including “a pizza oven, mixer, slicer, walk-in freezer, walk-in cooler, pizza
table, steam table, ice machine, sink, tables and pizza tools.” Trial Ct. Op. at
10. Elbayoumy testified he later bought additional restaurant equipment for
$12,214.60 and $7,900, respectively, although he acknowledged on the
second day of trial some of these figures were mistaken, and requested the
court to consider the corrected figures. Id.
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Even though he allegedly paid approximately $46,000 for his
restaurant equipment (less the items he later agreed should be
excluded), Elbayoumy claimed the value was much higher
because he had purchased the items at discount. [N.T., 8/30/21,
at 28.] Elbayoumy testified that it would cost him about $80,000
to buy used replacement restaurant equipment[. Id. at 32.] He
later admitted, however, that he had no idea the value he could
expect to obtain if he were to sell the original restaurant
equipment (bought for $25,000). [Id. at 36.]
Trial Ct. Op. at 10. Finally, Elbayoumy testified the leftover frozen food items,
which he valued at $10,000, were “still good and usable by the new tenant.”
Id. at 10. However, “he admitted he had not itemized them nor had any
invoices reflecting their cost or existence.” Id.
Appellee presented the testimony of Donald Barlup, who had been in
the business of buying and selling restaurant equipment for 38 years. Trial
Ct. Op. at 10. Barlup had sold, at Elbayoumy’s request, some of its equipment
on consignment. Barlup
offered his opinion as to the value of individual items of
equipment[, and] calculated the total value of all items identified
to be $18,830.60.[ ] [N.T., 9/30/21, at 81-88.] Barlup declined
to provide an opinion as to the value of the [Appellant’s] point-of-
sale system, air conditioner, and paper products or foods, because
he did not deal in those items. [Id. at 89.]
Trial Ct. Op. at 11.
As stated above, the testimony was taken on August 30 and September
30, 2021. The trial court directed both parties to file proposed findings of fact
and conclusions of law, and they complied.
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III. Initial Verdict & Post Trial Motions
On February 3, 2022, the trial court issued an initial verdict. It: (1)
found Appellant defaulted under the terms of the lease for nonpayment of
rent, and accordingly awarded Appellee $31,652.62 for rent due; and (2)
found Appellee improperly converted some of Appellant’s equipment, and
awarded Appellant $17,239.63. Order, 2/3/22, at 1-2 (unpaginated). We
note the court did not award accelerated rent to Appellee. Additionally, the
court denied counsel fees to either party, reasoning they both prevailed on
their claims.5 Id. at 2.
Both parties filed post-trial motions. On July 21, 2020, the trial court
issued two orders — the first of which denied Appellant any relief. The second
order granted relief to Appellee. It continued to award it $31,652.62 for
unpaid rent, and additionally awarded accelerated rent on the balance of the
lease, in the amount of $212,500, along with prejudgment interest. The court
also reversed its verdict on Appellant’s claim of conversion, now awarding it
no damages or relief. Finally, the court awarded Appellee attorneys’ fees and
costs in the amount of $33,450.78. Order, 7/21/22, at 1-2 (unpaginated).
____________________________________________
5 On February 15, 2022, the trial court issued an “Amended Order and
Verdict,” which set forth the same findings and judgment, but further noted
the two parties’ actions had been consolidated.
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Appellant filed a timely notice of appeal and complied with the trial
court’s order to file a Pa.R.A.P. 1925(b) statement of errors complained of on
appeal.
IV. Statement of Questions Involved
Appellant presents the following six issues for our review:6
1. Whether the Trial Court erred as a matter of law and/or abused
its discretion in its Order dated July 21, 2022 by awarding no
damages to [Appellant] when such a decision is against the weight
of the evidence, such evidence showing that the restaurant
equipment, ingredients, food stock, or inventory had some
value?[ ]
2. Whether the Trial Court erred as a matter of law and/or abused
its discretion in accepting the testimony of Mr. Barlup as to the
value of the converted property when he was not admitted as an
expert in restaurant equipment valuations nor intimately familiar
with all of the items and equipment located at the leased Property?
3. Whether the Trial Court erred as a matter of law and/or abused
its discretion by failing to consider [Appellee’s] egregious and
unconstitutional use of distraint to justify the conversion of
personal property?
4. Whether the Trial Court erred as a matter of law and/or abused
its discretion by failing to consider the value of the security deposit
of $3,334.34 or applying it to the judgment?
5. Whether the Trial Court erred as a matter of law and/or abused
its discretion by awarding accelerated rent when the Mall took
clear possession, and re-leased the space immediately after taking
possession from [Appellant]?
6. Whether the Trial Court erred as a matter of law and/or abused
its discretion in its by awarding the Mall attorney’s fees and costs?
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6 We have reordered the issues for ease of review.
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Appellant’s Brief at 3-4.
V. Standard of Review
At this juncture, we note the relevant standards of review:
Our appellate role in cases arising from non[-]jury trial verdicts is
to determine whether the findings of the trial court are supported
by competent evidence and whether the trial court committed
error in any application of the law. The findings of fact of the trial
judge must be given the same weight and effect on appeal as the
verdict of the jury. We consider the evidence in a light most
favorable to the verdict winner. We will reverse the trial court
only if its findings of fact are not supported by competent evidence
in the record or if its findings are premised on an error of law.
However, [where] the issue . . . concerns a question of law, our
scope of review is plenary.
The trial court’s conclusions of law on appeal originating from a
non-jury trial are not binding on an appellate court because it is
the appellate court’s duty to determine if the trial court correctly
applied the law to the facts of the case.
[Moreover, t]he trial court, as the finder of fact, is free to believe
all, part or none of the evidence presented. Issues of credibility
and conflicts in evidence are for the trial court to resolve; this
Court is not permitted to reexamine the weight and credibility
determination or substitute our judgment for that of the fact
finder.
Davis v. Borough of Montrose, 194 A.3d 597, 605 (Pa. Super. 2018)
(citation omitted). Furthermore,
[w]e review a trial court’s ruling on a post-trial motion challenging
the weight of the evidence for an abuse of discretion. A party is
entitled to a new trial based on the “weight of the evidence where
the verdict is so contrary to the evidence it shocks one’s sense of
justice. [A party] is not entitled to a new trial where the evidence
is conflicting and the finder of fact could have decided either way.”
Brown v. Halpern, 202 A.3d 687, 703 (Pa. Super. 2019) (citations omitted).
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VI. Conversion of Restaurant Equipment
First, Appellant challenges the trial court’s finding that no conversion
occurred because it (Appellant) did not demand return of the contested
restaurant equipment.7 Appellant maintains that on June 24, 2020 — within
days of Appellee’s email to Appellant that it was now locked out8 — Appellant’s
counsel sent a letter to Appellee demanding access to the property so that
Elbayoumy could recover personal and business property. Appellant’s Brief at
14-15. Appellant concludes the denial of damages, for conversion, was
against the weight of the evidence. Id. at 14. For the following reasons, we
reverse the trial court’s verdict on the conversion claim and remand for further
proceedings.
This Court has explained:
Conversion is defined as the deprivation of another’s right of
property in, or use or possession of, a chattel, or other
interference therewith, without the owner’s consent and without
lawful justification. When such an act occurs, the plaintiff may
bring suit if he had an immediate right to possession of the chattel
at the time it was converted.
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7 We reiterate the trial court initially found Appellee converted Appellant’s
property and awarded Appellant $17,239.63 in damages. However, the court
reversed on post-trial motions, finding Appellant failed to prove any
conversion. Trial Ct. Op. at 14.
8 Appellant characterized this email from Appellee — that it had changed
Appellant’s locks — as sent on June 14, 2020. Appellant’s Brief at 14.
However, Riley testified she sent the email on June 18th. N.T., 9/30/21, at
42.
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Spector Gadon & Rosen, P.C. v. Rudinski, Orso & Lynch, 231 A.3d 923,
925 (Pa. Super. 2020) (citation omitted). Conversion may be committed by:
(a) Acquiring possession of the goods, with an intent to assert a
right to them which is in fact adverse to that of the owner[;] (b)
Transferring the goods in a manner which deprives the owner of
control[;] (c) Unreasonably withholding possession from one who
has the right to it[; or] (d) Seriously damaging or misusing the
chattel in defiance of the owner’s rights. Prosser, Torts, § 15 (2d
ed. 1955).
Norriton E. Realty Corp. v. Cent.-Penn Nat’l Bank, 254 A.2d 637, 638
(Pa. 1969) (quotation marks omitted).
With respect to a tenant’s property that remains on leased premises,
this Court has stated:
As a general rule, a tenant does not forfeit or lose title to his
personal property by neglecting to remove it from the leased
premises after the termination of the lease. This is so even if the
tenant fails to remove his personalty within a reasonable time
after the expiration of the lease. 49 Am.Jur.2d, Landlord and
Tenant, § 1014. Any retention, use or disposal of the tenant’s
property by the landlord, or any other exercise of dominion over
it to the exclusion of the rights of the tenant, constitutes a
conversion of the tenant’s property by the landlord. Id. . . .
Bednar v. Marino, 646 A.2d 573, 577-78 (Pa. Super. 1994). “It is well-
established that a lessor cannot infer abandonment of a lessee’s personal
property that remains at the leased premises following the tenant’s
departure.” Hoyt v. Christoforou, 692 A.2d 217, 222 (Pa. Super. 1997)
(citing above passage in Bednar).
We further consider: “Although the exercise of control over the chattel
must be intentional, the tort of conversion does not rest on proof of specific
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intent to commit a wrong.” McKeeman v. Corestates Bank, N.A., 751 A.2d
655, 659 n.3 (Pa. Super. 2000), citing Norriton East Realty Corp., 254 A.2d
at 638.
Finally, we note:
[C]ontract interpretation is a question of law, [and] this Court is
not bound by the trial court’s interpretation. Our standard of
review . . . is de novo and to the extent necessary, the scope of
our review is plenary as the appellate court may review the entire
record in making its decision. However, we are bound by the trial
court’s credibility determinations.
Ruby v. Abington Mem’l Hosp., 50 A.3d 128, 132 (Pa. Super. 2012)
(citation omitted).
We now review the trial court’s reasoning for finding Appellant failed to
establish conversion. The court relied on the following statement in Norriton
E. Realty Corp.:
“A defendant who has come rightfully into possession in the
first instance, as for example by a bailment, becomes a converter
when he refuses to deliver on demand. Since there has been no
wrongful taking or disposal of the property, demand and refusal
are necessary to complete the tort.”
Norriton E. Realty Corp., 254 A.2d at 63915 (emphasis added); see Trial
Ct. Op. at. The trial court extrapolated that when a party rightfully comes to
possess property, the other party, who is claiming conversion, must show
there was a demand for the return of property and then a refusal. See Trial
Ct. Op. at 15.
The trial court then considered a provision in the parties’ lease, that in
the event of Appellant’s default, Appellee could “peaceably reenter and
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recover possession of the Premises and occupy or permit the occupancy
of the whole or any part thereof.” Lease Agreement, 5/20/16 (Lease) at §
13.02(a)(ii) (emphasis added); see Trial Ct. Op. at 15. The court interpreted
the term, “the Premises,” in the above provision, to “includ[e] the restaurant
equipment and other personal items[.]” Id. Thus, the court reasoned: (1)
because Appellant defaulted on the lease, Appellee rightfully came into
possession of not only the leased space but also the restaurant equipment;
and (2) to establish conversion pursuant to the above statement in Norriton
E. Realty Corp., Appellant was required to show it demanded return of the
property and Appellee subsequently refused. Id. at 15-16.
First, we agree that under the lease terms, if Appellant defaulted,
Appellee had the right to “reenter and recover possession of the Premises.”
See Lease at § 13.02(a)(ii) (emphasis added). However, we disagree with
the trial court’s interpretation that the phrase, “the Premises,” included
restaurant equipment, inventory, and other business or personal property.
We note the lease did not include any definitions section. However, the lease’s
first paragraph refers to the term, the “Premises,” as follows: Appellee was
leasing to Appellant “approximately [779] square feet of ground floor area
(the ‘Premises’).” Lease at § 1.01 (emphasis added). There was no mention
the “Premises” would include restaurant equipment or other property located
within the leased space, and certainly not property acquired by Appellant
following the commencement of the lease. Thus, we construe the term the
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“Premises” to mean only the 779 square feet of empty space, exclusive of
any restaurant equipment, or business or personal property. See Ruby, 50
A.3d at 132 (this Court is not bound by trial court’s interpretation of a
contract). Accordingly, we disagree with the trial court’s finding that Appellee
came to rightfully possess the restaurant equipment.
Nevertheless, we next consider whether the trial court erred in
concluding Appellant’s failure to demand return of the restaurant equipment
thwarted his claim of conversion. The court found: (1) Elbayoumy was not
credible in testifying “he was never allowed to retrieve” the restaurant
equipment and personal items; (2) Appellee had explicitly advised Appellant
everything would “be boxed up” and it would schedule time for Elbayoumy “to
retrieve items from its store [but he] never responded[;]” and (3) “Elbayoumy
offered no specific testimony or evidence . . . of any attempts . . . to retrieve
his restaurant equipment and other items[.]” Trial Ct. Op. at 16.
Appellant’s sole argument on appeal is that his counsel did send a
demand letter on June 24, 2020.9 Appellee points out, we note correctly, that
Appellant has not provided any citation to the place in the record where
evidence about this letter was presented. See Appellee’s Brief at 6. The list
of trial exhibits does not include such a letter. See N.T., 8/30/21, at 2; N.T.,
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9 We note Appellant does not argue, as we have determined above, that the
trial court erred in finding Appellee came to rightfully possess the restaurant
equipment. See Appellant’s Brief at 14-15.
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9/30/21, at 2. The trial court’s thorough, nine-page recitation of the trial
evidence did not refer to such a letter. See Trial Ct. Op. at 3-11.
Nevertheless, the case authority set forth above does not require
Appellant to have made a demand for the return of its property, where, again,
Appellee did not come to rightfully possess the property. Instead, all that is
required was Appellee’s exercise or dominion over the property to the
exclusion of Appellant’s rights. See Norriton E. Realty Corp., 254 A.2d at
638 (conversion may be committed by: (1) acquiring possession of the goods,
with intent to assert a right to them that is adverse to that of the owner; (2)
transferring the goods in a manner which deprives the owner of control; or
(3) unreasonably withholding possession from one who has the right to it);
Spector Gadon & Rosen, P.C., 231 A.3d at 925 (conversion is the
deprivation of another’s right to, use of, or possession of property, without
the owner’s consent and without lawful justification, and when such an act
occurs, the plaintiff may bring suit if he had an immediate right to possession);
McKeeman, 751 A.2d at 659 n.3 (“conversion does not rest on proof of
specific intent to commit a wrong.”).
Appellee did not claim at trial Appellant lost its rights to the restaurant
equipment. Instead, Appellee emphasized it offered to “box up” or pack
presumably smaller items, and Elbayoumy in fact retrieved these items, but
did not demand return of the restaurant equipment or any other larger
property. Nevertheless, we note Appellee’s June 18, 2020, email was sent
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while the mall was closed for the COVID-19 pandemic, and informed
Elbayoumy the locks had already been changed and Appellant was not
permitted to return to its space. See Trial Ct. Op. at 6, 9. Furthermore,
Elbayoumy gave undisputed testimony that by June 18th, he had “observed
people in his store on his security camera” and saw a former employee “using
his restaurant equipment.” See id. at 8-9.
The overall evidence, even if credited in Appellee’s favor, supported a
finding that Appellee deprived Appellant of its rights, use, or possession of its
restaurant equipment, inventory, and other personal and business property.
See Spector Gadon & Rosen, P.C., 231 A.3d at 925. Appellant’s mere
neglect to remove the restaurant equipment after termination of the lease,
even after “a reasonable time” had passed, did not result in forfeiture of the
property. See Bednar, 646 A.2d at 577-78. In light of all the foregoing, we
determine the trial court erred in denying relief and damages on Appellant’s
conversion claim. We thus reverse the judgment in favor of Appellee on the
conversion claim.
As to the proper amount of damages, we note the trial court’s initial
verdict awarded Appellant $17,239.63 “for the value of the converted
property.” Order, 2/3/22, at 2. There was no discussion, however, of what
items were converted nor their values. In the absence of any discussion of
how the court calculated this sum, we decline to simply reinstate this amount.
Instead, we remand for the trial court to: review the evidence and testimony
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presented at trial, along with the parties’ arguments; itemize the particular
kitchen equipment, inventory, food stock, business and personal property, and
any other items converted by Appellee; and determine the proper value of
each converted item.10 See Lynch v. Bridges & Co., Inc., 96, 678 A.2d
414, 416 (Pa. Super. 1996) (“The trial judge, siting as fact finder has broad
discretion to determine damages in conversion cases[;]” “[T]he fact-finder
may make a just and reasonable estimate of the damage based on relevant
data, and in such circumstances may act on probable and inferential, as well
as upon direct and positive, proof.”). The court may also consider the
relevance, if any, of the current use of the property — for example, whether
Appellee has conveyed to a new tenant the purported right to use or purchase
the property, or whether Appellee’s new lease with a tenant included use of
the converted restaurant equipment and if so, the added value thereof to
Appellee. The court may also consider, upon proper argument by the parties,
whether Appellant is entitled to, or desires, return of the property, and the
effect of such return on the amount of damages. Finally, the court may direct
the parties to file briefs, or conduct oral argument, or undertake other action
necessary to this determination.
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10 The trial court may also consider whether non-movable fixtures were
converted. See N.T., 9/30/21, at 81 (testimony of Barlup that the kitchen
hood is “attached to the wall”). We offer no opinion on this question.
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VII. Value of Alleged Converted Property
In its second issue, Appellant challenges the weight of the testimony of
Appellee’s witness, Barlup, as to the value of the restaurant equipment
allegedly converted by Appellee. Appellant’s Brief at 9. Appellant points out
that while the trial court and Appellee’s counsel made a brief reference to the
possibility of Barlup testifying as an expert,11 Appellee did not, in fact, present
Barlup as an expert. Id. at 11-12, citing N.T., 9/30/21, at 77 (discussed
infra). Nevertheless, Appellant contends, the trial court improperly
“elevated” Barlup’s testimony to that of an expert, and he (Appellant) was
“unfair[ly] surprise[d]” by this expert testimony. Appellant’s Brief at 9, 13.
In light of our remand for the trial court to weigh all the trial evidence
presented and determine the proper amount of damages for conversion, we
conclude no further review of this issue is necessary. See Printed Image of
York, Inc. v. Mifflin Press, Ltd., 133 A.3d 55, 59 (Pa. Super. 2016) (“An
issue before a court is moot ‘when a determination is sought on a matter
____________________________________________
11 We note Barlup initially testified he sold some of Appellant’s equipment on
consignment, listing the sold items and correlating prices. N.T., 9/30/21, at
25-28. Appellant declined to conduct any cross-examination. Id. at 30. After
another witness testified, the trial court asked whether Barlup was still
available to testify, and Appellee’s counsel responded he was. Id. at 77. The
trial court then commented, “Wouldn’t he be an expert?,” and Appellee’s
counsel stated, “I believe he would be an expert.” Id. However, upon
recalling Barlup to testify, Appellee again did not present him as an expert
witness. Id. at 79.
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which, when rendered, cannot have any practical effect on the existing
controversy.’”) (citation omitted).
VIII. Distraint of Property
Next, Appellant contends Appellee “previously” argued it was “allowed
to distrain [Appellant’s] property based on 68 P.S. § 250.302” of the Landlord
and Tenant Act of 1951.12 Appellant’s Brief at 15. Appellant points out,
however, this statute was found unconstitutional in Smith v. Coyne, 722 A.2d
1022 (Pa. 1999), and thus argues the trial court erred in “failing to consider
[Appellee’] egregious and unconstitutional use of distraint to justify the
conversion of personal property.” Appellant’s Brief at 15.
Appellee responds Appellant has “not in any way explain[ed] how any
alleged exercise of distraint . . . informed the Trial Court’s overall adjustment
of the parties’ respective financial positions.” Appellee’s Brief at 7. We agree.
Appellant does not provide any explanation for Appellee’s “previous[ ]”
reliance on distraint and, saliently, does not explain when or how the trial
court ruled or granted relief on the theory of distraint. See Appellant’s Brief
at 15-16. Our review of the trial court’s opinion reveals no mention of it.
____________________________________________
12 68 P.S. §§ 250.101-250.602. See 68 P.S. § 250.302 (“A landlord or such
agent may also, in the manner above provided, distrain personal property
located on the premises but only that belonging to the tenant, for arrears of
rent due on any lease which has ended and terminated, if such distress is
made during the continuance of the landlord’s title or interest in the
property.”).
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Instead, the trial court reviewed in detail the issue of conversion. See Trial
Ct. Op. at 14-18. In the absence of any discussion by Appellant of when or
how the trial court considered distraint, much less granted relief on it, we
conclude this vague claim does not merit relief. See Pa.R.A.P. 2119(a)
(argument shall include “such discussion and citation of authorities as are
deemed pertinent”).
IX. Denial of Return of Security Deposit
In its fourth issue, Appellant asserts the trial court erred in failing to
award the return of its security deposit, in the amount of $3,334.34. The trial
court suggests this issue is waived, for Appellant’s failure to present any
evidence at trial, and raising it for the first time in the post-trial motion. Trial
Ct. Op. at 19. Appellant responds the issue was not waived because the lease,
“which speaks for itself,” was presented as an exhibit at trial, and counsel’s
opening statement stated it was seeking return of the security deposit.
Appellant’s Brief at 16-17. We agree this issue is waived.
First, we note the lease: was printed in small type; spanned 20 pages
(excluding the signature pages); was apportioned into 20 major articles, each
further divided with subheadings; and comprised at least 137 paragraphs. We
disagree with Appellant’s contention, which is not supported by citation to any
law, that the mere presentation of this particular, lengthy lease at trial
encompassed an actionable claim for the return of its security deposit. See
Appellant’s Brief at 17. Appellant’s reliance on in its opening statement
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does not cure its failure to present evidence on this issue.13 Accordingly, the
issue is waived and no relief is due. See Pa.R.A.P. 302(a) (“Issues not raised
in the trial court are waived and cannot be raised for the first time on
appeal.”); Gustine Uniontown Assocs., Ltd. v. Anthony Crane Rental,
Inc., 892 A.2d 830, 835 (Pa. Super. 2006) (“The appellate rules direct that
an issue must be raised in the trial court in order to provide that court with
the opportunity to consider the issue, rule upon it correctly, and obviate the
need for appeal.”).
X. Award of Accelerated Rent to Appellee
In its fifth issue, Appellant avers the trial court erred in awarding
Appellee accelerated rent in the amount of $212,500. Appellant maintains
that because Appellee took repossession of the premises, the accelerated rent
award resulted in an improper double recovery. Appellant’s Brief at 18.
In its opinion, the trial court agrees it was an improper double
recovery.14 Trial Ct. Op. at 20-21, citing Ferrick v. Bianchini, 69 A.3d 642,
____________________________________________
13 Appellant’s opening statement, spanning three pages, was relatively brief.
The sole reference to the security deposit was in sum: “[Appellant is] seeking
damages in the amount of $80,000 for . . . all the equipment [it] has, plus
$10,000 for the disposed food that was frozen and was still good which [it]
never got back, plus the unreturned security deposit of [$3,333.34],
and the cost of this action, attorney’s fees, and other such relief as the Court
may deem reasonable.” N.T., 8/30/21, at 6 (emphasis added).
14 On appeal, Appellee acknowledges that in a confession for judgment, “a
landlord may not both confess judgment for possession and seek accelerated
rent.” Appellee’s Brief at 9. However, it argues, if a “full trial” has been
(Footnote Continued Next Page)
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656 (Pa. Super. 2013) (“If the landlord terminates the lease and evicts the
tenant before the acceleration clause is enforced, the landlord cannot recover
rent for the post-eviction period.”); Homart Dev. Co. v. Sgrenci, 662 A.2d
1092, 1100 (Pa. Super. 1995) (en banc) (landlord may cumulate remedies
provided in the lease, but he may not avail himself of double remedies; he
can eject the tenant and enter judgment for the rent accrued when the tenant
was evicted, but cannot recover both the possession and the rent for the
balance of the term). We reverse the court’s verdict on this issue on other
grounds — that Appellee waived its claim for failure to pursue it at trial.
We note Appellee’s complaint: (1) averred that under Section 13.02(f)
of the lease, it was entitled to accelerate future rent payments; and (2)
demanded $207,500 for accelerated rent for the entire unexpired balance of
the lease term.15 Appellee’s Complaint, 7/14/20, at 3-4. At trial, however,
____________________________________________
conducted, a landlord may take both possession and accelerated rent,
provided the latter is subject to credit for any rent received from a successor
tenant. Id. Appellee then contends that here: (1) Appellant failed to present
evidence of “what, if any, rent had been received by Appellee[ ] following” the
repossession; (2) “[t]his was a failure of Appellant[ ] to develop a mitigating
defense[;]” and (3) the award of accelerated rent should be affirmed. See
id. at 9-10. In light of our disposition, we do not reach the merits of the trial
court’s or the parties’ arguments on appeal.
15 Subsection 13.02(f) of the lease provides that upon default by Appellant,
Appellee “shall have the right to accelerate the whole or any part of the [rent]
for the entire unexpired balance of the Lease Term[.]” Lease at § 13.02(f).
Furthermore, Subsection 13.02(b) provides that upon Appellant’s default,
Appellant “shall be liable for . . . all rent through the remainder of the Lease
Term[.]” Lease at § 13.02(b).
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neither the parties nor the trial court addressed the lease provisions regarding
rent acceleration. Saliently, Appellee presented no argument or evidence
regarding accelerated rent, such as the number of months remaining on the
lease term or a calculation of the total amount that would have been due.16
Although Appellee’s post-trial proposed findings of fact and conclusions of
law sought accelerated rent of $212,500, its sole evidentiary support was
Appellant’s trial Exhibit 1 — which was the lease itself — and its own Exhibit
3 (entitled “Pizza Zone Reconciliation”).17 Appellee’s Proposed Findings of Fact
& Conclusions of Law, 11/1/21, at 10. However, at trial, Appellee’s own
counsel accurately described Exhibit 3 as a spreadsheet listing the late or
unpaid rent amounts between January 1, 2018, and of April 1, 2020 — which
we note was $31,652.62. See N.T., 9/30/21, at 34-35; Appellee’s Exhibit 3.
The exhibit makes no mention of the future rent that would be due thereafter,
____________________________________________
16 We note there was one reference at trial to “accelerated rent,” but it was
made by the trial court and appeared to be a misstatement. The court
addressed Riley during her testimony: “Did you find any person named Mike
that would have had the authority to . . . tell the [Elbabyoumy] that he didn't
have to pay the accelerated rate?” See N.T., 9/30/21, at 40 (emphasis
added). However, the surrounding questions and responses concerned about
the increase of the rent amount, from $1,666.67 to $2,500 as of July of 2018.
See id. at 37-41; see also id. at 41 (trial court asking whether “Mike Kohan
[had] the authority to tell [Elbayoumy about] his rent escalation”). There
was no discussion about the amount of post-breach rent due or accelerated
rent.
17 See N.T., 9/30/21, at 3 (Index to Exhibits).
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over the remaining, unexpired lease term. Nothing in the exhibit supported
Appellee’s claim for $212,500 in accelerated rent.
We thus conclude that in the absence of any evidence or argument
presented at trial in support of its claim for accelerated rent, the trial court
erred in awarding accelerated rent to Appellee. Accordingly, we reverse this
award.
XI. Award of Attorneys’ Fees to Appellee
In Appellant’s sixth and final issue, it avers the trial court erred in
awarding Appellee attorneys’ fees and costs in the amount of $33,450.78.
Appellant’s sole supporting argument is that Appellee did not admit evidence
of its attorneys fees into the record at trial.18 Appellant’s Brief at 18.
In its initial verdict, which found in favor of Appellee on unpaid rent but
in favor of Appellant on conversion, the trial court denied both parties
attorneys’ fees on the ground “each party prevailed on their claim.” Order,
2/3/22. In support of its amended verdict which did award attorneys’ fees to
Appellee, the trial court cited the lease provision that a “prevailing party in . .
. litigation shall be entitled to recover its reasonable attorney’s fees . . . from
the other party.” Trial Ct. Op. at 21.
____________________________________________
18 In its opinion, the trial court noted Appellee asserted “[i]n its Proposed
Findings of fact and Conclusions of Law” that it incurred $15,795 in attorneys’
fees, $16,900 in “additional fees,” and $755.78 “in out-of-pocket costs.” Trial
Ct. Op. at 21.
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As both this Court and the trial court have now determined Appellant is
entitled to relief on the accelerated rent claim, and this Court has further
reversed the denial of relief to Appellant on its conversion claim, we hereby
vacate the award of attorneys’ fees to Appellee. On remand, the trial court
shall consider anew whether each party is entitled to attorneys’ fees, in
conjunction with the other issues remanded for further review.
XII. Conclusion
In sum, we: (1) reverse the judgment in favor of Appellee on Appellant’s
claim of conversion, and remand for the trial court to determine the proper
amount of damages in favor of Appellant; (2) reverse the $244,152.62 award
of accelerated rent to Appellee, on the ground Appellee failed to present any
relevant evidence or argument at trial; (3) vacate the $33,450.78 award of
attorneys’ fees to Appellee, and remand for reconsideration of whether either
party is entitled to attorneys’ fees, and if so, in what amounts; and (4) deny
relief on Appellant’s remaining issues. Accordingly, we vacate the judgment
in part, reverse in part, affirm in part, and remand for further proceedings
consistent with this memorandum.
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Judgment vacated in part, reversed in part, and affirmed in part. Case
remanded for further proceedings. Jurisdiction relinquished.
Judgment Entered.
Joseph D. Seletyn, Esq.
Prothonotary
Date: 8/15/2023
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