Com. by Creamer v. Monumental Properties, Inc.

• Decision Date: 20 September 1976
• Citation: 365 A.2d 442,26 Pa.Cmwlth. 864
• Parties: COMMONWEALTH of Pennsylvania, By J. Shane CREAMER, Attorney General, Plaintiff, v. MONUMENTAL PROPERTIES, INC., et al., Defendants.
• Court: Pennsylvania Commonwealth Court

Page 442

365 A.2d 442

26 Pa.Cmwlth. 864

COMMONWEALTH of Pennsylvania, By J. Shane CREAMER, Attorney General, Plaintiff, v. MONUMENTAL PROPERTIES, INC., et al., Defendants.

Commonwealth Court of Pennsylvania.

Argued March 1, 1976.

Decided Sept. 20, 1976.

Allen C. Warshaw, Lawrence Silver, Robert P. Kane, Atty. Gen., Dept. of Justice, Harrisburg, for plaintiff.

Myron B. Markel, Pittsburgh, for Samuel Elkind Agency.

Rod J. Pera, Patricia F. Kemp, Harrisburg, for Property Management, Inc. and Monumental Properties, Inc. Joseph Klein, Harrisburg, for William H. Hollinger & Son.

Joseph A. Damico, Jr., Norman L. Haase, Fronefield, DeFuria & Petrikin, Media, for Harry B. Davis.

Walter H. Compton, Harrisburg, Sigmund H. Steinberg, Steinberg, Greenstein, Richman & Price, Philadelphia, for Samuel Elgart, Inc.

Lee Swartz, Harrisburg, for Capitol Housing Corp.

Milton S. Lazaroff, Philadelphia, for Devon-Strattford Co.

Irving L. Mazer and Spivack & Dranoff, Philadelphia, for Yeo & Lukens Co.

Patrick M. O'Donnell, Pittsburgh, for Pendale Towers, Inc.

Samuel Lander, Philadelphia, for John C. Clark Co.

Charles B. Zwally, John Havas, Harrisburg, Harry B. Yost, Lancaster, for C. Pat Riley and Robert E. Plank.

Thomas M. Kittredge, Philadelphia, for Media Real Estate Co.

Leonard M. Mendelson, Hollinshead & Mendelson, Edward D. Marks, Pittsburgh, for Washington Plaza, Inc.

John P. McKelligott, Obermayer, Rebmann, Maxwell & Hippel, Philadelphia, for Marks & Co.

Robert G. Sable, John P. Klee, Pittsburgh, for P. O. Naly Co.

G. W. Wilde, Pittsburgh, for J. J. Gumberg Co.

Samuel P. Kamin, Pittsburgh, for Spiro Realty Co.

Arnold R. Lieberman, Philadelphia, for Albert J. Kaytes.

Before BOWMAN, President Judge, and CRUMLISH, Jr., KRAMER, WILKINSON and BLATT, JJ.

OPINION

KRAMER, Judge.

This matter is before us yet another time and still on preliminary objections arising out of a complaint in equity filed by the Commonwealth against twenty-five landlords and four printers of form leases seeking injunctive relief from the use of form leases as more specifically alleged in the complaint to be violations of the Unfair Trade Practices and Consumer Protection Law (hereinafter Act), Act of December 17, 1968, P.L. 1224, As amended, 73 P.S. § 201-1 et seq. There is no need to set forth once again the basic history of this case inasmuch as it is adequately described in prior opinions. See Commonwealth v. Monumental Properties, Inc. (hereinafter Monumental I), 10 Pa.Cmwlth. 596, 314 A.2d 333 (1973), affirmed in part and reversed in part in Commonwealth v. Monumental Properties, Inc. (hereinafter Monumental II), 459 Pa. 450, 329 A.2d 812 (1974).

To provide some understanding for the present posture of this case and for this opinion, it is necessary to add that in Monumental I, supra, this Court dismissed the complaint against all defendants under our holding that leasing agreements do not come within the purview of the Act and, further, that the Commonwealth's complaint had failed to set forth a cause of action. In Monumental II our Supreme Court reversed us in part and we deem it necessary to review that opinion which provides some guidelines for the disposition of the issues presently before us. The prime holding of Monumental II reads as follows: 'We hold that the leasing of residences falls within the ambit of the Consumer Protection Law.' 459 Pa. at 467, 329 A.2d at 820. The Court stated that the Act is 'to be liberally construed', 459 Pa. at 466, 329 A.2d at 820; that the 'underlying foundation (of the Act) is fraud prevention', 459 Pa. at 459, 329 A.2d at 816; that the legislative mandate was to be broadly applied and that '(a)s part of the Law's object, fraudulent conduct that would mislead or confuse a consumer was banned', 459 Pa. at 467, 329 A.2d at 820. Additionally, the Court indicated: 'Rather the more natural inference is that the Legislature intended the Consumer Protection Law to be given a pragmatic reading--a reading consistent with modern day economic reality.' 459 Pa. at 470, 329 A.2d at 822; '(h)inging the remedies of the Consumer Protection Law on the passing of title simply fails to reflect fairly both modern economic conditions and, more importantly, the Legislature's intent.' 459 Pa. at 473, 329 A.2d at 823. The Court continued: 'we must realize further that most frequently today the average prospective tenant vis-a-vis the prospective landlord occupies a disadvantageous position', 459 Pa. at 475, 329 A.2d at 825, and quoted from Reitmeyer v. Sprecher, 431 Pa. 284, 289-290, 243 A.2d 395, 398: 'If our law is to keep in tune with our times we must recognize the present day inferior position of the average tenant vis-a-vis the landlord when it comes to negotiating a lease.' The Court agreed with the Commonwealth argument that 'this section (73 P.S. § 201-2(4)(xiii)) was designed to cover generally all unfair and deceptive acts or practices in the conduct of trade or commerce', 459 Pa. at 478, 329 A.2d at 826, and admonished this Court not to 'woodenly apply' principles of law.

In Monumental II the Court affirmed the holdings of this Court in at least two regards. First, 'that portion of its (Commonwealth Court) order dismissing the complaint with respect to the form sellers is also affirmed.' 459 Pa. at 487, 329 A.2d at 831. That holding by our Supreme Court effectively removes the form-seller defendants from this case and we need no longer pass upon any preliminary objections raised by the form-seller defendants. Secondly the Court stated: 'That portion of the order of the Commonwealth Court that dismissed the Commonwealth's complaint for failure to state a cause of action with respect to the use of 'unenforceable' lease provisions is affirmed', 459 Pa. at 487, 329 A.2d at 830. The Court agreed 'with the Commonwealth Court's analysis of the existing law, and of necessity with its conclusion that this allegation (that the use of lease provisions which are illegal, unconscionable and unconstitutional and hence unenforceable), as pleaded, failed to state a cause of action.' 459 Pa. at 483, 329 A.2d at 828. From a reading of the Court's opinion in Monumental II we conclude that the Court was referring to paragraphs 8 and 9 of the Commonwealth's complaint. Although we no longer need to pass upon the preliminary objections applicable to those paragraphs, which we necessarily will sustain, we will in the order permit the Commonwealth to amend its complaint.

With regard to this Court's holding in Monumental I on the prayer of the complaint the Supreme Court in Monumental II stated that any holding thereon is 'premature at this stage of the proceedings', 459 Pa. at 487, 329 A.2d at 830, and we of course follow the Court's direction.

According to our understanding of Monumental II, the Court remanded the matter in four particular areas: (1) those procedural preliminary objections which were not passed upon by this Court in Monumental I because of the result we reached; (2) those preliminary objections relating to the question whether the Commonwealth had an adequate remedy at law; (3) those preliminary objections pertaining to whether the Commonwealth had stated a cause of action by alleging that the failure to inform tenants in form leases of the existence of statutory tenants' remedies constituted an unfair misleading practice; an (4) those preliminary objections relating to whether the Commonwealth has stated a cause of action by alleging that the use of form leases with archaic and technical language beyond the easy comprehension of consumers of average intelligence constitutes unfair and misleading conduct under the Act. In categories (1) and (2) of the remanded matter, the defendant stated in the briefs and argument that they were abandoning their preliminary objections which we therefore overrule. With regard to category (3), immediately above, of the remanded matters, we stated in Monumental I that we could find no law which would require a landlord to notify a tenant of his rights under the Landlord and Tenant Act, 10 Pa.Cmwlth. at 616, 314 A.2d at 342. The Supreme Court in Monumental II stated that our assertion 'misperceives the issue' because the question is not whether there is a requirement to inform the tenants, but rather under the Act whether the failure to notify a tenant 'is misleading of confusing to the tenant as consumer of housing services.' 459 Pa. at 483, 329 A.2d at 829. To fully comply with Monumental II, it will be necessary to establish a record from which this Court may make findings of fact and conclusions of law to determine whether such failure to notify is a violation of the Act; we cannot rule as a matter of law that such failure is not a violation of the Act. While we respectfully accept the direction of our Supreme Court, we have assiduously researched the citations set forth in Monumental II and conclude that none of them support the proposition that the failure to inform a tenant of the existence of statutory tenant remedies constitutes an unfair or misleading practice under the Act or under the federal consumer fraud statutes cited. Lastly, with regard to category (4) immediately above) of the remanded matters, the opinion in Monumental II concluded: '(B) ecause the hearing court (Commonwealth Court) did not pass on whether the Commonwealth set forth a cause of action with respect to this claim (archaic and technical language beyond the easy comprehension of the consumer of average intelligence), we cannot say that no recovery is possible.' 459 Pa. at 482, 329 A.2d at 828. In its brief, the Commonwealth states that the defendants are quite correct in their observation that there is no case authority for the proposition that landlords are under an affirmative duty to use language in...