Francis v. LCP N. Third, LLC

• Decision Date: 30 January 2023
• Docket Number: 665 EDA 2022,666 EDA 2022,J-A21009-22
• Parties: JAMES M. FRANCIS v. LCP NORTH THIRD, LLC Appellant JAMES M. FRANCIS v. LCP NORTH THIRD, LLC Appellant
• Court: Pennsylvania Superior Court

JAMES M. FRANCIS v. LCP NORTH THIRD, LLC Appellant JAMES M. FRANCIS v. LCP NORTH THIRD, LLC Appellant

Nos. 665 EDA 2022, 666 EDA 2022

No. J-A21009-22

Superior Court of Pennsylvania

January 30, 2023

NON-PRECEDENTIAL DECISION - SEE SUPERIOR COURT I.O.P. 65.37

Appeal from the Order Entered January 31, 2022 In the Court of Common Pleas of Philadelphia County Civil Division at No(s) 180702329

BEFORE: LAZARUS, J., MURRAY, J., and McCAFFERY, J.

MEMORANDUM

LAZARUS, J.

LCP North Third, LLC (LCP) appeals from the judgment,^[1] entered in the Court of Common Pleas of Philadelphia County, following a non-jury trial. On appeal, LCP challenges the trial court's denial of its post-trial motion for judgment notwithstanding the verdict (JNOV) and a new trial, and the award of attorneys' fees to Appellee James M. Francis. After review, we affirm.

The gravamen of this complaint involves the Second Omnibus Amendment^[2] of a Settlement Agreement (Second Amendment) between LCP and Francis. LCP, managed by Alan Leavitt, is a corporation that administers partnerships and purchases loans. Pursuant to the Second Amendment, LCP extended an option to Francis for the purchase of property located at 115-17 North Third Street, Philadelphia, Pennsylvania 19106 (Property). The issue on appeal involves whether LCP stalled in completing construction at the Property with the intention of defeating Francis' ability to exercise his purchase option? For context, Francis, through an entity titled One North Third (ONT),^[3]purchased the Property in 2004. N.T. Trial, 9/20/21, at 32. Following ONT's default on two construction loans, LCP purchased loan documents related to the Property and the Property was listed for judicial sale. Id. at 38, 43-45; id., 9/21/21, at 78. Thereafter, Francis, on behalf of ONT, and LCP entered into a Settlement Agreement,^[4] pursuant to which Francis would complete work at the Property, Francis would make monthly rent payments to LCP, Francis had an option to purchase the Property which could be executed any time after Property was transferred to another party at sheriff's sale^[5] and prior to February 17, 2019, and LCP would purchase the Property at sheriff's sale- which it later did.^[6] Id., 9/20/21, at 47; id., 9/22/21, at 153.

The following two events prompted discussions regarding an amendment to the Settlement Agreement. First, on April 21, 2017, the Department of License and Inspection (L&I) of the City of Philadelphia issued a stop-work order on the Property because, inter alia, the sprinkler and fire suppression systems were not certified. Id., 9/20/21, at 54.^[7] Francis testified that following a dispute between him and Benjamin Magness, the plumber and sprinkler system contractor, Magness refused to return to the project to certify his work. Id. at 51, 91. Second, Francis had defaulted on monthly rent payments to LCP. On November 30, 2017, LCP notified Francis that he owed $20,500.00 in rent to LCP and, thus, was in default under the Settlement Agreement. Id., 9/22/21, at 155; see Exhibit D-30 (e-mail notification of default to Francis).

Following these events, LCP and Francis discussed an amendment to the Settlement Agreement, pursuant to which LCP would manage construction at the Property. Francis testified that "[LCP] said that [its] people knew [] Magness" and "since [LCP's] people are familiar with [] Magness, [LCP and I] came to an arrangement that [LCP] would finish the project[.]" Id. at 85. Francis and LCP also discussed the need for LCP to obtain a certificate of occupancy (CO). N.T. Trial, 9/20/21, at 97. Francis testified that LCP "balked" at the need to obtain a CO and Francis conceded that he was prepared to purchase the Property when it was "substantially complete." Id.

The parties executed the Second Amendment on February 14, 2018. Exhibit P-46. Pursuant to the Second Amendment, LCP would complete construction of the Property, Francis would provide LCP with contact information for the contractors and consultants working on the Property,^[8] and Francis had either 90 days from the date LCP received the CO for the Property, or, until June 30, 2018, whichever occurred first, to either exercise or assign his option. Id., 9/20/21, 132; see also Exhibit P-3 (Second Amendment).

Leavitt testified that LCP did not bind itself to substantially complete the property. N.T. Trial, 9/23/21, at 35 (Leavitt testifying, "We said we would diligently work, but we knew there was a stop[-]work order there. We knew the first order of business was getting it removed."); id. at 34 (Leavitt testifying, "We expected that we would be able to get the project back on track, at least get the sprinkler [] guys, fire suppression guys back in based on our relationship."); id. at 34-35 (Leavitt testifying, "[Y]ou can't say you'll get a CO unless you know what was in the walls. We were not there. We made it very clear we weren't going to commit to it.").

Leavitt also testified regarding construction at the Property. The property needed a new roof, which could not be completed until there were appropriate weather conditions. Id. at 44-45; id., 9/21/21, at 173 (Leavitt testifying, "We had a foot of water in the building leaking from the roof and the building department would only let one contractor in at a time, so it had to be the roofer first."). Leavitt also testified, "The only work we did was work that was permitted by the building department, L&I [], and it was almost all related to the sprinkler." Id. at 156.

On June 29, 2018, Francis exercised his option and scheduled closing for July 26, 2018. Id., 9/22/21, at 171. LCP sent Francis an updated option price calculation,^[9] which indicated that as of July 10, 2018, the total amount of money Leavitt spent on construction, including pending liabilities, was $86,520.00^[10] Id., 9/20/21, at 185-86. On July 20, 2018, Francis received a City of Philadelphia certification showing that the stop-work violations had not been removed. Id. at 182; see Exhibit P-66. LCP attended the scheduled closing and Francis did not. N.T. Trial, 9/23/21, at 54.

In July 2018, Francis sued LCP for breach of contract. On September 20, 2021, the case proceeded to a non-jury trial before the Honorable Leon Tucker. The trial court found that LCP breached its duty of good faith and fair dealing and awarded Francis $966,126.00 in damages. By separate order, the trial court awarded Francis $229,482.56 in attorneys' fees and costs. LCP's post-trial requests for JNOV and a new trial were denied. This timely appeal followed. Both the trial court and LCP have complied with Pa.R.A.P. 1925. LCP raises the following issues for review:

1. Whether the trial court erred in failing to grant LCP's request for JNOV where Francis failed to prove: (i) an express or implied contractual duty that required LCP to complete construction within a certain timeframe; (ii) that LCP breached any contractual duty in the face of undisputed evidence establishing that delays were caused by a "stop[-] work" order and/or weather and not by LCP's conduct; (iii) that Francis, as [the] purported non-breaching party, fulfilled his obligations under the contract by establishing that he was ready, willing[,] and able to "close" on the Property; and (iv) damages, in light of the undisputed valuation evidence and evidence regarding the staggering substantial construction costs that remained.

2. Whether the trial court erred in awarding attorneys' fees where [Francis] failed to prove all elements of his breach of contract claim, and thus, cannot properly be considered a "prevailing party" under the [parties] agreement?

3. Whether [Francis] erred in entering judgment in the amount of the verdict and attorneys' fee award after the attorneys' fee award had been separately entered by a different [o]rder and judgment on the award should not have been entered twice on the same award?

Appellant's Brief, at 18.

LCP first alleges that Francis failed to prove breach of contract and, thus, LCP is entitled to JNOV, or in the alternative, a new trial. When reviewing a motion for JNOV the evidence must be viewed in the light most favorable to the verdict winner, who must be given the benefit of every reasonable inference of fact. Fanning v. Davne, 795 A.2d 388, 392 (Pa. Super. 2002) (quotation omitted). Any conflict in the evidence must be resolved in the verdict winner's favor. Id. JVOV may be entered: (1) where the moving party is entitled to judgment as a matter of law, or (2) where the evidence was such that no two reasonable minds could disagree that the outcome should have been in favor of the moving party. Id. at 393.

On appeal of a trial court's denial of a motion for JNOV, our Court will reverse the trial court only upon a finding of an abuse of discretion or error of law that controlled the outcome of the case. Eichman v. McKeon, 824 A.2d 305, 311 (Pa. Super. 2003) (citation omitted). Additionally, where credibility and the weight to be accorded the evidence are at issue, the court will not substitute its judgment for that of the fact-finder. Id. at 311-12 (citation omitted).

The standard of review of a trial court's grant or denial of a motion for a new trial, is, generally, whether the trial court clearly and palpably abused its discretion or committed an error of law which controlled the outcome of the case. Stevenson v. General Motors Corp., 521 A.2d 413, 422 (Pa. 1987). To reverse the trial court, this Court must consider all the evidence in the light most favorable to the non-moving party and conclude that the verdict would be different if another trial were granted. Robertson v. Atlantic Richfield Petroleum Products Co., 537 A.2d 814 (Pa. Super. 1987).

LCP first argues that Francis did not prove breach of contract. "To...