Hahalyak v. A. Frost, Inc.
| Decision Date | 29 September 1995 |
| Citation | 664 A.2d 545,444 Pa.Super. 494 |
| Parties | Michael HAHALYAK, Trustee of the Clark Building, Appellant, v. A. FROST, INC., U.S. Gold & Diamond Centers, Inc., and Donald Duffy, Appellees. A. FROST, INC., and U.S. Gold & Diamond Centers, Inc. v. Michael HAHALYAK, Trustee of the Clark Building, Appellant. |
| Court | Pennsylvania Superior Court |
Michael Hahalyak, Pittsburgh, in pro. per.
Gregory B. Jordan, Pittsburgh, for A. Frost, Inc.
Neal Brendel, Pittsburgh, for Duffy.
Before POPOVICH, FORD ELLIOTT and BROSKY, JJ.
This is an appeal from an order entered in the Court of Common Pleas of Allegheny County denying appellant's motion for post-trial relief following the trial court's entry of a Final Adjudication and Decree Nisi. After careful review, we affirm.
Examination of the record reveals the following: This case involves a breach of contract action arising over appellees, A. Frost, Inc. and U.S. Gold & Diamond Center, Inc.'s (collectively "U.S. Gold") attempt to exercise a right of first refusal for a retail space in the Clark Building in Pittsburgh.
U.S. Gold is a retail jeweler conducting its business in the Clark Building. In January of 1992, U.S. Gold entered into a lease for Room 215 of the Clark Building with Michael Hahalyak ("Clark"), trustee of the same building for Room 215. Simultaneous with the execution of the lease, these parties entered into a separate agreement whereby U.S. Gold agreed to pay Clark an inducement payment 1 of $61,000 upon execution of the lease that would be paid in addition to the monthly rental payments. The agreement provided U.S. Gold a right of first refusal to lease Room 214 or Room 216 if either became vacant and expressly stated: 2
Clark shall give Frost or Assignee right of first refusal to lease one or both of said rooms upon the same terms and conditions as Clark would lease either of said rooms to a bona fide third party. Clark shall give Frost or Assignee written notice of (i) the terms and conditions of any proposed lease to such bona fide third party, and (ii) notice of the amount, if any, such bona fide third party would pay as an inducement to Clark to lease either of the said premises to it. Clark shall include in said notice copies of any proposed written lease or written agreement for any additional payment to Clark. Frost or Assignee shall have thirty (30) days after receipt of such notice to accept in writing the terms and conditions of the lease and the inducement payment.
(Emphasis added).
Two months later, apparently forgetting about U.S. Gold's right of first refusal, Clark entered into a written agreement with Donald Duffy, a U.S. Gold competitor and fellow tenant of the Clark Building, to lease Room 216 to Duffy, in the event it became vacant ("Duffy Agreement"). At that time, Duffy was a tenant of Room 206 of the Clark Building. The Duffy Agreement provided that Duffy would pay Clark an inducement payment of $25,000.00 for making Room 216 available under a ten-year lease and that Duffy would vacate Room 206. Duffy and Clark also agreed to the written terms of a proposed lease for Room 216 which lease did not state that Duffy vacate Room 206.
Clark notified U.S. Gold of the Duffy Agreement and the proposed lease approximately one year later, in March of 1993. On March 10, 1993, Clark provided U.S. Gold with a copy of the Duffy Agreement for Room 216 and on March 12, 1993, provided U.S. Gold with a copy of Duffy's proposed lease for Room 216. Shortly thereafter, on April 2, 1993, U.S. Gold informed Clark that it was exercising its right of first refusal by accepting the terms and conditions of the proposed lease for Room 216 and agreeing to pay the $25,000 inducement payment that Duffy had agreed to pay for Room 216.
Clark rejected U.S. Gold's attempt to exercise its right of first refusal, claiming that the right did not apply in this case. In addition, Clark contended that U.S. Gold could not meet the same terms and conditions offered by Duffy in the Duffy Agreement because, in addition to paying a $25,000 inducement payment, Duffy was also going to leave its store cases behind and vacate Room 206. Clark also intimated that it was going provide Room 206 to one Amitabh Mehta for $85,000. On March 10, 1993, Clark provided U.S. Gold with a proposed agreement to lease Room 206 to Mehta. This proposed agreement was never signed by Mehta, and Mehta never indicated that he was going to proceed with the proposed agreement.
U.S. Gold, in an April 7, 1993, letter, disagreed with Clark's position, stating that, consistent with paragraph four of the Agreement, U.S. Gold was accepting the "terms and conditions of the proposed [Duffy] lease" for Room 216 and agreeing to pay "the amount, if any, such bona fide third party would pay as an inducement to Clark to lease" Room 216. Clark apparently continued to disagree with U.S. Gold and executed a lease agreement for Room 216 with Duffy on April 26, 1993. However, the lease executed on that date was different from the proposed Duffy lease previously accepted by U.S. Gold in that the proposed lease had stated on page 4 that the lease was the entire agreement between the parties, the new lease contained an exception to this clause, purportedly incorporating the Duffy Agreement:
except the Agreement dated April 10, 1992 and the letter agreement, of even date herewith, where as consideration hereto, Lessee agrees to surrender Room 206.
On August 4, 1993, Clark filed an Action for Declaratory Judgment against U.S. Gold and Donald Duffy, seeking relief in the form of a judgment declaring the lease executed by Duffy and Clark to be unencumbered by any claims asserted by U.S. Gold and denying U.S. Gold the right to exercise its right of first refusal.
On August 31, 1993, Room 216 became vacant and U.S. Gold informed Clark that it was prepared to occupy Room 216 pursuant to its right of first refusal. Clark refused to honor U.S. Gold's request and began altering the condition of Room 216 to prepare the space for Duffy. Consequently, on September 7, 1993, U.S. Gold filed a Complaint in Equity alleging breach of contract and a Motion for Special Relief and/or Preliminary Injunction seeking to compel Clark to honor U.S. Gold's right of first refusal and to prevent Clark from leasing the property to another party.
Clark's case and U.S. Gold's case were consolidated, and, after hearing and argument on both, the trial court entered an order granting U.S. Gold a preliminary injunction that barred Clark from leasing, tendering possession of, altering, or allowing the alteration of room 216. The injunction required Clark to honor U.S. Gold's right of first refusal.
A trial was scheduled for April 13-15, 1994, by an order dated January 10, 1994. Appellant requested a continuance on two occasions 3 because he had a trial before Judge Wettick that was scheduled to begin on April 11, 1994, pursuant to an order entered on February 16, 1994. Judge Friedman denied appellant's request because she had no other hearing dates available. Also, when Judge Friedman entered the order she had requested a response from all counsel by January 18 as to whether the April 13 date was satisfactory. 4 Judge Friedman made it clear that if the parties did not respond she would assume that the hearing date was satisfactory. Appellant did not respond to Judge Friedman's letter.
Neither appellant nor his other counsel of record appeared at the trial even though trial before Judge Wettick concluded on April 13. Judge Friedman conducted the hearing, and issued her adjudication per Pa.R.C.P. 1517 in which she held that U.S. Gold was entitled to recover as damages its lost profits caused by Clark's breach of contract. She also ordered, by a decree nisi, (1) that judgment be entered against Clark, and in favor of U.S. Gold; (2) that Clark execute a lease for the subject premises with U.S. Gold; and (3) that, until the judgments for monetary damages are paid in full, U.S. Gold maintained a right of set-off as to money now owed or owing in the future to Clark. Set-off damages and lost profits damages were also awarded to appellee Duffy. Clark filed a post-trial motion for relief and two addenda. The second addendum was stricken as untimely by order dated June 27, 1994. Ultimately, by order dated July 6, 1994, Clark's post-trial motions were denied, and this appeal followed.
Herein, appellant raises the following questions for review:
I. Did Judge Friedman commit an abuse of discretion in finding that U.S. Gold met "the same terms and conditions" to lease room 216 as offered by Duffy because the option is ambiguous and it was prepared by U.S. Gold?
II. Did Judge Friedman commit an error of law (a) in applying as the controlling law the multi-asset/multi-property transaction cases cited by counsel for U.S. Gold in his proposed findings which Judge Friedman adopted, and (b) in refusing to discuss the cases cited by the trustee pertaining to the law of options and their interpretations?
III. Did Judge Friedman commit a gross abuse of discretion in finding that Duffy's surrender value of room 206 to Clark constituted an irrelevant and worthless transaction without any value to Clark and that room 216 had an "admitted surrender" value of $25,000?
IV. Did Judge Friedman err in not permitting the trustee the opportunity to testify on his own behalf to answer the many prejudicial, injudicial and unfounded statements without evidentiary basis made by Judge Friedman in her memorandum, and in her suppressing every request by the trustee for an opportunity to be heard, even to the point of refusing to continue the hearing before her when the trustee was compelled to be present in a jury trial, and deny the trustee due process in violation of the 14th Amendment of the U.S. Constitution?
Our standard of review is as follows: When reviewing the decision of an equity co...
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