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HomeMy WebLinkAbout99-2894 civil term]. A54027/00 HOWARD STEAGER AND IDA : IN THE SUPERIOR COURT OF STEAG ER, : PEN N SYLVAN IA Appellants : V. : ROBERT CORNMAN AND SANDRA : CORNMAN, : Appellees : No. 699 MDA 2000 Appeal from the ORDER ENTERED February 16, 2000 In the Court of Common Pleas of CUMBERLAND County CIVIL, No. 99-2894 civil term BEFORE: CAVANAUGH, STEVENS and HEST~ER~ ]]. F I L E D F£[I l' 2001 MEMORANDUM: Howard and Ida Steager appeal from the order which awarded Robert and Sandra Cornman $32,523 on their counterclaim to the Steager's action seeking ejectment and unpaid rent.~ We affirm. The trial court aptly set forth the facts underlying the instant dispute as follows: The parties entered into a written agreement dated November 30, 1983, regarding a house at 416 Reno Street, New Cumberland, Cumberland County. The Agreement provided that [appellants] would lease the house to [appellees] but that no rent would be paid for December 1983. For the six months of January through .lune, [1984], the rent was $400 per month for a total of $2400. The Agreement further provided: And ... [appellants] shall retain a one hundred ($100.00) dollar security deposit which shall be paid by [appellees] to [appellants] at the signing of the lease. z The docket reflects that judgment on the award was entered on March 15, 2000. J. A54027/00 It is hereby agreed that [appellees] will purchase the aforesaid premises on July 1, 1984[,] on the following terms: Price - $38,500.00 Four thousand five hundred ($4,500.00) dollars shall be paid to [appellants] in cash and a sales agreement will be entered into for Thirty-four thousand ($34,000.00) dollars providing for interest at the rate of twelve (12%) per centum per annum and monthly payments in the amount of Three- hundred ninety-nine and 07/100 ($399.07) dollars, by the further provision that the price shall be paid in full no later than five (5) years after the date of the aforesaid agreement. The agreement shall also provide that there will be no penalty for prepayments. The $4,500.00 down payment shall be made no later than July 1, 1984, and if the said payment is not made, [appellants] shall be relieved of their obligation to sell the premises to [appellees]. THIS LEASE SHALL NOT BE RENEWED. After they moved into 416 Reno Street, [appellees] paid $400 rent for six months but they could not raise the $4,500 down payment by July 1, 1984, to purchase the property, as allowed in the agreement. Notwithstanding that the agreement set forth that failure to pay the $4,500 by July 1, 1984, would relieve [appellants] of the obligation to sell the premises to [appellees], and that the lease would not be renewed, [appellees] asked for an extension of time to purchase the house. [Appellants] told them that the agreement could be rewritten and when [appellees] were able to raise the money [appellants] would sell the house to them at a reasonable price. [Appellants] also allowed [appellees] to remain in the house. [Appellees] thereafter paid [appellants] $400 per month. [Appellants] live in a house across the street from the house they own at 416 Reno Street which [appellees] have lived in since December 1, 1983 .... [W]hen [appellees] moved into the house sixteen years ago the house was in a state of disrepair. [Appellees] asked [appellants] if they could make improvements and [appellants] did not object. [Appellees], trusting [appellants] on their promise to sell them the house, and with the knowledge of [appellants], made major capital improvements and repairs to the house -2- 3. A54027/00 with most of the work done by [appellee husband]. They remodeled the kitchen and dining room and renovated and expanded a bathroom and bedroom. They insulated and put drywall in the attic. They upgraded the electric service to 200 AMP. They installed a new water heater, dryer hookup facility and front door. They made major structural repairs to the front porch and walk. They replaced part of the roof. They installed a fence and did other significant improvements. The value of these improvements was $32,523. Overall, [appellees] were never in a strong financial position and they were not able to agree with [appellants] on a purchase price and sale arrangements for the house. In :[998, [appellants] raised the rent to $500 per month. On October 14, 1998, [appellants] sent a letter to [appellees] advising them that they were three months in arrears in rent and that if the arrears were not paid by November :[, they would initiate eviction proceedings. In addition, [appellants] advised [appellees] that as of December :[, 1998, the rent was increased to $650 per month. The letter set forth that [appellees] should advise them of their "intentions to either enter into a new lease or to vacate the premises." On IVlarch 24, :[999, [appellants] sent [appellees] a Notice of Termination of Lease & Notice to Vacate. [Appellees] did not vacate and [appellants] filed this action in ejectment on June :[, 1999. [Appellees filed a counterclaim seeking a judgment for the cost of improvements they made to the house]. Trial Court Opinion, February :[6, 2000 at 1-4 (emphasis and footnotes omitted). A non-jury trial was conducted during which it was shown that appellees were $3250 in arrears in their rent payments. Appellees asserted that their cost for the improvements was over $38,000. They presented receipts for materials totaling over $30,000. Appellants presented the testimony of an expert real estate appraiser who opined that the property held a fair market value of $74,000. He opined that the fair market value of -3- ]. A54027/00 the home in 1983 was approximately $38,000. He opined that the net increase in the fair market value of the property was due primarily to the upward growth of the real estate market over time and that the improvements appellees made to the residence increased its market value by merely $2000. At the conclusion of trial, the court entered an order which (1) ejected appellees from the premises; (2) awarded appellants $3250 in unpaid rent; and (3) awarded appellees $32,523 on their counterclaim. Following the denial of post-trial motions, both parties filed notices of appeal. The appeal of Mr. and Mrs. Cornman, filed at 698 MDA 2000, was discontinued. The appeal of Mr. and Mrs. Steager is now before us and raises two issues for our review: 1. THE LOWER COURT ERRED IN AWARDING DAMAGES TO THE CORNMANS BECAUSE IMPROVEMENTS INURE TO THE BENEFIT OF THE LANDLORD AT THE TERMINATION OF THE LEASE. 2. THE TRIAL COURT ERRED IN DISREGARDING THE UNREBU'I-FED TESTIMONY OF THE STEAGERS' EXPERT APPRAISAL WITNESS INDICATING THAT THE IMPROVEMENTS DID NOT INCREASE THE VALUE OF THE SUB]ECT PROPERTY. "Our scope of review for cases tried without a jury is limited to a determination of whether the findings of the trial court are supported by competent evidence and whether the trial court committed error in the application of law." Anderson v. Litke Family Trust Ltd. Partnership, 748 A.2d 737, 739 (Pa.Super. 2000). ' 4 - ]. A54027/00 Findings of the trial judge in a non-jury case must be given the same weight and effect on appeal as a verdict of a jury and will not be disturbed on appeal absent an error of law or abuse of discretion. When this court reviews the findings of the trial judge, the evidence is viewed in the light most favorable to the victorious party below and all evidence and proper inferences favorable to that party must be taken as true and all unfavorable inferences rejected. /'d. (citing Behar v. Frazier, 724 A.2d 943, 946 (Pa.Super. 1999)). Our disposition of appellants' first issue is controlled by the decision in Chesney v. Stevens, 644 A.2d 1240, 1244 (Pa.Super. 1994), wherein we held that a tenant is entitled to recover, from the landlord, the costs of capital improvements the tenant makes to a leased residence where the tenant has a "reasonable and good faith expectation of long-term occupancy." ]:n Chesney, the landlord and tenants entered into a residential month-to-month lease in 1984. At the time the lease was executed, the dwelling was in disrepair. Over a period of three years, the tenants made substantial improvements to the leased premises, including, "two new bathrooms, carpeting the floors, a new septic system, new windows, a new furnace, a new kitchen, wiring the entire house, two new porches, new plumbing, and painting the outside of the house." Zd. at 1241-42. ]:n 1991, the landlord gave the tenants fifteen days notice to vacate the premises. The tenants commenced suit seeking a judgment declaring that they had a life estate in the leased premises, or, in the alternative, to recover the costs of the improvements they made to the property. The court found that a life estate in the premises was not established but that the tenants were entitled - 5 - ]. A54027/00 to recover $11,790 for the improvements they made. On appeal, we concluded that the court committed no error and that under a theory of unjust enrichment, the tenants were entitled to recover "the value of the benefit they have conferred upon the appellant-landlord." Xd. at 1245. In the case sub judice, we conclude that the appellee-tenants had.a reasonable and good faith expectation of future ownership in the leased premises and are entitled to recover the value of the benefit they conferred upon the appellant-landlord. At trial, appellees presented over $30,000 in receipts for the improvements they made. Appellants' expert testified that the value of the dwelling had increased by approximately $36,000 since 1984, but that only $2000 of that increase in value was attributable to the improvements. Appellants now claim the court erred in failing to accept their expert's valuation testimony. We disagree. "Fair market value" is the price which "a purchaser, who is willing but not obligated to buy, would pay an owner, who is willing but not obligated to sell." Bryn Mawr Trust Co. v. Healy, 667 A.2d 719, 723 (Pa.Super. 1995) (citing First Pa. Bank, N.A. v. Peace Valley Lakeside, 478 A.2d 42 (Pa.Super. 1984)). In arriving at a fair market value, courts should consider recent sales of realty of comparable location and description, uses to which the realty is adapted and might reasonably be applied, demand for the realty, and income produced by it, and all elements which might affect its actual value. Union National Bank of Pittsburgh v. Crump, 349 Pa. 339, 37 A.2d 733 (1944). "In reviewing the sufficiency of the evidence, we view the evidence in the light most favorable to the verdict winner, the appellees in the present case. Our sole task is to decide if there was sufficient evidence to sustain the verdict." Fetzer. Vishneski, 582 A.2d 23, 25 (Pa.Super. 1990) (citing Fannin v. Cratty, 480 A.2d -6- ]. A54027/00 1056 (Pa.Super. 1984)). Additionally, "[t]he trier of fact weighs the credibility of an expert witness's testimony regarding valuation. Mellon Bank v. Restaurant of A.B.E., 364 Pa.Super. 567, 528 A.2d 654 (1987). An appellate court must accept the credibility determinations of the trial court with respect to the credibility of witnesses. /'d." Bryn Mawr Trust Co., 667 A.2d at 723. Confederation Life Zns. Co. v. Morrisville Properties L.P. and Site Dev., Znc., 715 A.2d 1147, 1154 (Pa.Super. 1998). Here, the trial court found that the testimony of appellants' valuation expert was not credible and, of course, we defer to the court's determinations of credibility, lVloreover, the court noted that the expert had not seen the interior of the property and had based his opinion of the property's value, in part, on the assumption that the property had been in "average" condition at the time the lease was executed and in "average" condition after the improvements had been accomplished. The court, however, credited the testimony of the appellees that the property had initially been in disrepair. We have carefully reviewed the entire record in this matter and are persuaded that the court's findings were based on sufficient evidence and that it committed no error of law or abuse of discretion. The order which awarded appellees $32,253 on their counterclaim is affirmed. Order affirmed. -7- ]. A54027/00 Date: -8-