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HomeMy WebLinkAbout99-2894 civil term (2)HOWARD AND IDA STEAGER, IN THE COURT OF COMMON PLEAS OF PLAINTIFFS CUMBERLAND COUNTY, PENNSYLVANIA ROBERT AND SANDRA CORNMAN, DEFENDANTS 99-2894 CIVIL TERM IN RE: CROSS-MOTIONS FOR POST-TRIAL RELIEF ORDER OF COURT AND NOW, this ~,~(~"' day of February, 2000: (1) The motion of plaintiffs for post-trial relief, IS DENIED. (2) The motion of defendants for post-trial relief, IS DENIED. By the Court, Edgar B. Bay y, Peter B. Foster, Esquire For Plaintiffs Arthur K. Dils, Esquire For Defendants :saa HOWARD AND IDA STEAGER, IN THE COURT Of COMMON PLEAS OF PLAINTIFFS CUMBERLAND COUNTY, PENNSYLVANIA V. ROBERT AND SANDRA CORNMAN, DEFENDANTS 99-2894 CIVIL TERM IN RE: CROSS-MOTIONS FOR POST-TRIAL RELIEF OPINION AND ORDER OF COURT Bayley, J., February '16, 2000:-- Plaintiffs, Howard Steager and Ida Steager filed a complaint against defendants Robert Cornman and Sandra Cornman to eject them from a house at 416 Reno Street, New Cumberland, Cumberland County, and recover unpaid rent. Defendants fought ejectment and filed a counterclaim seeking an award for the cost of improvements they made to the house. Following a bench trial, an order was entered (1) ejecting defendants from the house, (2) awarding plaintiffs rent of $3,250, and (3) awarding defendants $32,523 on their counterclaim against plaintiffs. Plaintiffs filed a motion for post-trial relief seeking to overturn the $32,523 awarded on the counterclaim. Defendants filed a motion for post-trial relief seeking to overturn the order ejecting them from the house and the $3,250 awarded to plaintiffs, and an order allowing them to purchase the property. The issues were briefed and argued and are ready for decision. The following facts are supported by the evidence. 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 plaintiffs would 99-2894 CIVIL TERM lease the house to defendants but that no rent would be paid for December, 1983. For the six months of January through June, 1994, the rent was $400 per month for a total of $2,400. The Agreement further provided: And... the lessors shall retain a one hundred ($100.00) dollar security deposit which shall be paid by the lessees to the lessors at the signing of this lease. It is hereby agreed that the parties of the second part 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 the parties of the first part 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, the parties of the first part shall be relieved of their obligation to sell the premises to the parties of the second part. THIS LEASE SHALL NOT BE RENEWED. (Emphasis added.) After they moved into 416 Reno Street, defendants 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 written agreement. Notwithstanding that the agreement set forth that the failure to pay the $4,500 by July 1, 1984, would relieve plaintiffs of the obligation to sell the premises to defendants, and that the lease would not be renewed, defendants asked for an extension of time to purchase the house. Plaintiffs told them that the agreement could be rewritten and when they were able to raise the money they would sell the house to them at a reasonable price. Plaintiffs also allowed defendants -2- 99-2894 CIVIL TERM to remain in the house. They thereafter paid plaintiffs $400 per month. Plaintiffs live in a house across the street from the house they own at 416 Reno Street which defendants have lived in since December 1, 1983. Defendant Sandra Cornman, age 56, is a housewife. She and her husband Robert, who is a self- employed contractor doing mostly paving and some other miscellaneous work, live with three teenagers. When defendants moved into 416 Reno sixteen years ago the house was in a state of disrepair. Defendants asked plaintiffs if they could make improvements and plaintiffs did not object. Defendants, trusting plaintiffs on their promise to sell them the house, and with the knowledge of plaintiffs, made major capital improvements and repairs to the house with much of the work done by Robert Cornman. 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 $32,523.2 Overall, defendants were never in a strong financial position and they were not ~ Sandra Cornman testified that even though they did not have a deed to the house they made substantial improvements to it because they felt "that we would have the deal finalized, and what we put into it we put our heart and soul into the house thinking that it was going to be ours, that we would come to this agreement." 2 The Cornmans sought damages of a little more than $38,000. -3- 99-2894 CIVIL TERM able to agree with plaintiffs on a purchase price and sale arrangements for the house. In 1998, plaintiffs raised the rent to $500 per month. On October 14, 1998, plaintiffs sent a letter to defendants advising them that they were three months in arrears in rent and that if the arrears were not paid by November 1, they would initiate eviction proceedings. In addition, plaintiffs advised defendants that as of December 1, 1998, the rent was increased to $650 per month. The letter set forth that defendants should advise them of their "[i]ntentions to either enter into a new lease or to vacate the premises." On March 24, 1999, plaintiffs sent defendants a Notice of Termination of Lease & Notice to Vacate. Defendants did not vacate and plaintiffs filed this action in ejectment on June 1, 1999. The case went to trial on August 30, 1999, and the verdict was entered on September 7, 1999. At that point defendants had paid all but $650 per month from May through September, 1999, for a total of $3,250. At the entry of the verdict, the court made the following findings: Plaintiffs are not estopped from obtaining judgment of possession because, while they promised to convey the subject property to defendants and knew that defendants were making substantial expenditures for capital improvements and repairs to the property, there was never an agreement as to the price that defendants would pay for the property. Defendants made substantial capital improvements and repairs to the subject property upon the promise of plaintiffs to convey the property to them. Plaintiffs knew that defendants were making the substantial capital improvements and repairs solely in reliance on their promise to convey the property to them. Plaintiffs never objected to defendants making the capital improvements and repairs or told defendants that they would not fulfil their promise to convey the property to them. -4- 99-2894 CIVIL TERM DISCUSSION In the Steagers' motion for post-trial relief they claim they cannot be held liable to the Cornmans on the counterclaim. In Chesney v. Stevens, 435 Pa. Super. 71 (1994), tenants entered into a month to month lease with a landlord for a residential dwelling in 1984. The dwelling was old and from 1984 through 1987 the tenants made substantial improvements to it including two new bathrooms, carpeting the floors, a new septic system, new windows, a furnace, a new kitchen, wiring the entire house, two new porches, new plumbing, and painting the outside of the house. The tenants never demanded or requested that the landlord pay for these improvements. In 1991, the landlord gave the tenants fifteen days notice to vacate the leased premises. In response the tenants commenced an action seeking a declaration that they had a life estate in the leased premises, and a judgment for the value of the improvements they had made to the real estate. The trial court concluded that the tenants had not established a life estate in the leased premises, but that they were entitled to recover $11,790 for the improvements they made to the premises. Both parties filed exceptions which were denied. The order was affirmed by the Superior Court of Pennsylvania. The Court stated: [i]f a tenant, with a reasonable and good faith expectation of long-term occupancy or ownership, makes substantial and obvious improvements to the real estate of another, the tenant is entitled to compensation for the improvements when they have been accomplished with the actual or implied knowledge and consent of the owner. Concluding that the trial court was correct that the tenants had not made a cognizable -5- 99-2894 CIVIL TERM claim for the imposition of a life estate, the Superior Court still upheld the award of monetary damages because the tenants: [m]ade substantial and obvious improvements with a reasonable and good faith expectation of long-term occupancy; and that appellant- landlord had knowledge of these improvements, and consented to them by his passive receipt of the benefit conferred upon him (an improved dwelling, with a substantially increased market value and rental value). In these circumstances, it would be unconscionable to allow appellant- landlord to retain this benefit without reasonably compensating appellees- tenants for the improvements they made to the dwelling. Chesney is on point to support the liability of the Steagers to the Cornmans on the counterclaim. Not only are the Steagers liable to the Cornmans on the basis of unjust enrichment, which was the theory upon which relief was granted in Chesney, they are also liable by virtue of the Cornmans having made the improvements to the real estate based on their oral promise to convey the house to them. Zvonik v. Zvonik, 291 Pa. Super. 309 (1981). The Steagers also challenge the award of damages to the Cornmans maintaining (1) that all improvements made by them as tenants during the lease inure to their benefit as landlords, and (2) the court erred in disregarding the testimony of their real estate appraiser that the improvements the Cornmans made to the property did not increase the market value. As to the first argument, the decision of the Superior Court in Chesney v. Stevens, supra, rejected the same claim by the landlord on facts similar to the present case. As to the latter argument, a real estate appraiser for the Steagers, Mark W. Heckman, testified that in his opinion 416 Reno Street had a market -6- 99-2894 CIVIL TERM value in 1983 of approximately $38,000, assuming that the property was in average condition, and that the current value is $74,000, based on the property being in average condition, and that most of the increase in value cannot be attributed to the improvements made by the Cornmans but rather is a result of appreciation. The weight to be given to expert testimony on the valuation of property is for the trier of fact, and it is the province of the trier of fact to weigh the credibility of the witness's testimony. Mellon Bank (East) National Association v. Pennsylvania Restaurant of A.B.E., Inc., 364 Pa. Super. 567 (1987). In general, the opinion of an expert has value only when you accept the facts upon which it is based. Green v. Schuylkill County Bal. of Assessment Appeals, 730 A.2d 1017 (Pa. Commw. 1999). We could believe all of, part of or none of an expert witness's testimony. Id. Heckman's opinion that the property had a value of approximately $38,000 in 1983 (the Cornmans moved in on December 1, 1983), is not credible because he testified that his opinion was based on the property then being in average condition when we have found the credible evidence is that the property was in a state of disrepair. As to his opinion that the current value of the property is approximately $74,000, he acknowledged that he only viewed the exterior of the property a few days before the trial on August 30, 1999, and that he made no serious effort to gain entry for a full inspection of the interior which he assumes is only in average condition. Based on these facts we find that Heckman's opinion that all but a small amount of the increase in the value of the property since 1983 is based on appreciation is not credible. We agree -7- 99-2894 CIVIL TERM with the Cornmans that if the property had remained in a state of disrepair as it was before they made their substantial improvements it would not have significantly increased in value. What the Cornmans did was far more than mere repairs or replacement of waste. Their improvements enhanced the value and utility of the property and the award of damages to them is therefore supported by the credible evidence. As to the post-trial motion of the Cornmans, their counterclaim did not seek an order directing the Steagers to sell the property to them. They were on a month to month lease which they breached by being in arrears by $3,250. Therefore, the order of ejectment was proper as was the verdict in favor of the Steagers in the amount of $3,250. For the foregoing reasons, the following order is entered. ORDER OF COURT AND NOW, this ____~" day of February, 2000: (1) The motion of plaintiffs for post-trial relief, IS DENIED. (2) The motion of defendants for post-trial relief, IS DENIED. Edgar B. Bayle¥, J. 99-2894 CIVIL TERM Peter B. Foster, Esquire For Plaintiffs Arthur K. Dils, Esquire For Defendants :saa -9-