HomeMy WebLinkAbout2006-577 Civil
RANDY LEE RICKRODE, : IN THE COURT OF COMMON PLEAS
Plaintiff : CUMBERLAND COUNTY, PENNSYLVANIA
:
:
v. :
: NO. 2006 – 577 CIVIL
:
LINDA DIEHL KUHN, :
Defendant : CIVIL ACTION - LAW
ORDER OF COURT
rd
AND NOW
, this 23 day of May, 2007, having considered the testimony and evidence
presented by both parties, this Court finds that Defendant Linda Diehl Kuhn has breached the
material contractual terms of the lease by failing to maintain the leased property and failing to
pay the appropriate taxes, thereby forfeiting her rights under the lease.
IT IS HEREBY ORDERED AND DIRECTED
that Judgment is entered for the
Plaintiff and Defendant Linda Diehl Kuhn must vacate the property previously leased to her by
Plaintiff Randy Lee Rickrode. Plaintiff shall be awarded possession of Defendant’s mobile
home previously bought by Plaintiff at tax sale, September 22, 2005.
By the Court,
M. L. Ebert, Jr., J.
Nathan C. Wolf, Esquire
Attorney for Plaintiff
Douglas G. Miller, Esquire
Attorney for Defendant
RANDY LEE RICKRODE, : IN THE COURT OF COMMON PLEAS
Plaintiff : CUMBERLAND COUNTY, PENNSYLVANIA
:
:
v. :
: NO. 2006 – 577 CIVIL
:
LINDA DIEHL KUHN, :
Defendant : CIVIL ACTION - LAW
OPINION AND ORDER OF COURT
Ebert, J., May 23, 2007 -
Plaintiff, Randy Lee Rickrode, brings this Landlord Tenant Action against Defendant,
Linda Diehl Kuhn, on the grounds that she has breached the lease affording her tenancy on a
small piece of Rickrode’s property in Dickinson Township. Due to Defendant’s alleged failure
to pay taxes and to keep and maintain the leased property in a good state of appearance and
repair, Rickrode has sought to terminate the lease. Defendant denies that she has breached any
terms of the lease and contends that Plaintiff has no grounds to evict her from the property.
STATEMENT OF FACTS
1
On or about April 3, 1980, as part of the settlement of the Estate of Ella M. Rickrode,
Defendant received a 999 year “ground lease” of a tract of land 131 ft. x 131 ft. at 403 Mountain
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View Road, Mount Holly Springs, Dickinson Township, Pennsylvania. The leased tract of land
constituted a small portion (about 22.7%) of a larger piece of property which Plaintiff received
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title to by Deed on June 29, 2005. Plaintiff owns the totality of the main 2 acre tract of land, but
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his ownership is subject to the 999 year lease described above.
1
Def. Ex. 4
2
Pl. Ex. 2; The lease commenced on or about April 3, 1980 and was projected to expire on April 2, 2979.
3
Pl. Ex. 1
4
Notes of Testimony (Hereinafter “N.T. __”) 9-10
2
According to the lease terms, Kuhn was responsible to pay all real and personal property
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taxes and maintain the grounds and buildings on the leased property throughout her occupancy.
Unfortunately, Kuhn has failed to pay property taxes on the mobile home since 1995, apart from
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$100.00 paid on September 12, 1997. Kuhn testifies that she was unable to pay the taxes on the
home, because she was shouldering the entire real property tax burden – which according to the
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lease was not hers to bear. However, tax documentation reveals that Kuhn was not punctual,
nor consistent in paying the real property taxes. Defendant made tax payments up to 2003, but
all payments merely contributed to unpaid, former taxes. She made no payments on the 2000 to
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2002 taxes. Subsequently the real property was posted for tax sale in 2002, where it was
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purchased by James B. Small for $999.64. Kuhn was only permitted to stay on the property
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after her brother, Stanley Rickrode, redeemed the property from Mr. Small. In order to retain
the property, Stanley Rickrode entered into a stipulation agreement with Small whereby he
conveyed to Small a 25 feet-wide access easement across his property at 8 Cabin Lane
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Shippensburg, Pennsylvania. Essentially, in order to redeem the property and allow Kuhn to
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stay in her home, Stanley Rickrode was required to give up a portion of his property rights.
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Not long after redeeming the property, Stanley Rickrode attempted to evict Kuhn. In June,
2005, Stanley Rickrode granted the full property parcel to his son, Plaintiff Randy Lee
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Rickrode.
5
Pl. Ex. 2
6
Pl. Ex. 17, p. 1
7
N.T. 129; 135
8
Def. Ex. 2; N.T. 137
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N.T. 136; Pl. Ex. 18.
10
Pl. Ex. 16 & 18
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Pl. Ex. 18 Stipulation and Agreement.
12
N.T. 129-30
13
N.T. 115; 131
14
Pl. Ex. 1; N.T. 48
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Beyond her failure to pay taxes, Kuhn has allowed the property to fall into a state of
disrepair and poor appearance. Inoperable vehicles, campers, boats, garbage, metal, and broken
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appliances clutter the property. The inner workings of the home are also in likely disrepair as
evidenced by the fact that in 2005, Defendant was forced to install a temporary, portable toilet
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for several months because the septic system stopped functioning.
The Tax Assessment Office of Cumberland County assessed taxes on Kuhn’s mobile
home located on the leased property. The mobile home was listed at a tax sale in 2005, showing
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an outstanding tax bill of some $3,791.71. Defendant testified that the home had previously
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.
been put up at tax auction nine or ten times, but no one ever purchased it At a tax sale in
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September 2005, Rickrode purchased Kuhn’s mobile home. Defendant did not appear at the
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sale because she thought no one would care to buy it.
After purchasing the mobile home, Plaintiff filed a Notice to Quit, seeking to terminate
Defendant’s lease and evict her from the property due to her failure to pay taxes and maintain the
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property. Defendant refused to leave the property, contending that Rickrode had no right to
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terminate the lease. Plaintiff subsequently brought this suit.
DISCUSSION
The analysis of the present situation requires a two step inquiry. Primarily, we must
determine whether material terms of the contract were breached, justifying the termination of the
contract. Secondly, we must consider whether the breach of the terms entitles Rickrode to
possession of the Defendant’s home.
15
See Pl. Ex. 13 & 14
16
N.T. 132
17
Pl Ex. 7
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N.T. 142-43
19
Pl. Ex. 8-10
20
N.T. 143
21
Pl. Ex. 11; N.T. 26
22
N.T. 28
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I. Materiality of Breached Terms
According to Pennsylvania law, “Any material failure of performance by one party to a
contract not justified by the conduct of the other discharges the latter's duty to give the agreed
exchange; but if the alleged breach was an immaterial failure of performance, and the contract
was substantially performed, the provisions of the contract are still effective.” Cimona v.
Bronich, 517 Pa. 378, 384, 537 A.2d 1355, 1358 (1998). “Whether a breach is so substantial as
to justify an injured party's regarding the whole transaction as at an end ‘is a question of
degree;’” Widmer Engineering, Inc. v. Dufalla, 2003 Pa. Super 391, 837 A.2d 459, 468 (2003),
citing Gray v. Gray, 448 Pa.Super. 456, 468, 671 A.2d 1166, 1172 (1996) (citations omitted). In
determining materiality for purposes of breaching a contract, a court must consider such factors
as: the extent to which the injured party will be deprived of the benefit which he reasonably
expected; the extent to which the injured party can be adequately compensated for that part of the
benefit of which he will be deprived; the extent to which the party failing to perform or to offer
to perform will suffer forfeiture; the likelihood that the party failing to perform or offer to
perform will cure his failure; taking account of all the circumstances including any reasonable
assurances; the extent to which the behavior of the party failing to perform or offer to perform
comports with standards of good faith and fair dealing. Restatement (Second) of Contracts § 241
(1981).
After applying the applicable factors to this case, it is clear that Defendant’s failure to
adhere to the conditions of the ground lease constitutes material failure justifying Rickrode’s
termination of the lease. According to the language of the contract, the property owner’s only
reasonable expectation in the bargain would be that the lessee maintain the leased property in
good condition and pay the appropriate taxes. Defendant’s continuous failure to perform these
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tasks deprived Rickrode of the only expectations he logically anticipated from the contract, (i.e.
tax payments and cleanliness). Considering Defendant’s poor financial situation, Rickrode will
likely never be adequately compensated for that part of the benefit of which he has been denied.
Minimal financial resources aside, Defendant’s apathetic attitude regarding the
impending possibility of losing her home for failure to pay her taxes suggests that she was not
planning on paying her taxes any time in the near future. The facts reveal that Defendant was
aware of how poorly she had maintained the property. So much so that she failed to appear at the
tax upset sale because she expected no one to bid on such an unappealing piece of property.
Defendant testified that she thought no one would want the mobile home, as they had not
purchased it at previous tax sales. Apathy so great as to neglect the care of one’s property after
having previously escaped potential eviction on multiple occasions cannot be rewarded by law or
equity. Despite the fact that Defendant had agreed to maintain the property and pay the
appropriate taxes, she clearly had no intention of doing so. Her behavior thus deprived the
owner of his only reasonable expectations and materially breached the contractual terms to the
point that the contract was unperformed.
The outcome of this analysis would be different if, for example, the evidence would have
suggested that Kuhn had merely fallen behind in her taxes or had small maintenance issues
around the leased property. Unfortunately, such is not the case at bar. Kuhn has not paid taxes
for years, as is evidenced by the fact that her mobile home has been posted at tax sale nine or ten
times and was in such a poor state that no one cared to purchase it. Photographic and
documentary exhibits indicate that the home and property are undoubtedly in serious disrepair.
This is not a case of immaterial breach, but of substantial failure to adhere to the terms and
conditions of the lease.
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II. Forfeiture
Defendant has argued with some fervor that since the ground lease document contains no
provision identifying grounds for forfeiture, or even reserving the right to seek eviction by the
lessor, then the terms must be construed as covenants (as opposed to conditions subsequent)
which do not provide for forfeiture of the ground lease. Defendant thus concedes under this
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argument that Plaintiff has a right to the mobile home, which he purchased, but contends that
he has no right to evict her from the real property. We shall consider both common law and
statutory arguments in regards to the issue of whether Kuhn’s breach of the contractual terms
entitles Rickrode to possession.
A. Common Law
Defendant’s argument requires an examination of the common law doctrines of
conditions and covenants. Both parties have relied on Williams v. Notopolos, 259 Pa. 469, 475-
76, 103 A. 290 (1918), as a basis for their arguments. The facts of this case center on a three-
story brick building which was leased to Notopolos for a term of five years with an option to
renew. The lease terms contemplated that the lessee would be responsible for any alterations and
improvements to the building and would be required to submit any such plans to the lessor for
approval before construction could begin. Lessee Notopolos submitted plans for proposed
alterations to the leased building but the lessor did not approve them. Notopolos proceeded to
make the alterations without the required approval and a legal suit resulted.
After deciding that the lessor was entitled to the benefits of the lease provisions, the
Notopolos court analyzed whether the breached terms should be construed as conditions or as
23
Def. Ex. 3.
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covenants. In its analysis the court provided a general explanation of the difference between the
two terms.
“‘The underlying principle of all conditions subsequent in grants of land is that
they prescribe terms upon which the land shall revert to the grantor. The condition
may be that subsequent to receiving the land the grantee must not do some
particular thing or it may be that he must do some required thing. But in either
case, if the grantee fails to perform the condition, his right to the land ceases, and
the estate reverts to the grantor as a matter of right; and he may enter or bring
ejectment.’: Sims on Covenants with Run with the Land, p. 20. ‘A condition, on
breach of which the tenant's interest may be terminated, is to be distinguished
from a covenant, a breach of which cannot, in the absence of a statutory provision
to the contrary, affect the tenant's interest, but merely gives the landlord a right of
action for damages, or occasionally, a right to an injunction, or a decree for
specific performance...Mere words of agreement, not contemplating a termination
of the lessee's interest upon his default, create a covenant, and not a condition.’: 2
Tiffany on Landlord & Tenant, Sec. 194(b), p. 1364.”
Williams v. Notopolos, 259 Pa. 469, 475-76, 103 A. 290, 291-92 (1918).
The court went on to state that the language of the lease, “Lessee also agrees,” could
fairly be regarded as merely a covenant but found it noteworthy that covenants, agreements, and
conditions were placed substantially upon the same basis in the lease, and that a breach of any
such constructions could give the lessor the right to declare forfeiture. The deciding factor in this
case did not turn on an interpretation of whether the terms of the lease were covenants or
conditions, but rather on the requested remedy. Plaintiff requested the extraordinary remedy of
confession of judgment in ejectment. Under the specific terms of the lease, such a remedy could
only be provided for breach of any conditions of the lease. Id. at 476. Therefore, even though
the language of the lease could have been interpreted as conditional the court chose not to so
interpret it in order to avoid the extraordinary remedy of confession of judgment in ejectment.
This was so because there existed a real factual issue of whether the lessor acted in good faith in
refusing to approve the renovation plans submitted to him by the lessee. It was the lessor’s
failure to act that created the crisis leading to potential ejectment.
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We will now apply the principles of Notopolos to the instant case. While it is true that
the language, “Lessee agrees” may constitute a covenant, the language of the lease at bar clearly
states that, “All of these provisions of this lease shall be…construed to be ‘conditions’ as well as
‘covenants’ as though the words specifically expressing or imparting covenants and conditions
were used in each separate provision.” The clause establishes that language typically considered
“covenantary” in nature, not only can be but should be interpreted as a condition and vice versa.
In Notopolos, the lease specifically stated that the lessor was authorized to confess judgment in
ejectment against the lessee only upon a breach by the lessee of any of its “conditions.” In the
case at bar, there is no provision stating that forfeiture can only occur upon the breach of any of
the conditions of the lease. Thus, breach of the terms of this lease could logically result in
forfeiture of the lease.
Not only does the legal analysis allow for forfeiture, but the factual distinctions between
the two cases support such a finding. In Notopolos, the lessor was asking for ejectment because
the tenant was changing the building – albeit it for the better. This was an extraordinary remedy
to request when there were other less dramatic options to pursue – for example an injunction or
payment of damages for restoration of the building to its former condition. Unlike Notopolos,
here the lessee’s total failure to comply with any of the key terms of the lease has created the
forfeiture crisis.
Generally, judicial inclination is adverse to forfeiture. However, in this case, forfeiture is
the only appropriate remedy. If the terms were to be construed as covenants, the only possible
remedy would be damages. But the Defendant can not afford to pay her taxes or maintain her
property. To have the Defendant’s small square in the middle of Plaintiff’s whole property in a
constant state of disrepair depreciates the value of the land. To award damages will only add to
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list of things the Defendant cannot pay. Eventually the case will return to court for judgment
and execution. Once more the Defendant will be in the courtroom bringing forth the same
arguments as today and maintaining, “regardless of what I fail to do this 131 foot square is mine
until 2979 A.D.” Under these circumstances, the law is not opposed to construing these terms to
be conditional in nature, and it is proper and just to rule in favor of forfeiture.
B. The Landlord and Tenant Act of 1951
The Landlord and Tenant Act of 1951 provides:
“A landlord desirous of repossessing real property from a tenant except real
property which is a mobile home space as defined in the act of November 24,
1976 (P.L. 1176, No. 261) known as the "Mobile Home Park Rights Act," may
notify, in writing, the tenant to remove from the same at the expiration of the time
specified in the notice under the following circumstances, namely, (1) Upon the
termination of a term of the tenant, (2) or upon forfeiture of the lease for breach
of its conditions, (3) or upon the failure of the tenant, upon demand, to satisfy any
rent reserved and due.”
68 P.S. § 250.501(a) (emphasis added).
The emphasized language in this statute is pertinent to the case at bar. The language of
the ground lease between the two parties clearly dictates that Kuhn pay both her personal and
property taxes as well as keep the leased grounds and other property on the grounds in a state of
good repair. She has indisputably failed to satisfy either provision.The contract unambiguously
states that the provisions of the lease should be construed as both “conditions” and “covenants.”
Considering the above discussion, we find no logical reason to believe that the failure to fulfill
these fundamental and material responsibilities should result in anything other than forfeiture as
provided by the Landlord and Tenant Act. Thus common law and statutory law both favor our
decision today.
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CONCLUSION
This Court finds that Defendant’s failure to pay the appropriate taxes and keep her
personal property in a state of good repair constitutes a material breach of the parties’ contractual
agreement. Considering common law doctrines of contractual interpretation in conjunction with
the language of the Landlord and Tenant Act of 1951, this Court finds that the contractual
language allows for forfeiture of the lease rights as an appropriate remedy for material breach of
terms. Plaintiff Rickrode is thereby entitled to evict Defendant from the property as well as to
take possession of Defendant’s mobile home purchased at tax sale.
Accordingly, the following order shall be entered:
ORDER OF COURT
rd
AND NOW
, this 23 day of May, 2007, having considered the testimony and evidence
presented by both parties, this Court finds that Defendant Linda Diehl Kuhn has breached the
material contractual terms of the lease by failing to maintain the leased property and failing to
pay the appropriate taxes, thereby forfeiting her rights under the lease.
IT IS HEREBY ORDERED AND DIRECTED
that Judgment is entered for the
Plaintiff and Defendant Linda Diehl Kuhn must vacate the property previously leased to her by
Plaintiff Randy Lee Rickrode. Plaintiff shall be awarded possession of Defendant’s mobile
home previously bought by Plaintiff at tax sale, September 22, 2005.
By the Court,
M. L. Ebert, Jr., J.
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Nathan C. Wolf, Esquire
Attorney for Plaintiff
Douglas G. Miller, Esquire
Attorney for Defendant
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