HomeMy WebLinkAbout99-5198 EquityCUMBERLAND ·
PARTNERS, a '
Pennsylvania limited '
partnership, '
Plaintiff '
V.
OLYMPIC REALTY
and DEVELOPMENT :
CORPORATION, a/k/a :
OLYMPIC REALTY & :
DEVELOPMENT CORP.,:
a New York corporation, :
and '
H.C. HOLDINGS :
LIMITED :
PARTNERSHIP, a :
Pennsylvania limited :
partnership, :
Defendants :
IN THE COURT OF COMMON PLEAS OF
CUMBERLAND COUNTY, PENNSYLVANIA
CIVIL ACTION - EQUITY
NO. 99-5198 EQUITY TERM
IN RE: DEFENDANTS' MOTION FOR
JUDGMENT ON THE PLEADINGS
BEFORE BAYLEY and OLER, JJ.
ORDER OF COURT
ORDER OF COURT
AND NOW, this 2Is{-day of November, 2000, upon consideration of
Defendants' motion for judgment on the pleadings, and for the reasons stated in
the accompanying motion, the motion is denied.
BY THE COURT,
Michael J. Clement, Esq.
WISLEY, PEARLSTINE, TALONG,
CRAIG, GARRITY & POTASH, LLC
Office Court at Walton Point
484 Norristown Road
Blue Bell, PA 19422
Attorney for Plaintiff
Mark D. Bradshaw, Esq.
Ronald M. Lucas, Esq.
One South Market Square Building
213 Market Street
Harrisburg, PA 17101
Attorneys for Defendants
CUMBERLAND
PARTNERS, a
Pennsylvania limited
partnership,
Plaintiff
Vo
OLYMPIC REALTY
and DEVELOPMENT
CORPORATION, aJk/a
OLYMPIC REALTY &
DEVELOPMENT CORP.,
a New York corporation,
IN THE COURT OF COMMON PLEAS OF
CUMBERLAND COUNTY, PENNSYLVANIA
CIVIL ACTION - EQUITY
and :
H.C. HOLDINGS :
LIMITED :
PARTNERSHIP, a :
Pennsylvania limited :
partnership, :
Defendants :
NO. 99-5198 EQUITY TERM
IN RE: DEFENDANTS' MOTION FOR
JUDGMENT ON THE PLEADINGS
BEFORE BAYLEY and OLER, JJ.
OPINION and ORDER OF COURT
OLER, J., November 21, 2000.
In this equity case, Plaintiff seeks (a) to enforce an option to purchase real
estate and (b) to declare and enforce an easement. For disposition at this time is a
defense motion for judgment on the pleadings.
For the reasons stated in this opinion, the motion for judgment on the
pleadings will be denied.
STATEMENT OF FACTS
The allegations of Plaintiff's complaint may be summarized as follows:
Plaintiff was the owner of a certain shopping center in Hampden Township,
Cumberland County, Pennsylvania, and Defendant Olympic Realty and
Development Corporation was the purchaser of property contiguous to it.
Defendant Olympic planned to build a shopping center on its land. In
furtherance of this plan, it agreed to give Plaintiff rights to buy some of its land
and to provide an easement over its land favorable to Plaintiff, and Plaintiff agreed
to provide an easement over its property favorable to Defendant Olympic. The
easements were for vehicular traffic.
In a "Memorandum of Agreement" dated October 16, 1995, "effective as of
December 21, 1995," between Plaintiff and Defendant Olympic, it was recited that
the parties had reached an agreement whereby cross easements xvould be granted
between them and whereby plaintiff would have options to purchase two pieces of
land owned by Defendant Olympic.~ The Memorandum of Agreement made
reference to a prospective "Declaration of Condominium" which would apply to
Defendant Olympic's land; the declaration was to specifically reserve, for
purposes of the transfer to Plaintiff, the two pieces of land mentioned above.2
In an "Agreement To Provide for Cross Easements and Options," dated
December 21, 1995, between Plaintiff and Defendant Olympic et al., it was recited
that "Olympic Realty has agreed to sell three (3) acres of [Olympic's land]; and
(2) [sic] grant an option to Cumberland Partners to purchase the remaining
unneeded acreage in [a certain] eight (8) acre portion of [Olympic's land] .... ,3
The so-called eight-acre portion of Defendant Olympic's land was a strip
which happened to extend behind Plaintiff's property; this strip included the three-
acre piece referred to in the recital and the second (approximately 2.6-acre) piece
referred to in the recital.4 The main paragraph in the agreement relating to these
two pieces read as follows:
Plaintiff's complaint, Exhibit B.
Plaintiff's complaint, paragraph 20 and Exhibit B.
Plaintiff's complaint, Exhibit A.
See PlaintiWs complaint, Exhibit A.
2
5. Rights of Option. Subject to the conditions contained
herein, Olympic Realty hereby irrevocably grants to
Cumberland Partners the exclusive option rights effective the
date of Settlement on the [land being purchased by Olympic
Realty] for a period which shall expire 36 months from the
later of (i) settlement on the [land being purchased by Olympic
Realty], or (ii) written notice by Olympic Realty to
Cumberland Partners of the amount of remaining acreage
available for [the second, approximately 2.6 acre piece referred
to in the recital] as defined in Paragraph 5(b) below:
(a) [with respect to the three-acre piece
mentioned above], to purchase for the sum of
Ten ($10.00) Dollars, a two (2) acre area ("Tract
1") as further described in Exhibit "F" attached
hereto and made a part hereof and one (1) acre
area ("Tract 2") as further described in Exhibit
"G'"', attached hereto and made a part hereof,
both within the eight acre area as shown on
Exhibit "A", to be conveyed in one lot to
Cumberland Partners as a lot addition, provided,
however, that such option shall only be effective
if the conditions in paragraph 1 [relating to
consummation of the purchase by Olympic] are
fulfilled. Notwithstanding the above the sixty
(60) day option period for Tract 1 and Tract 2
shall be extended an additional day for each day
that settlement is scheduled for the purchase of
the [land being purchased by Olympic Realty]
beyond 90 days from the date of this Agreement.
(b) [with respect to the second piece
mentioned above,] to purchase at a price of Fifty
Thousand ($50,000.00) Dollars per acre the
balance of the eight acre area (and no less than
this amount unless said purchase is for the
construction of a retention/detention basin)
("Tract 3") as further described in Exhibit "H"
attached hereto and made a part hereof, not
needed by Olympic Realty as shown on Exhibit
"A" (the "Remaining Acreage Option").
Olympic Realty shall have the right to regrade
and remove fill from Tract 3 for the use and
development of the [land being purchased by
3
Olympic Realty], whether or not Cumberland
Partners exercises its option to purchase Tract 3,
for up to twelve (12) months after the date of
settlement on the [land being purchased by
Olympic Realty].
For purposes of this paragraph the "balance
of the eight acre area not needed by Olympic
Realty" shall mean the remaining property not
subject to the options set forth in paragraphs 5(b)
and (c), which are determined at the sole
discretion of Olympic Realty, not required for
development of the shopping center on the [land
being purchased by Olympic Realty] and, if
developed, would not either (1) increase the
development costs, directly or indirectly, of the
[land being purchased by Olympic Realty]"; or
(2) require any municipal approvals (other than
subdivision approvals) or variances, however, in
no event shall Cumberland Partners be entitled to
less than the three acre area described in
subparagraph (a) above.5
This agreement also contained the following paragraph regarding the size
of the projected shopping center on the land being purchased by Olympic Realty:
3. Warranty. Olympic Realty warrants that the retail
buildings as shown on Exhibit "A" for the [land being
purchased by Olympic Realty] will be built in the approximate
location shown thereon and will contain an area of
approximately 250,000 square feet. This warranty is given
solely for informational purposes and as necessary for the
granting of the cross-easements and options contained herein
and may not be relied upon as accurate for any other purpose.
The parties have agreed that Exhibit "A" shall contain a "no
building area'?
Plaintiff would not have entered into the agreement had it not received the
option to buy the second piece mentioned above.7 Defendant Olympic proceeded
Plaintiff's complaint, Exhibit A.
Plaintiff's complaint, Exhibit A.
Plaintiff's complaint, paragraph 26.
4
to construct a shopping center, conforming to the warranty as to size, on its land.8
Notwithstanding this, however, when Plaintiff attempted to exercise its option to
buy the second piece mentioned above Defendant Olympic advised that it had
"determined, in its sole discretion, that the [piece subject to the option was]
needed by Olympic Realty for the development of the shopping center.''9 There
was, therefore, according to Defendant Olympic, "no land left to sell to
[Plaintiff].''~°
Plaintiff did succeed in exercising its option to buy the first (three-acre)
piece mentioned above.~ However, its rights in a certain easement which
benefited this piece (unrelated to the cross easements mentioned above) was not
being recognized by the defendant owner of the servient tenement, in that the
easement was being relocated without Plaintiff's consent.
The defense response to Plaintiff's claim of a right to purchase the
approximately 2.6 acre piece was (a) that, by the terms of the agreement,
Defendant Olympic enjoyed unlimited discretion to deem the piece unavailable to
Plaintiff, it exercised this discretion, and its exercise was in fact reasonably based,
and (b) that a condition of Plaintiff's right to purchase the piece-the absence of
increased development costs and any need for a zoning variance--did not exist.~2
The defense response to Plaintiff's claim of a deprivation of its rights under an
easement was that more recent easements rendered the earlier easement
unimportant.~3 Plaintiff's reply contested the validity of these assertions. 14
Plaintiff's complaint, paragraph 27.
Plaintiff's complaint, Exhibit D.
l0 Plaintiff's complaint, Exhibit D.
~ PlaintiWs complaint, paragraph 15.
~2 Defendant's amended answer with new matter, paragraphs 43-53.
~3 Defendant's amended answer with new matter, paragraphs 56-60.
~4 PlaintiWs reply to Defendants' new matter.
DISCUSSION
Under Pennsylvania Rule of Civil Procedure 1034, "[a]fter the relevant
pleadings are closed, but within such time as not to unreasonably delay the trial,
any party may move for judgment on the pleadings." A motion for judgment on
the pleadings is treated similarly to a preliminary objection in the nature of a
demurrer. Del Quadro v. City of Philadelphia, 293 Pa. Super. 173, 176, 437 A.2d
1262, 1263 (1981).
Only the pleadings and any documents properly attached to them may be
considered. Hammerstein v. Lindsay, 440 Pa. Super. 350, 356, 655 A.2d 597, 601
(1995). All well-pleaded facts of the party objecting to the motion "are to be
viewed as true, but only those facts specifically admitted by the objecting party
may be considered against him." E-Z Parks, Inc. v. Philadelphia Parking
Authority, 110 Pa. Commw. 629, 633-34, 532 A.2d 1272, 1275 (1987), appeal
denied, 519 Pa. 656, 546 A.2d 60 (1988).
A motion for judgment on the pleadings should be granted only in cases
where the pleadings demonstrate that no material facts are at issue and the law is
so clear that a trial would be fruitless. Hammerstein v. Lindsay, 440 Pa. Super.
350, 356, 655 A.2d 597, 601 (1995).
With respect to interpretation of contracts, the Pennsylvania Superior Court
has stated the following general principle:
In construing a contract, the intention of the parties is
paramount and the court will adopt an interpretation which
under all the circumstances ascribes the most reasonable,
probable, and natural conduct of the parties, bearing in mind
the objects manifestly to be accomplished.
Metzger v. Clifford Realty Corp., 327 Pa. Super. 377, 385,476 A.2d 1, 5 (1984).
A more specific principle is that an interpretation of a provision in a
contract which would render the provision illusory in nature is not favored. See
Chester City School Authority v. Aberthaw Construction Co., 460 Pa. 343, 354,
333 A.2d 758, 764 (1975).
6
In the present action, a careful review of the pleadings has led the court to
conclude that Defendants' motion for termination of the case at this point should
be denied. With respect to Plaintiff's cause of action based upon its option to
purchase a piece of land "not required" for development, several factors militate
against a summary disposition of the claim. First, the intended import of the
agreement's language as to Defendant Olympic's discretion, when considered in
conjunction with Defendant's "warranty" as to the extent of its planned
development, the reservation of land in the Declaration of Condominium to
accommodate exercise of the option, and the presumption that the parties did not
intend the option to be merely illusory, is the subject of reasonable dispute.
Second, Defendant's position that, to the extent relevant, its exercise of discretion
was in fact reasonable and in good faith is not self-evident from the current record.
Third, Defendant's position that other prerequisites to exercise of the option--the
absence of an increase in development costs and any need for a zoning variance
is also dependent upon a more developed record than presently exists.
With respect to Plaintiff's cause of action based upon a violation of its
rights under an easement, the pleadings similarly can not be characterized as
dispositive. They will not support a holding at this early stage of the case that trial
would be fruitless.
For the foregoing reasons, the following order will be entered:
ORDER OF COURT
AND NOW, this 21st day of November, 2000, upon consideration of
Defendants' motion for judgment on the pleadings, and for the reasons stated in
the accompanying opinion, the motion is denied.
BY THE COURT,
/s/J. Wesley Oler, Jr.
J. Wesley Oler, Jr., J.
7
Michael J. Clement, Esq.
WISLEY, PEARLSTINE, TALONG,
CRAIG, GARRITY & POTASH, LLC
Office Court at Walton Point
484 Norristown Road
Blue Bell, PA 19422
Attorney for Plaintiff
Mark D. Bradshaw, Esq.
Ronald M. Lucas, Esq.
One South Market Square Building
213 Market Street
Harrisburg, PA 17101
Attorneys for Defendants