BSRE Holdings, LLC, v. Kenneth Kreitz

BSRE Holdings, LLC, v. Kenneth Kreitz

Civil Action-Property Law-Landlord Tenant-Lease Agreement-Holdover of Possession following Termination of Lease Agreement-Ejectment-Breach of Contract-Summary Judgment-Damages

BSRE Holdings, LLC, (“Plaintiff”) is the title owner of property where Kenneth Kreitz (“Defendant”) has lived at times with and at other times without the permission of Plaintiff.  Defendant remained at the property following the end of a lease term without paying rent.  Following eviction proceedings from which Defendant filed an appeal, Plaintiff filed a Complaint seeking possession of the property and damages under a Breach of Contract theory.  Plaintiff has filed a Motion for Summary Judgment after Defendant filed an Answer to the Complaint. 

1.  The moving party in a motion for summary judgment bears the burden of demonstrating that no genuine issue of material fact exists and it is entitled to judgment as a matter of law. 

2.  A lease is controlled by the principles of contract law.

3.  To prove a breach of a contract, a party must establish the existence of a contract, including its essential terms, a breach of a duty imposed by the contract and resultant damages. 

4.  In an ejectment action, the plaintiff has the burden of demonstrating by a preponderance of the evidence that it is entitled to immediate possession of real property and defendant wrongly is in possession of the property. 

5.  If a landlord has superior title against a tenant, the landlord’s remedy is by an action in ejectment. 

6.  When a tenant remains in possession of property after termination of a lease, the landlord has the choice of treating the tenant as a trespasser subject to summary ejectment, a tenant by sufferance or a holdover tenant. 

7.  Where Defendant acknowledged that the lease term ended and he remained at the property trying to negotiate a new lease with Plaintiff that never came to fruition, the prior lease specified that any renewal must be in writing signed by the parties and there is no record of a new lease agreement between the parties, the record reflects that Plaintiff is entitled to immediate possession of the property and Defendant wrongly is in possession of the property such that Plaintiff is entitled to summary judgment as it relates to the action in ejectment.

8.  Where material issues of fact remain regarding Plaintiff’s request to collect damages, summary judgment is not appropriate as to the issue of damages.   

L.C.C.C.P. No. 2023-01114, Opinion by Bradford H. Charles, Judge, February 9, 2024.

IN THE COURT OF COMMON PLEAS OF LEBANON COUNTY

PENNSYLVANIA

CIVIL ACTION – LAW

BSRE HOLDINGS, LLC.                   :

                        APPELLEE                             :

                                                                           :

            v.                                                            :              NO. 2023-01114

                                                                           :

KENNETH KREITZ                                      :

                        APPELLANT                          :

                                                            ORDER OF COURT

            AND NOW, this 9th day of February 2024, in accordance with the following Opinion, the Appellee’s Motion for Summary Judgment in Ejectment is GRANTED.  Possession of 609 South Fourth Street, Lebanon, PA, is awarded to Appellee.  The Appellant is directed to vacate the property located at 609 South Fourth Street, Lebanon, Pennsylvania within thirty (30) days.  If the Appellant refuses or fails to vacate said premises within thirty (30) days, leave is GRANTED for the Appellee to obtain assistance of the Lebanon County Sherrif’s Office to evict the Appellant and all others living there at his discretion from said property.  To the extent that Appellee’s Motion for Summary Judgment seeks an award of money, said Motion is DENIED.  Moreover, any request to recover costs and attorney fees from the Appellant is DENIED.  Issues pertaining to the award of monetary amounts will be determined at trial.

            A Status Conference regarding BSRE’s claim for monetary damages will be conducted on the 4^th day of March, 2024, at 3:30pm.  Counsel may appear at the Status Conference in person or via telephone.  If counsel wishes to appear by telephone, counsel should notify the Judicial Assistant of the undersigned at patricia.daubert@lebanoncountypa.gov .

BY THE COURT,

                                                                        ______________________________, J.

                                                                        BRADFORD H. CHARLES

BHC/tjb

cc:        Court Administration

            Cory Leshner, Esq. // 100 N.10th St., Harrisburg, PA 17101

Christopher A. Sarno, Esq. // 408 West Chestnut St., Lancaster, PA 17603

IN THE COURT OF COMMON PLEAS OF LEBANON COUNTY

PENNSYLVANIA

CIVIL ACTION – LAW

BSRE HOLDINGS, LLC.                   :

                        APPELLEE                             :

                                                                           :

            v.                                                            :              NO. 2023-00089

                                                                           :

KENNETH KREITZ                                      :

                        APPELLANT                          :

APPEARANCES:

CHRISTOPHER SARNO, ESQ.     FOR APPELLEE

CORY LESHNER, ESQ.                                         FOR APPELLANT

Opinion, Charles, J., February 9, 2024

            Before us today is the Appellee’s Motion for Summary Judgment in Ejectment.  This is the            second eviction process between the parties from the same property that we have undertaken in less than two years.  While this Court is not pleased with either party that they have unsettled that which was clearly a settled matter, we write this Opinion in support of our decision to grant BSRE yet another eviction of Appellant from 609 S. Fourth Street in South Lebanon Township.

1. FACTUAL AND PROCEDURAL BACKGROUND

            At all times pertinent hereto, BSRE Holdings, LLC (hereafter BSRE) has been the title owner of property located in South Lebanon Township at 609 S. Fourth Street, Lebanon, PA (hereafter PROPERTY).  Kenneth Kreitz (hereafter KREITZ) has lived in PROPERTY for years, sometimes with the permission of BSRE and sometimes not.

            Possession of PROPERTY was an issue that was first presented to this Court in 2021.  On August 9, 2022, we awarded BSRE possession of PROPERTY pursuant to a Motion for Summary Judgment.  We directed KREITZ to vacate PROPERTY within thirty (30) days.  KREITZ appealed our decision.

            Apparently, BRSE and KREITZ reached a settlement of their dispute via a new lease agreement by which KREITZ agreed to pay BSRE $1,500 per month in return for possession of the property.  The lease commenced on October 14, 2022, and ended on July 31, 2023.

            Predictably, KREITZ remained in the property after July 31, 2023.  According to BSRE, KREITZ paid nothing in rent.  As a result, BSRE filed an MDJ eviction proceeding and was awarded a judgment of possession.  On August 30, 2023, KREITZ filed an appeal to this Court.  On September 15, 2023, BSRE filed a Complaint seeking possession of PROPERTY and damages under a Breach of Contract theory.  On October 10, 2023, KREITZ filed an Answer with New Matter.  On November 21, 2023, BSRE filed a Motion for Summary Judgment, which is now before this Court.

II.        LEGAL PRINCIPLES

1. Motion for Summary Judgment

            In reviewing a motion for summary judgment, the Court must determine whether there is any material fact in dispute.  See, Pa.R.C.P. 1035.2. Summary judgment may be entered if the pleadings, depositions, answers to interrogatories, and admissions on file, together with any affidavits, show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law. The moving party bears the burden of demonstrating that no genuine issue of material fact exists and that it is entitled to judgment as a matter of law. Furthermore, this Court must view the record in the light most favorable to the non-moving party. Amabile v. Auto Kleen Car Wash, 376 A.2d 247, 249–50 (Pa.Super. 1977); Bowman v. Sears, Roebuck & Company, 369 A.2d 754, 756 (Pa.Super. 1976); Husak v. Berkel, 341 A.2d 174, 177 (Pa.Super. 1975). Summary judgment is to be entered only in the clearest of cases where there is no doubt as to the absence of a triable issue of fact. Granthum v. Textile Machine Works, 326 A.2d 449, 451 (Pa.Super. 1974). 

• Breach of a Lease Agreement

“[A] lease is in the nature of a contract and is to be controlled by principles of contract law.” Pugh v. Holmes, 405 A.2d 897, 903 (Pa. 1979).  To prove a breach of contract, a party must establish the following: “(1) the existence of a contract, including its essential terms, (2) a breach of duty imposed by the contract, and (3) resultant damages.” McCausland v. Wagner, 78 A.3d 1093, 1101 (Pa. Super. 2013).  If a contract is clear and unequivocal, its meaning must be determined by its contents alone. N.E.A. Cross, Inc. Nat’l Fuel Gas Supply Corp., 600 A.2d 228, 229 (Pa.Super. 1991), appeal denied, 608 A.2d 31 (Pa. 1992). 

“The paramount goal of contractual interpretation is to ascertain and give effect to the intent of the parties. In determining the intent of parties to a written agreement, the court looks to what they have clearly expressed, for the law does not assume that the language of the contract was chosen carelessly.” Id. (quoting PBS Coals, Inc. v. Burnham Coal Co., 384 Pa.Super. 323, 558 A.2d 562 (1989), appeal denied,  568 A.2d 1248 (Pa. 1989))

• Ejectment

 In a Pennsylvania ejectment action, the plaintiff has the burden to demonstrate by a preponderance of the evidence that it is entitled to immediate possession of real property and that defendant is wrongly in possession of the property. Doman v. Brogan, 592 A.2d 104, 108 (Pa.Super. 1991); Hallman v. Turns, 482 A.2d 1284, 1287 (Pa.Super.1984).  If a landlord has superior title against a tenant, the landlord’s remedy is by an action of ejectment. 68 P.S. § 250.511; Bannard v. New York State Natural Gas Corp., 172 A.2d 306 (Pa. 1961). 

The Pennsylvania Supreme Court stated in the case of Frontage Inc. v. Allegheny County, 162 A.2d 1 (Pa. 1960), “This Court had occasion in Octoraro Water Co. v. Garrison, 114 A.638, 640 (Pa. 1921) to define ‘cloud on title’ as a title or encumbrance apparently valid, but in fact invalid.” Id at 6.  Under normal landlord and tenant law, the mere existence of a cloud on title is not a breach of the lease. The breach does not occur until and unless the lessee is evicted by a holder of paramount title. Derrickheim Co. v. Brown, 451 A.2d 477, 479 (Pa.Super. 1982), citing Restatement Second, Property, section 4.3 (1977); Strong v. Nesbitt, 110 A. 250 (Pa. 1920).  

• The Landlord’s Treatment of a Tenant Who Remains on the Premises After the Lease Has Expired

When a tenant remains in possession after the termination of a lease, the landlord has the choice of treating such a tenant as a trespasser, subject to summary ejectment; as a tenant by suffrance; or as a holdover tenant. Reading Terminal Merchants Ass’n by Asteris v. Sammuel Rapport Associates, 456 A.2d 552, 556  Pa.Super. 1983) (citing. Witmer v. Exxon Corp., 434 A.2d 1222 (Pa.1981)).  The Court in Reading Terminal declared, “We also reject Tenants’ contention that Landlord’s acceptance of rent constitutes acquiescence in a continuation of the old lease during the hold over.”. Id at 557.   In the case of Clariton Corp v. Geo-Con, Inc., 635 A.2d 1058 (Pa.Super. 1993) the Lessor continued to accept the monthly rental rate set forth in the expired lease.  The Lessor and Tenant were involved in negotiations for a new lease.  Despite the fact that there was an attempt to have a new lease drafted, the trial court refused to hold that Tenants had agreed to another lease.  The Superior Court affirmed the decision of the Trial Court.  In doing so it quoted the Court in  Young Men’s Christian Association v. Harbeson, 180 A.2d 916, 918 (Pa.1962) which stated,  “[I]t is established law that mere continuance in possession and payment of rent does not of itself constitute a renewal of the lease with all its provisions.”.  See also  Peterson v. Schultz, 58 A.2d 360 (Pa.Super. 1948) (the fact that tenant has paid rent after expiration of term and the landlord has accepted it is not an affirmance of the lease for a new year but merely evidence of affirmance which may be rebutted by proof that such was not the intention of the parties).

• KREITZ’ Claims – Self-Help Remedies, Unclean Hands, Damage to Personal Property

It was tempting to entitle this section “Taking Out the Trash”. KREITZ raised issues in his New Matter that are either bald assertions, legal conclusions or are contradictory to KREITZ’ prior admissions.  Not surprisingly, none of these arguments made it to KREITZ’ Brief in Opposition to BSRE’s Motion for Summary Judgment. 

Three of the issues raised by KREITZ we will dispense with in rapid fashion because they are single sentence allegations that are not supported in any of the parties’ pleadings or exhibits.  One assertion is that BSRE engaged in self-help remedies to take the property.  It is true that a landlord may not undertake a “self-help” eviction to repossess a leased premise from a holdover tenant (see e.g. O’Brien v. Jacon Engle Foundation, Inc., 47 Pa. D. & C.3d 557 (Cumberland Co. Ct. of Cmn. Pls. 1987)).  However, as BSRE pointed out in its Reply to New Matter, the eviction was sought through the Magistrate’s Office and no “self-help” methods were employed by BSRE.  KREITZ’ second argument is that BSRE’s “hands are unclean”.  We can only guess that this was meant to tie back into the “self-help” argument, because there was certainly nothing else presented to this Court to support this claim.  KREITZ has also claimed that BSRE damaged his personal property. No evidence was offered about what the personal property in question was or how BSRE damaged it.  BSRE denied that it damaged the property, because it has never entered the premises or came in contact with any of KREITZ’ personal property.  This is a disputed issue of fact that could implicate the issue of damages, but not possession.

As it relates to entitlement to possession of PROPERTY, this Court is displeased with what appears to be an attempt to throw legal principles into a legal pleading to see if any of them happen to stick.  We find it especially irksome since the last time these parties were before this Court, KREITZ did exactly the same thing.  In our Order entered on August 9, 2022, we noted, “In addition KREITZ filed a “New Matter” in which he set forth several legal conclusions but no facts to support those legal conclusions.”.

• Attorney Fees

Under general common law principles, one litigant is not generally permitted to recover attorney’s fees from another.  This has become known as the so-called “American Rule” by which each party pays his/her counsel fees regardless of who wins and who loses.  See, e.g. Mosaica Academy Charter School v. Com. Dept. of Education, 813 A.2d 813. The American Rule, applicable in Pennsylvania, states that a litigant cannot recover attorney fees from the adverse party “unless there is express statutory authorization, a clear agreement of the parties, or some other established exception.” Mosaica at 822, citing Lavelle v. Koch, 617 A.2d 319, 323 (Pa. 1992). 

One exception to the so-called “American Rule” exists when parties enter into an agreement that provides for a party in breach thereof to pay the other party’s counsel fees.  Trizechahan Gateway, LLC. V. Titus, 967 A.2d 474 (Pa. 2009).  In Trizechahan, the lease term related to the award of attorney fees stated, “The Tenant agrees to pay a reasonable attorney’s fee if legal action is required to enforce performance by Tenant of any condition, obligation or requirement hereunder.”.  The Pennsylvania Supreme Court found this language to evidence the clear intention of the parties that the Landlord be reimbursed for attorney fees if it was forced to go to litigation.  In doing so the Supreme Court stated, “As noted, this represents a valid exception to the American Rule.” Id at 484.

Even when an agreement as outlined above exists, it can still be declared void if the court views the counsel fee provision to be a “contract of adhesion.”  In the case of Robson v. EMC Ins. Cos., 785 A.2d 507, 510 (Pa.Super.2001) (quoting Black’s Law Dictionary (7th ed.1999)), the Superior Court stated,  “An adhesion contract is defined as a ‘standard form contract prepared by one party, to be signed by the party in a weaker position, [usually] a consumer, who has little choice about the terms.’”.   However, we do not find that the agreement between KREITZ and BSRE constitutes such a contract of adhesion.  Here, there is a prior history of eviction litigation.  BSRE wanted to protect itself against future eviction litigation by incentivizing KREITZ to avoid such a situation.  The provision in the agreement calling for payment by KREITZ of BSRE’s counsel fees represents exactly this type of incentive.  Given the history, we cannot and will not declare the counsel fee agreement signed by both parties to be void. 

III.   ANALYSIS

KREITZ is well aware of the essential facts of the claim.  As noted, these same parties were before this Court within the last two years, for essentially the same thing.  The only difference this time is that BSRE argues that KREITZ should be evicted because he breached their written lease agreement.  It should be crystal clear to KREITZ that he is facing an eviction from the property from which he was legally evicted before.  Moreover, KREITZ also acknowledged that the lease term ended and that he remained on the PROPERTY trying to strike a new deal for a lease (even while his rent was in arrears on the original lease).  

In the Residential Lease (Ex. C) signed by the parties on the first page under the section “Rental Term”, the term date is written as October 14, 2022 to July 31, 2023.  Under “Renewal Term” in that same section, the box is checked which states, “The Lease will TERMINATE on the End Date unless extended in writing” (emphasis not added).  It is very clear to this Court that the BSRE did not intend to extend the lease without a new agreement memorialized between the parties.  The record is void of any such agreement.

KREITZ also asserted that the BSRE’s title is clouded and therefore BSRE has no standing to pursue an action in ejectment.  KREITZ has not identified the “cloud” on the title.  Moreover, KREITZ’ assertion contradicts our finding on August 9, 2022, that BSRE had established that it is the title owner of the property.  Furthermore, we agree with BSRE that there is no question of whether it has clear title because it was part of the parties’ prior settlement agreement. 

 KREITZ also averred that BSRE cannot prove that it possessed a “superior title.” We will give KREITZ the benefit of the doubt and assume that he is arguing that he has superior title because of his assertion that a month-to-month tenancy was created by BSRE’s conduct.  

In the pleadings, KREITZ admitted that the lease term expired on July 1, 2023.  (KREITZ’s Answer ¶¶ 15 & 22).  KREITZ provided documentation of an email chain between the parties that negotiations were taking place to extend the lease period (Ex. A).  The last communication was dated July 26, 2023, and that was an email from Attorney Leshner to the Property Manager for the PROPERTY.  It reads, “In follow up from last week, Mr. Kreitz would like to extend the lease agreement of an additional period as you suggested.  Do you have a time period that you were thinking of for the extension?”.   There was no reply from BSRE included in the Exhibit.  BSRE admitted that there was email communication between Counsel concerning a possible lease extension as late as September 1, 2023.  However, it contended that those negotiations ceased, and that a potential settlement negotiation does not translate to a renewed lease.  (Memorandum of Law in Support of BSRE’s Motion for Summary Judgment at pg. 4).  We agree.  Even when we view the above facts in favor of KREITZ as the non-moving party, we cannot agree with him that BSRE’s conduct created a new lease.  By receiving rent that was due and negotiating with KREITZ after the lease terminated, BSRE did not create a new lease of a month-to-month tenancy.  Mere receipt of funds by an owner from an occupant will not automatically suffice to create a landlord-tenant relationship.  This is especially true given that a prior written lease contract specifies that any renewal must be in writing signed by both parties. 

Our review of the record convinces us that no material issue of fact exists as to the following:

(1) BSRE owned PROPERTY;

(2) The terms of the lease agreement entered into between KREITZ and BSRE ended on July 31, 2023;

(3) No new written lease was entered into between the parties;

(4) To the extent that KREITZ retained possession of PROPERTY after July 31, 2023, he did so without authority or legal justification.

Based upon the above facts, we conclude that BSRE is entitled to a Judgment of Ejectment. 

            While we will grant BSRE possession of PROPERTY, that does not end our inquiry.  By virtue of its breach of contract claim and its request for counsel fees, BSRE has also placed the potential for an award of money at issue.  The record is far less clear as it relates to BSRE’s purported entitlement to monetary damages.  As it relates to BSRE’s request for damages, there is much that we do not know.  For example, we do not know the reasonable rental value of PROPERTY so that we could impose an obligation upon KREITZ to pay rent for the period of time he occupied the premises.  We are not even completely sure how long KREITZ continued to occupy the premises.  Moreover, KREITZ has effectively sought a set-off due to damages that BSRE purportedly caused to his personal property.  In short, material issues of fact exist as to monetary damages regarding BSRE’s breach of contract claim.

As to the request by BSRE for costs and attorney fees, there is a term in the Residential Lease Agreement at page 5, under “Ending Lease” that reads as follows:

“23. LANDLORD REMEDIES IF TENANT BREACHES LEASE

(A) If Tenant breaches Lease for any reason, Landlord’s        remedies may include any or all of the following:

1. Taking possession of the property by going to court to evict Tenant.  Tenant agrees to pay Landlord’s legal fees and reasonable costs, including the cost for Landlord’s agent to attend court hearings.”

That term, per se, is clear and unequivocal. By the terms of the contract he signed, KREITZ is responsible for reimbursing BSRE for counsel fees and expenses related to any future need for eviction litigation.  The matter now before us is precisely such litigation. 

III.       CONCLUSION

It is evident that KREITZ is trying desperately to hold on to a property that he lost through unfortunate circumstances.  He was fortunate to get a second bite at the apple when BSRE chose not to evict him and let him pay rent with the goal that he would repurchase the property.  Sadly, when given another chance he was not able to keep his rent payments current.  It is time for KREITZ to move on and to figure out what his next address will be.  It is also time for BSRE to move on from KREITZ as a tenant and to figure out what to do next with the PROPERTY.  We do not want to see these parties before us on the matter of eviction again.

Based on the analysis of the facts and law stated above, this Court finds that BSRE has met its burden of showing that no genuine issue of material fact exists to the claim that KREITZ has breached the lease agreement and has remained on the PROPERTY after the termination of the lease.   BSRE is entitled to judgment as a matter of law, and we will grant its Motion for Summary Judgment as it relates to Ejectment. 

To the extent that BSRE’s Motion for Summary Judgment includes a request for counsel fees and other monetary damages, said Motion will be denied.  Material issues of fact remain regarding BSRE’s request to collect damages from KREITZ.  Those issues will have to be addressed at a trial.  To begin the planning for a trial, we will schedule a Status Conference.