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MCKNIGHT-SEIBERT SHOPPING CENTER v. NATIONAL TEA CO. (02/15/79)

decided: February 15, 1979.

MCKNIGHT-SEIBERT SHOPPING CENTER, INC.
v.
NATIONAL TEA CO., T/D/B/A LOBLAW FOOD STORES, APPELLANT



No. 379 April Term, 1978, Appeal from the Order of the Court of Common Pleas of Allegheny County, Civil Division, No. 218 January Term, 1973, Issue No. 84736 Dated November 16, 1977

COUNSEL

Gerald C. Paris, Pittsburgh, for appellant.

Guy L. Warman, Pittsburgh, for appellee.

Cercone, Wieand, and Hoffman, JJ.

Author: Wieand

[ 263 Pa. Super. Page 293]

This is a dispute between parties to a shopping center lease. Following trial without jury, the trial court concluded that the tenant, National Tea Co., hereinafter "Lessee", had breached its lease agreement and thereafter withheld possession of the demised premises wrongfully. Damages, measured by a fair rental value determined to be in excess of the rental required by the lease, were awarded to McKnight-Seibert Shopping Center, Inc., hereinafter "Lessor". Lessee's exceptions were dismissed, and judgment was entered in favor of Lessor and against Lessee for $246,106.50. Lessee appealed.*fn1

The subject of the lease was Storeroom No. 7, the largest storeroom in a strip type, neighborhood shopping center developed by Lessor in Ross Township, Allegheny County.

[ 263 Pa. Super. Page 294]

The lease, executed on or about April 1, 1956, provided for a fixed monthly rental of $2,300. The initial term was for 12 years, but the lease contained options permitting Lessee to renew for two additional terms of 5 years each. Lessee, a national chain, continued to maintain and operate a supermarket until August 5, 1972, when financial reverses caused it to close all stores in its chain. Before closing its stores, Lessee had negotiated a preliminary agreement with Fox Grocery Company for the purchase of Lessee's chain and the assignment of many existing leases, including the lease for Lessor's store. Lessor was notified of the intended assignment of the lease and the temporary closing of Lessee's supermarket to achieve the transfer. Lessor caused Lessee to be notified on August 9, 1972 that a cessation of operations was a default in the terms of the lease and demanded that the store be reopened within ten days or the lease would be forfeited.

Lessee's final settlement with Fox Grocery Company, scheduled for August 8, 1972, came under attack from another source. At the suit of Local 590 of the Amalgamated Meat Cutters and Butcher Workmen of North America, the bargaining representative for Lessee's meat department employees, the United States District Court for the Western District of Pennsylvania issued an order which, inter alia, enjoined Lessee, "pending final and binding arbitration . . . from consummating any contract for the sale of the stores covered by the labor agreement with [the union] which does not contain a clause making said contract binding" upon the purchaser. Whether Lessee's sale of its chain of stores without incorporating its collective bargaining agreement with the union constituted an unfair labor practice was subsequently submitted to arbitration and, on November 28, 1972, was decided in favor of Lessee. The sale of its chain to Fox Grocery Company, including an assignment of the McKnight-Seibert Shopping Center lease, was consummated on December 18, 1972.

Meanwhile, the store remained closed, and on August 31, 1972, Lessor notified Lessee that the lease was in default

[ 263 Pa. Super. Page 295]

    and demanded possession of the demised premises. Lessee rejected the demand. It tendered all monthly rentals as and when they came due and continued to use the storeroom for storage purposes. Lessor rejected the rental payments and ...


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