No. 74 March Term, 1979, Appeal from the Order of the Superior Court of Pennsylvania, dated November 17, 1978, at No. 688 April Term, 1978, affirming the Order of the Court of Common Please of Washington County, Civil Division, at No. 390 August Term, 1977 A.D.
M. E. Kusturiss, John P. Liekar, Jr., Canonsburg, for appellant.
Milton D. Rosenberg, Rosenberg, Sewak & Pizzi, Charles L. Bell, Jr., Washington, for appellee.
Eagen, C. J., and O'Brien, Roberts, Nix, Larsen, Flaherty and Kauffman, JJ.
Tenant William Werner (appellant) seeks to open both a confessed money judgment and a confessed judgment of possession entered in favor of landlords Carlo and Mildred Teodori (appellees). Primarily at issue on this appeal is whether landlords' breach of the lease's "non-competition" clause provides tenant a defense to the landlord's actions for sums due and in ejectment. We are persuaded by our established caselaw, e. g., McDanel v. Mack Realty Co., 315 Pa. 174, 172 A. 97 (1934), and modern authority, e. g., Restatement (Second) of Property, Landlord and Tenant (1977), that tenant has a valid defense.
Tenant leases a 1500 square foot retail storeroom in Donaldson's Crossroads Shopping Center where he operates his own retail jewelry business and gift shop. The parties' most recent written lease agreement, executed in June of 1973, provides for a five-year term of occupancy beginning August 1, 1973 and ending July 31, 1978. In the parties' "non-competition" clause, landlords agree not to "lease or operate as owner any space in the shopping center or any extension thereof primarily as a jewelry or gift shop."
In addition to a monthly base payment of $437.50, tenant annually is to pay to landlords five percent of the gross proceeds from jewelry sales and ten percent from gifts. Tenant also is to pay ten cents per square foot annually for maintenance of outside areas as well as increases in taxes owed by landlords and all charges for gas, water, sewer use, steam, electricity, light, heat or power, and telephone. Tenant is to render an annual "certified statement" showing the total gross proceeds of all business done upon the premises during the preceding year. Tenant also agrees, "on every default of payment of rent," or "on any and every breach of covenant or agreement," to "empower any attorney of any court of record" to appear for tenant and confess judgment
against him. By the terms of the instrument this power of confession extends to an action for the sum due and/or an action in ejectment.
On September 2, 1977, eleven months before expiration of the stated term of the lease, landlords instituted a proceeding against tenant for entry of judgments by confession, seeking both a "specific amount due" and ejectment. Landlords based their request for both judgments on averments that tenant owed them monthly base payments, maintenance charges and utilities, and increased taxes. Landlords additionally claimed that tenant failed to provide landlords with a timely certified statement of gross proceeds and failed to pay the percentage of proceeds owing. Acting pursuant to the warrant of attorney contained in the lease agreement, counsel appeared for tenant ...