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PRINCETON SPORTSWEAR CORPORATION v. H & M ASSOCIATES (03/27/86)

decided: March 27, 1986.

PRINCETON SPORTSWEAR CORPORATION, APPELLANT,
v.
H & M ASSOCIATES, SIDNEY BECKER AND LEONARD BECKER, APPELLEES



Appeal from the Order of the Superior Court of Pennsylvania, NO. 01898, Philadelphia 1983, entered November 9, 1984, reversing the Order of the Court of Common Pleas of Philadelphia, Civil Division, at No. 762 April Term 1978, entered July 1, 1983.

COUNSEL

Carl M. Mazzocone, Lewis Kates, Philadelphia, for appellant.

Robert B. Bodzin, Robert H. Malis, Philadelphia, for appellees.

Nix, C.j., and Larsen, Flaherty, McDermott, Hutchinson, Zappala and Papadakos, JJ. Flaherty and Zappala, JJ., join in this opinion. Nix, C.j., filed a concurring opinion joined by McDermott, J. Hutchinson, J., filed a concurring opinion joined by Papadakos, J.

Author: Larsen

[ 510 Pa. Page 190]

OPINION ANNOUNCING THE JUDGMENT OF THE COURT

This case involves a dispute between a landlord and a tenant, initiated by the landlord's refusal to restore electricity, heat and elevator service to the tenant's building after a

[ 510 Pa. Page 191]

    fire in an adjacent building resulted in a shut-down of those services. The trial court, sitting as chancellor, found in favor of the tenant, appellant herein, and against the landlord, appellees herein, and awarded damages in the amount of $600,000. On appeal, the Superior Court reversed, 335 Pa. Super. 381, 484 A.2d 185, and appellant now asserts, inter alia,*fn1 that the Superior Court exceeded the proper scope of review when it overturned the trial court's decision.

Pursuant to the terms of a lease agreement dated May 2, 1973, appellant, Princeton Sportswear Corporation, became a tenant in Building No. 12 of a multi-building industrial complex owned by appellee, H & M Associates, a partnership formed by appellees Leonard Becker and Sidney Becker. The lease provided that appellees would provide electricity, heat and elevator service at no extra cost to appellant.

On March 30, 1978, a fire severely damaged the building which housed the sources of heat and electricity for the complex, resulting in a loss of those utilities and of elevator service in the entire complex. Subsequently, on April 4, 1978, appellees notified appellant that they were terminating the lease but that they would allow appellant to remain on the premises on a month-to-month basis, and further, that they no longer intended to provide electricity, heat or elevator service. Appellant responded on April 7, 1978, by filing in the Philadelphia Court of Common Pleas a petition for a preliminary injunction seeking to compel appellees to immediately restore electricity, heat and elevator service to Building No. 12, and a complaint in equity alleging that the fire had occurred because of appellees' negligent maintenance of the complex and that appellees were thus responsible for the loss of utilities and had breached the lease by refusing to restore those utilities.

[ 510 Pa. Page 192]

On April 9, 1978, at a hearing on appellant's petition for a preliminary injunction, the parties entered into a stipulation whereby appellees agreed to allow appellant to make arrangements with the electric company for the restoration of electricity to Building No. 12 without prejudice to appellant's right to seek reimbursement from appellees for the expenses incurred. Even though temporary electric service was restored by the end of April, 1978, the inadequacy of that service and the lack of heat forced appellant to relocate in October, 1978.

Appellant thereafter amended its original complaint in equity, seeking damages for lost profits (due to the temporary discontinuation of its operations*fn2 during April, 1978) and for expenses incurred in relocating. After a hearing, the trial court, sitting as chancellor, made detailed findings of fact and entered a decree nisi. The trial court concluded that appellees' negligent maintenance of the complex had been responsible for the fire and that, thus, appellees were liable for breach of contract in failing to restore electricity, heat and elevator service to appellant's building after the fire. Damages were assessed at $600,000. Appellees' exceptions to the decree were denied.

On appeal, the Superior Court reversed, holding that a certain clause in the lease exculpated appellees from liability. We granted appellant's petition for allowance of appeal and we now reverse.

Appellant contends first that appellees' failure to expressly raise the exculpatory clause, upon which the Superior Court relied, in appellees' written exceptions to the trial court's adjudication constitutes a waiver of that issue. We do not agree. The validity and effect of the clause were raised and exhaustively discussed by both parties in their motions for summary judgment, trial memoranda, and briefs in support of and in opposition to appellees' exceptions to the trial court's adjudication. Therefore, appellees

[ 510 Pa. Page 193]

    have not waived their right to raise the exculpatory clause issue on appeal.

Since the exculpatory clause issue has been preserved for review, we now turn to a consideration of the validity and enforceability of the clause. In general, an exculpatory clause is valid if:

(a) "it does not contravene any policy of the law, that is, if it is not a matter of interest to the public or state" . . .; (b) "the contract is between persons relating entirely to their own private affairs" . . .; (c) "each party is a free bargaining agent" and the clause is not in effect "a mere contract of adhesion whereby [one party] simply adheres to a document which he is powerless to alter, having no alternative other than to reject the transaction entirely."

Employers Liability Assurance Corp., Ltd. v. Greenville Business Men's Association, 423 Pa. 288, 291-92, 224 A.2d 620, 622-23 (1966) (citations omitted). Furthermore, before a generally valid exculpatory clause will be interpreted and construed to relieve a person of liability for his own or his servants' or agents' acts of negligence, it must

"spell out the intention of the parties with the greatest of particularity" . . . and show the intent to release from liability "beyond doubt by express stipulation" and "[n]o inference from ...


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