the forfeiture must not be unconscionable. Cleveland v. Salwen, 292 Pa. 427, 141 A. 155 (1928).
Although "forfeitures are odious in law, and are enforced only where there is the clearest evidence that that was what was meant by the . . . parties . . ., a bill to set aside a forfeiture of a lease is addressed to the conscience of the court, and is granted only as a matter of grace." Blue Ridge Metal Manufacturing Co. v. Northern Pennsylvania Power Co., 327 Pa. 424, 428, 194 A. 559 (1937). The burden is on the party opposing forfeiture to show that "fair dealing and good conscience" require the "intervention of equity to relieve it from the strict enforcement of the terms of the lease." Id.
The right to declare a forfeiture was clearly reserved in the lease. Although some of the letters written by plaintiff were ambiguous as to whether it considered defendant in default, the August 17 letter unambiguously stated that defendant was in default and that plaintiff considered the lease terminated.
Defendant argues that since the lease did not specifically state that the tenant covenanted to keep the common area unobstructed for pedestrian traffic and the parking of automobiles, only the landlord had an obligation to keep the area clear. Defendant points to other sections of the lease where the tenant explicitly "covenanted" to perform or refrain from certain acts and claims that when the parties wished to bind the tenant, the tenant would explicitly "covenant."
Defendant's argument, however, proves too much. The lease also contains sections in which the landlord explicitly covenants to perform certain acts. According to the logic of defendant's argument, neither the landlord nor the tenant was responsible for keeping the common areas unobstructed since neither party explicitly covenanted to do so. This would be absurd. A more rational reading of the lease is that defendant agreed not to block sidewalks and parking spaces with its property.
The absurdity of defendant's position is also suggested by other sections of the lease. The lease states that any breach by the landlord entitles the tenant to terminate the lease after giving notice and a reasonable time to cure, regardless of whether damages would make the tenant whole. If, as defendant argues, only the landlord was responsible for keeping the common areas unobstructed, then the tenant could terminate the lease on the basis of the landlord's failure to remove obstructions created by the tenant. Although equity would never permit such a result, I am loathe to think that the parties would agree to terms with such an absurd meaning.
The evidence is clear that defendant obstructed the center's sidewalk and parking lot with its property, and that the defendant did not cure its default within thirty days of the August 17 letter. Nothing in the record suggests that plaintiff did not exercise its right to terminate promptly or that defendant was prejudiced by plaintiff's willingness to give it more than thirty days to cure the problem.
Enforcing this forfeiture is not unconscionable. The sections of the lease at issue in this controversy were all drafted by defendant, and there is nothing unconscionable about strictly holding defendant to the terms of its agreement. Defendant is a major corporation with approximately 350 retail stores and clearly had the economic clout to avoid an unconscionable agreement with the owners of a small shopping center. Moreover, there is no evidence of trickery or bad faith on plaintiff's part. Defendant was repeatedly asked to remove its property from the common area and repeatedly failed to do so. There is no evidence that any uncontrollable circumstances prevented defendant from complying with the lease. Defendant simply chose to ignore the terms of its agreement and the numerous complaints it received from its landlord.
Equity will not relieve a wrongdoer from a forfeiture simply because it causes a loss to the wrongdoer far greater than the harm suffered by the innocent party invoking an agreement's forfeiture provision.
Defendant has not met its burden of showing that "fair dealing and good conscience" require the intervention of equity to relieve it from the terms of a lease it drafted and willfully chose to breach.
An appropriate order follows.
O R D E R
AND NOW, this 21st day of August, 1986, it is hereby ORDERED that judgment is entered in favor of plaintiff and counterclaim defendant 202 Marketplace and against defendant and counterclaim plaintiff Evans Products Company, and
IT IS FURTHER DECLARED that defendant has defaulted on its lease with plaintiff and that plaintiff has the right to terminate said lease.