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PHILMAR MID-ATLANTIC v. YORK STREET ASSOCIATES II (12/08/89)

filed: December 8, 1989.

PHILMAR MID-ATLANTIC, INC., APPELLANT,
v.
YORK STREET ASSOCIATES II, T/A AND D/B/A CENTRE POINT PLACE AND ROBERT J. WATERS, APPELLEES



Appeal from Order of the Court of Common Pleas, Civil Division, of Bucks County, No. 88-05449-05-5.

COUNSEL

Ronald J. Smolow, Trevose, for appellant.

John P. Koopman, Langhorne, for appellees.

Wieand, Beck and Montgomery, JJ.

Author: Wieand

[ 389 Pa. Super. Page 299]

In this action by Philmar Mid-Atlantic, Inc. (Philmar) against York Street Associates II, t/a Centre Point Place (York Street) and Robert J. Waters, the plaintiff attempted to enforce and recover damages for breach of an alleged agreement to lease space in a shopping center in Warminster Township, Bucks County. Defendants filed preliminary objections in which they asserted that the document relied upon by the plaintiff contained express language that it was not intended to be a binding agreement and was subject to further negotiations regarding the terms of a written lease. The trial court agreed, sustained the preliminary objections in the nature of a demurrer, and dismissed the complaint with prejudice. Plaintiff appealed.

The written document upon which the plaintiff-appellant's alleged cause of action is based is a letter containing terms to be incorporated into a lease of space for a Kentucky Fried Chicken outlet. The first paragraph of the letter is as follows:

[ 389 Pa. Super. Page 300]

The following represents the terms and conditions that I would be willing to recommend to the partners of York Street Associates II for a new Kentucky Fried Chicken store to be located in our proposed shopping center in Warminster, PA.

It concludes:

This Letter of Intent is non-binding on the parties and is subject to the approval of a mutually satisfactory lease by LANDLORD and TENANT. If such lease is not negotiated and executed by the parties, they shall have no rights against each other.

The letter was signed by an employee of the real estate agency which had conducted negotiations on behalf of the owner, and was approved by the President of Philmar, the appellant corporation.

Lease negotiations subsequently broke down, and the parties did not execute a formal lease as contemplated by the letter of intent. An application for a zoning variance by the defendant corporation on behalf of the plaintiff-appellant was withdrawn by defendant when it became apparent that the zoning board had objections to construction of a fast food restaurant with drive-through service. ...


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