The opinion of the court was delivered by: Jay C. Waldman, J.
When considering a motion for summary judgment, the court must
determine whether "the pleadings, depositions, answers to
interrogatories, and admissions on file, together with the affidavits, if
any, show that there is no genuine issue of material fact and that moving
party is entitled to judgment as a matter of law." Fed.R.Civ.P. 56(c);
Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247 (1986); Arnold
Pontiac-GMC, Inc. v. General Motors Corp., 786 F.2d 564, 568 (3d Cir.
1986). Only facts that may affect the outcome of a case are "material."
Anderson, 477 U.S. at 248. All reasonable inferences from the record are
drawn in favor of the non-movant. Id. at 256.
Although the movant has the initial burden of demonstrating the absence
of genuine issues of material fact, the non-movant must then establish
the existence of each element on which he bears the burden of proof.
J.F. Feeser, Inc. v. Serv-A-Portion, Inc., 909 F.2d 1524, 1531 (3d Cir.
1990) (citing Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1965)). The
non-moving party may not rest on his pleadings but must come forward with
competent evidence from which a reasonable factfinder could render a
verdict in his favor. Anderson, 479 U.S. at 248; Williams v. Borough of
West Chester, 891 F.2d 458, 460 (3d Cir. 1989); Woods v. Bentsen,
889 F. Supp. 179, 184 (E.D.Pa. 1995).
From the competent evidence presented, as uncontroverted or otherwise
viewed most favorably to defendant, the pertinent facts are as follow.
In February 1999, Intown Management Group ("ITMG") was awarded three
contracts to manage Philadelphia-area properties administered by the
United States Department of Housing and Urban Development ("HUD"). ITMG
was obligated to begin servicing the contracts in April 1999. To do so,
ITMG required appropriate office space with many phone lines.
On March 12, 1999, ITMG entered into a lease agreement with plaintiff
pursuant to which ITMG agreed to lease approximately 17,075 square feet on
the first floor of plaintiff's office building. The term of the lease was
five years at a graduated rent which ranged from $23,478.13 per month
during the first six months to $27,035.42 per month for the final six
months. The lease provided that ITMG would move into the building's first
floor on April 1, 1999 after certain agreed-upon improvements were made
to the space. The lease agreement did not state that time was of the
essence. To the contrary, it provided that plaintiff would not be subject
to liability for failure to deliver possession by the target date and
that ITMG's obligations under the lease would not be affected by such a
The lease agreement provided that ITMG would be in default if it were
to file for bankruptcy. The section of the lease listing remedies in the
event of a default included repossession of the premises and an
acceleration of all rental payments. The lease agreement also contains a
provision that "notwithstanding anything to the contrary stated herein,
Landlord shall undertake commercially reasonable efforts to mitigate its
damages in the event of a Tenant default."
Defendant executed a lease guaranty on March 12, 1999 by which
defendant guaranteed lease payments to plaintiff "subject to any
rights or defenses applicable to the obligations of [ITMG]."
After plaintiff represented to ITMG that it would be unable to complete
the agreed-upon improvements to the first floor space by April 1, 1999,
the parties agreed that ITMG would use second floor space in the building
until the improvements were completed. The second floor space was dirty,
and initially had no air conditioning system or ventilation and had
inadequate phone lines for ITMG's business needs. Plaintiff later
installed an air conditioning system at ITMG's request, but the system
"did not work." ITMG then installed fans, but did not use them because
the air circulation disturbed papers in the office.
ITMG could not meet the processing deadlines imposed by HUD because the
temporary nature of the space made installation of appropriate work
stations economically unfeasible and because of the lack of adequate
The first floor space was not ready until the middle of June 1999, at
which point ITMG was preparing to sign an amendment to the lease for an
additional 10,000 square feet in the building. This amendment also
provided that ITMG could occupy the second floor of the building until
December 1999 when improvements to the additional space would be
completed. The amendment was executed on September 10, 1999.
ITMG moved most of its personnel into the first floor space in June
1999, although some overflow personnel continued to occupy the second
floor pursuant to the amendment. The heating and air conditioning systems
in the first floor space would run simultaneously. Several employees
became ill from a black film emitted by the air conditioning system when
it was first turned on.
On September 22, 1999, ITMG filed for bankruptcy. ITMG received notice
of termination due to its default on the same day. Later that day,
plaintiff's property manager informed ITMG that it was in default under
the lease and that all ITMG employees must vacate the premises. Also on
September 22, 1999, HUD representatives informed ITMG that the HUD
contracts would be terminated due to ITMG's ...