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Warminster Equities, LLC v. Warminster Commerce

December 21, 2010

WARMINSTER EQUITIES, LLC PLAINTIFF,
v.
WARMINSTER COMMERCE, LLC
DEFENDANT.
WARMINSTER COMMERCE, LLC COUNTERCLAIM/THIRD-PARTY
PLAINTIFF,
v.
WARMINSTER EQUITIES, LLC COUNTERCLAIM DEFENDANT AND ABINGTON SAVINGS BANK THIRD-PARTY
DEFENDANT.



The opinion of the court was delivered by: Buckwalter, S.J.

MEMORANDUM

Currently pending before the Court is Defendant Warminster Commerce, LLC's Motion for Summary Judgment Pursuant to Federal Rule of Civil Procedure 56. For the following reasons, the Motion is granted with respect to all claims raised in Plaintiff's Complaint.

I. FACTUAL AND PROCEDURAL HISTORY

This action involves a dispute over a commercial lease ("the Lease" or "the Leasehold") between Plaintiff Warminster Equities, LLC ("Plaintiff") and Defendant Warminster Commerce, LLC ("Defendant"). The Lease, which commenced in 1973, was originally between American Property Investors ("API"), the lessor, and Pennfood Associates ("Pennfood"), the lessee. (Def.'s Mot. Summ. J. at 3.) The Lease had an initial term of twenty-seven years, but provided the lessee with the option of exercising seven consecutive ten-year extensions. (Id.) The lessee could exercise these extensions "by giving the Lessor notice of such election to extend not later than twelve (12) months prior to the expiration of the basic term or the then current extended term." (Def.'s Mot. Summ. J., Ex. A, Lease Agreement between API and Pennfood ("Lease"), at COM-0045, ¶ 26.1.) The Lease stated that "[a]ll notices and other communications hereunder shall be in writing" and sent via first class mail. (Lease at COM-0033, ¶ 19.)

Pennfood properly exercised the option for the first ten-year extension on December 1, 1998, and assigned the Leasehold to Plaintiff on May 10, 2001. (Def.'s Mot. Summ. J. at 3-4.) Plaintiff financed its purchase of the Lease with a loan from Third-Party Defendant Abington Savings Bank ("Abington"), and subleased the property to Commerce Bank, the predecessor to TD Bank. (Pl.'s Mem. Opp'n at 6.) At present, TD Bank remains on the premises as subtenant. (Id.)

Defendant purchased the property from API on October 15, 2004. (Def.'s Mot. Summ. J. at 3.) On March 24, 2009, Defendant informed Plaintiff that it had not received written notice of Plaintiff's intent to extend the Lease for the second ten-year term, and that the Leasehold would therefore expire on December 31, 2009. (Def.'s Mot. Summ. J. at 4; Id. Ex. F.) On April 2, 2009, Plaintiff sent a letter to Defendant, which it claimed served as written notice of its intent to renew the Lease. (Compl. ¶ 14.) Plaintiff also claimed that it orally informed Defendant of its intent to renew prior to the December 31, 2008 option deadline, but Defendant maintained its position that the Lease had been terminated. (Id. ¶¶ 27-28.)

On December 17, 2009, Defendant sent a letter to Abington explaining that Plaintiff would no longer have an interest in the leased premises as of December 31, 2009, that the mortgage between Abington and Plaintiff would expire on that date, and that Abington should satisfy the mortgage immediately after January 1, 2010. (Abington's Countercl. ¶ 25.) That same day, Defendant also informed sublessee TD Bank that the Lease would expire at the end of 2009 and that it should thereafter send all rent payments directly to Defendant. (Id. ¶ 26.) In letters dated December 22, 2009, December 23, 2009, and December 29, 2009, Plaintiff informed Defendant, TD Bank, and Abington, respectively, of its position that it had properly exercised its option to extend the Lease. (Compl. ¶ 36.) TD Bank advised Plaintiff, on January 28, 2010, that it would place its future rent payments into an escrow account until the dispute between Plaintiff and Defendant was resolved. (Id. ¶ 39; Id. Ex. J.)

Plaintiff filed a Complaint in this Court on February 4, 2010, seeking a declaratory judgment that the Lease remains in full effect and requesting damages for Defendant's intentional interference with its contractual relationships with TD Bank and Abington. (Compl. ¶¶ 42-48.) On April 19, 2010, Defendant filed an Amended Answer to the Complaint, including affirmative defenses, a Counterclaim against Plaintiff, and a Third-Party Complaint against Abington. Defendant filed the present Motion for Summary Judgment on Plaintiff's claims on October 5, 2010, and Plaintiff filed its Memorandum in Opposition on October 26, 2010.

Defendant then filed a Reply on November 12, 2010, and Plaintiff filed a Sur-reply on November 16, 2010.

II. STANDARD OF REVIEW

Summary judgment is proper "if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." FED. R. CIV.P.56(a). A factual dispute is "material" only if it might affect the outcome of the case. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). For an issue to be "genuine," a reasonable fact-finder must be able to return a verdict in favor of the non-moving party. Id. .

On summary judgment, it is not the court's role to weigh the disputed evidence and decide which is more probative, or to make credibility determinations. Boyle v. County of Allegheny, Pa., 139 F.3d 386, 393 (3d Cir. 1998) (citing Petruzzi's IGA Supermarkets, Inc. v. Darling-Delaware Co., Inc., 998 F.2d 1224, 1230 (3d Cir. 1993)). Rather, the court must consider the evidence, and all reasonable inferences which may be drawn from it, in the light most favorable to the non-moving party. Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587-88 (1986) (citing U.S. v. Diebold, Inc., 369 U.S. 654, 655 (1962)); Tigg Corp. v. Dow Corning Corp., 822 F.2d 358, 361 (3d Cir. 1987). If a conflict arises between the evidence presented by both sides, the court must accept as true the allegations of the non-moving party, and "all justifiable inferences are to be drawn in his favor." Anderson, 477 U.S. at 255.

Although the moving party bears the initial burden of showing an absence of a genuine issue of material fact, it need not "support its motion with affidavits or other similar materials negating the opponent's claim." Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986). It can meet its burden by "pointing out . . . that there is an absence of evidence to support the nonmoving party's case." Id. at 325. Once the movant has carried its initial burden, the opposing party "must do more than simply show that there is some metaphysical doubt as to material facts." Matsushita Elec., 475 U.S. at 586. "[T]here is no issue for trial unless there is sufficient evidence favoring the nonmoving party for a jury to return a verdict for that party." Anderson, 477 U.S. at 249. Summary judgment may be granted when "the evidence is merely colorable . . . or is not significantly probative." Id. at 249-50 (citations omitted).

III. DISCUSSION

A. Whether Plaintiff Properly Exercised its Option to ...


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