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[U] W.J. Pace & Associates, Inc. v. Pajoma Holdings, LLC.

Superior Court of Pennsylvania

January 13, 2014



Appeal from the Judgment Entered April 3, 2013 In the Court of Common Pleas of Delaware County Civil Division at No(s): 2011-00529.




Pajoma Holdings, LLC, ("Pajoma") appeals, at Docket No. 1259 EDA 2013, the judgment entered against them and in favor of W.J. Pace & Associates, Inc. ("W.J. Pace" or "Pace"), following a bench trial. W.J. Pace cross-appeals at Docket No. 1336 EDA 2013. After review, we affirm in part and vacate in part. We remand only for an award of pre-judgment interest.

This litigation began when W.J. Pace filed suit against Pajoma, alleging breach of contract. The trial court cogently related the following factual and procedural history:

Pace is a licensed Pennsylvania real estate broker. Pajoma is the owner of certain real estate property identified generally as 2 Wilmington Pike, Glen Mills, Delaware County, Pennsylvania ("Subject Property"). In April, 2008, Pasquale Carlino and John DiMichele were the sole members of Pajoma, a Pennsylvania limited liability company. In 2008, after some negotiations between the parties, William J. Pace, a licensed real estate agent and broker and an employee and officer of Pace entered into a listing agreement ("Listing Contract") concerning the Subject Property with Pajoma. In April 2008, the Listing Contract was signed by Pasquale Carlino and John DiMichele on behalf of Pajoma, the owner of the Subject Property. Pace executed the Listing Contract on April 15, 2008.
In the Listing Contract, Pajoma provided Pace the exclusive right to lease the Subject Property, subject to one excluded prospective tenant, Nancy Pace. The Listing Contract provided Pace an exclusive listing in exchange for Pace, as the real estate broker, marketing the Subject Property to prospective tenants, and negotiating a lease with a tenant on terms acceptable to the owner, Pajoma. The exclusive listing period was six (6) months, beginning on April 15, 2008, and ending on October 15, 2008.
The exclusive listing period expired. The Listing Contact included a 365 day period of protection that required Pajoma to pay to Pace the commission where a tenant begins negotiations to lease the Subject Property during the exclusive listing period and subsequently enters into a lease agreement during the period of protection, and the Subject Property has not been listed with another real estate broker. Pajoma did not list the Subject Property with another real estate broker once the exclusive listing period expired, and for this reason, the period of protection under the Listing Contract ran from October 16, 2008, to October 15, 2009.
The Listing Contract further provided: "All showings, negotiations and discussions about the sale, lease or other tenancy of the property will be done by the Broker on Owner's behalf. All written or oral inquiries that Owner receives or learns of regarding the property, regardless of source, will be referred to Broker." (Exh. P-1 para. 5(B)). Under the terms of the Listing Contract, Pajoma agreed to pay to Pace a commission of the first month's rent of the first year of any lease term, plus six (6%) percent of the gross rent due and payable for any subsequent years of the lease term, including all renewals and extensions of the lease term.
Goddard Systems entered into negotiations with Pajoma directly regarding a lease of the Subject Property in June, 2008. On May 11, 2009, Pajoma entered into a lease with tenants Stephanie Grimaldi, Piero Grimaldi, Pasquale Carlino and John DiMichele ("Original Lease"). The Original Lease was signed during the period of protection.
Under the name Bella Regazzi, LLC, the individuals named as tenants under the Original Lease operate a Goddard School franchise at the Subject Property. The testimony of Stephanie Grimaldi was that the tenant under the Original Lease began rent payments in November 2009. The Original Lease required the tenant to pay a base rent monthly of $21, 200.00 during the first lease year of the 15 year initial lease term with an annual escalator of 3% or the consumer price index, whichever is greater.
As of January, 2013, the aggregate rent due under the Original Lease since November, 2009 totaled $831, 307.12. Pajoma made no commission payments to Pace under the Listing Contract or otherwise, in connection with the Original Lease. Pace served Pajoma certain requests for the production of documents in connection with this civil action. In response to the discovery requests, Pajoma produced a copy of a lease dated January 1, 2010, which identified as tenant an entity named: "Bella Regazzi, LLC." (the "2010 Lease"). In response to the discovery requests, Pajoma did not produce the Original Lease that was executed on May 11, 2009 prior to the expiration of the 365 day period. The 2010 Lease was signed by its parties after the expiration of the 365 day period.
A bench trial took place on January 11, 2013. Thereafter, this Court determined that Pace, had the burden of proof by a preponderance of the evidence as to its claim the Listing Contract is a valid and enforceable contract between Pace and Pajoma, that Pace performed its contractual obligations, and that Pajoma, despite entering into the Original Lease during the 365 day period of protection, failed to pay the commission due in breach of the Listing Contract. By Order dated March 28, 2013, this Court specifically found as follows:
1. On the claim made by Plaintiff, W.J. Pace & Associates, Inc., for breach of the Listing Contract entered by Plaintiff and Defendant on or by April 15, 2008, this Court enters judgment in favor of Plaintiff, W.J. Pace & Associates, Inc., and against Defendant, Pajoma Holdings, LLC., in the sum of ...

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