United States District Court, E.D. Pennsylvania
MICHAEL S. STRAUS, LAURENCE A. STRAUS AND WILLIAM M. STRAUS, Plaintiffs,
UNITED STATES POSTAL SERVICE, Defendant.
1966, Plaintiffs Laurence A. Straus, Michael S. Straus, and
William M. Straus' (“Straus Brothers”) father
leased to Defendant United States Postal Service
(“USPS”) a building which has since housed the
Richmond Station Post Office (“Richmond
Station”). The first lease agreement provided an
option for USPS to purchase the property and the land on
which it stood for a fixed price. An amendment to the
agreement, which was signed in 1982, also contained an option
for USPS to purchase the property but for fair market value.
USPS now wishes to buy the property. It maintains that it is
entitled to do so for the fixed price. The Strauss Brothers
disagree and have sued seeking a declaratory judgment that
they have no obligation to sell the property to USPS for
either a fixed price or for market value. They also claim
that USPS, which still occupies the building, is a holdover
tenant which owes them back rent.
parties filed cross motions for summary judgment. The
Plaintiffs seek an order affirming their right not to sell
Richmond Station and denying that USPS' has a right to
continued possession of and to exercise any purchase option.
USPS, in turn, seeks an order compelling Plaintiffs to convey
Richmond Station to USPS.
following facts are not in dispute between the parties. On
August 1, 1966, USPSand the Straus Brothers' father, Howard
Straus, entered into a lease concerning Richmond Station (the
“1966 Lease”). Paragraph 5 of the 1966 Lease
provides USPS with six consecutive renewal options, each for
a term of five years. Paragraph 6 grants USPS an option to
purchase Richmond Station at certain times for a fixed price
- $240, 000 (the “Fixed Price Option”).
1982, the parties executed an amendment to the 1966 Lease
(the “1982 Amendment”), which became effective on
July 1, 1982. Paragraph 5 of the 1982 Amendment reduces the
annual rent for the property from the $18, 850 set forth in
the 1966 Lease to $17, 054 for the remainder of the original
lease term and for six renewal term options, each for a set
period of five years. The 1982 Amendment also grants USPS an
option to purchase the property at fair market value at any
time during the remaining term of the lease and any renewal
term (the “Fair Market Value Option”).
renewed its tenancy through the last renewal option term
paying the rent rate set out in the 1982 Amendment. On July
28, 2015, one year and a few days prior to the expiration of
the final renewal term, it sent a letter to exercise the
option to purchase the property. The letter purported to
“constitute notice” that USPS “has
elected to purchase the fee simple title to the leased
premises . . . including the underlying land, at the end of
the sixth 5-year renewal option term for the purchase price
of $240, 000.00, as provided in Paragraph 6 of the Post
Office Department Lease, dated August 1, 1966.” The
letter did not refer to the 1982 Amendment. USPS scheduled a
closing for the transfer of Richmond Station. The Straus
Brothers did not appear, disputing USPS' right to
exercise the Fixed Price Option. The Straus Brothers then
brought this suit against USPS.
judgment is appropriate where there is no genuine issue as to
any material fact and the moving party is entitled to a
judgment as a matter of law.” Alabama v. North
Carolina, 560 U.S. 330, 344 (2010) (citations and
internal quotation marks omitted); see also Fed. R.
Civ. P. 56(a). The Court must grant summary judgment
“against a party who fails to make a showing sufficient
to establish the existence of an element essential to that
party's case, and on which that party will bear the
burden of proof at trial.” Celotex Corp. v.
Catrett, 477 U.S. 317, 322-23 (1986). The same standard
applies to cross-motions for summary judgment. See
Lawrence v. City of Philadelphia, 527 F.3d 299, 310 (3d
genuine issue is present when a reasonable trier of fact,
viewing all of the record evidence, could rationally find in
favor of the non-moving party in light of his burden of
proof.” Doe v. Abington Friends Sch., 480 F.3d
252, 256 (3d Cir. 2007) (citing Celotex Corp. at
322-26); Anderson v. Liberty Lobby, Inc., 477 U.S.
242, 248-52 (1986). “The non-moving party may not
merely deny the allegations in the moving party's
pleadings; instead he must show where in the record there
exists a genuine dispute over a material fact.”
Doe, 480 F.3d at 256 (citing Celotex, 477
U.S. at 322-26). In ruling on a motion for summary judgment,
a court must “view the facts in the light most
favorable to the non-moving party and draw all reasonable
inferences in that party's favor.” Burton v.
Teleflex Inc., 707 F.3d 417, 425 (3d Cir. 2013).
argument on their motion for partial summary judgment is that
a plain reading of the 1966 Lease and the 1982 Amendment
shows that the Fixed Price Option to purchase the property
was superseded by the Fair Market Value Option in the 1982
Amendment. They contend further that having failed to timely
pursue the Fair Market Value Option and the lease agreement
for the Property now having expired, USPS is a holdover
tenant at Richmond Station. In its motion for summary
judgment USPS asks for a judgment directing the Straus
Brothers to specifically perform - to tender title to the
leased premises to USPS in accordance with the Fixed Price
Option set forth in the 1966 Lease.
The Inter-Relationship of the 1966 Lease and 1982 Amendment
both motions require an analysis of the inter-relationship of
the terms of the 1966 Lease and the 1982 Amendment. More
specifically, the question before the Court is, given the
language in the relevant provisions of the two documents,
what effect the Fair Market Value Option of the 1982
Amendment had on the Fixed Price Option in the 1966
Lease. The focus is thus on whether the language
of the provisions unambiguously supports either
Plaintiffs' or Defendant's construction. Whether an
ambiguity exists is a question of law that may be decided on
a motion for summary judgment. See United States v.
Hardwick, 544 F.3d 565, 570 (3d Cir. 2008) (stating that
interpretation of a contract is a question of law). However,
if a review of the relevant provisions leads to the
conclusion that the contract is ambiguous, the meaning of the
contract is a question for the trier of fact and summary
judgment will be denied. See Tigg Corp. v. Dow Corning
Corp., 822 F.2d 358, 362 (3d Cir. 1987) (“The
process of interpreting a document is potentially a ...