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Milby v. Pote

Superior Court of Pennsylvania

June 7, 2018

LARRY MILBY, IN HIS INDIVIDUAL CAPACITY, AND SOUTHERN CHRISTIAN MINISTRIES,
v.
CHYRELL POTE, EXECUTRIX OF THE ESTATE OF MARGARET B. SHAW, A/K/A MARGARET D. SHAW, A/K/A MARGARET SHAW, CHYRELL POTE, TERRY SHAW, AND ALL UNKNOWNS, CHYRELL POTE, EXECUTRIX OF THE ESTATE OF MARGARET B. SHAW, A/K/A MARGARET D. SHAW, A/K/A MARGARET SHAW,
v.
SOUTHERN CHRISTIAN MINISTRIES, LARRY MILBY, TRUSTEE, APPEAL OF: LARRY MILBY, IN HIS INDIVIDUAL CAPACITY, AND SOUTHERN CHRISTIAN MINISTRIES, AND SOUTHERN CHRISTIAN MINISTRIES, LARRY MILBY, TRUSTEE

          Appeal from the Order entered August 18, 2017, in the Court of Common Pleas of Blair County, Civil Division, at No(s), 2015 GN 3762 & 2016 GN 630.

          BEFORE: LAZARUS, J., KUNSELMAN, J., and STEVENS, P.J.E. [*]

          OPINION

          KUNSELMAN, J.

         Larry Milby and Southern Christian Ministries ("SCM") appeal from an order in consolidated cases, denying their claims for redress and ejecting them from the Shaw Mobile Home Park ("Park") for failure to pay rent and comply with the Park rules. We affirm.

         The relevant facts and procedural history of these cases are as follows. The parties have a landlord-tenant relationship spanning nearing 50 years. Since 2013, however, disputes between them have resulted in several lawsuits, including this one.

         Larry Milby and his wife, Violet, have lived in a manufactured home in the Shaw Mobile Home Park since the early 1970s. When they first moved there, the Park was owned by Wayne and Margaret Shaw. Mr. Shaw died in 1996. Mrs. Shaw became the Park owner by virtue of his death. She was still living during part of the relevant period of this lawsuit, but died in 2016. Thus, her daughter Chyrell Pote, as executrix of her estate, is named as a defendant in one of these consolidated actions and as the plaintiff in the other. For simplicity sake, we will refer to the Shaws, the estate and the execturix collectively as the Park Owners.[1]

         When the Milbys moved to the Park, the leases for all of the Park lots were verbal. According to Mr. Milby, the terms of the verbal lease included $35 per month in rent[2] with no termination or expiration date; the term of the lease "was like forever" with no end to it -- "it was for as long as you wanted to stay". The Milbys' lot size was defined by an imaginary line between them and their neighbors, primarily based upon the area each resident maintained; the Park was never divided formally into lots. Lease terms and conditions were the same for all tenants, except for the amount of rent; newcomers typically were charged a higher rent than existing tenants. There were no specific written rules or regulations for the Park.

         Gradually over time, the Milbys' rent increased in relatively minor increments, and when sewage lines were installed in the Park, the monthly rent included a fee to cover this additional cost. Other increases were made randomly in amounts of $10 or $20 at a time to bring the older leases in line with newer leases.

         In or around 2006, SCM began to lease lots in the Park. SCM, is a not-for-profit Christian trust, formed in Kentucky. It owns property in Kentucky, Florida and Pennsylvania. The trust itself was never registered as a corporation with the Pennsylvania Department of State and never obtained a certificate of authority from the State to do business here. Mr. Milby is the sole trustee of SCM. The purpose of the trust is to aid and benefit working families who do not receive assistance from the government. Under the trust, SCM has the power to manage trust real estate, including the power to lease, make repairs, and alterations.

         SCM eventually acquired verbal leases for eight lots, placing mobile homes on seven of them (lots 2, 3, 9, 11, 12, 16 and 19). At some point in time, SCM took over leasing lot 16, the Milbys' personal lot. The remaining lot, (lot 15) SCM used for storage.

         By 2015, rent for all of the SCM residential lots was $146 plus a $72 sewer fee ($218 total per lot); rent for the storage lot was $146. SCM subleased the residential lots for $520 per month.

         Over the past few years, disputes over rent arose between SCM and the Park Owners. In 2013 and 2014, the Park Owners filed three ejectment actions against SCM. In the first action, the trial court, by order dated May 16, 2014, ejected SCM from lot 9 for failing to obtain permission from the Park Owners to place a home on the lot, and for failing to obtain a permit and inspection of the lot, in violation of the local building code. SCM did not appeal this ejectment.[3]

         The second and third actions were consolidated, and after a hearing on April 27, 2015, the trial court concluded that the Park violated the Manufactured Home Community Rights Act ("MHCRA") for failing to have written leases. Ultimately, the trial court entered a decision on July 8, 2015, in favor of SCM on the ejectment actions.

         The Park Owners did not appeal the ejectment decision, but directed their attorney to send a letter, dated August 7, 2015, to SCM's attorney informing him that the Park Owners would be sending out new written leases to avoid future problems. Counsel further advised that he was directing the Park Owners to set corner markings to identify the dimensions of each lot. He also asked SCM's attorney to inform SCM, and Mr. Milby, as trustee, of these formal changes so there would be no issues.

         A few months later, on November 2, 2015, SCM advised the Park Owners by letter that it would be paying rent only in the amount agreed to in the valid, original verbal leases made with Wayne Shaw prior to his death, and that pursuant to its calculation of rent due, SCM submitted a rent check in the amount of $936.[4] At the same time, SCM sent a Notice to Cease Criminal Acts and Notice of Needed Repairs to the Park Owners complaining about conditions in the Park and threatening criminal charges.

         On November 5, 2015, the Park Owners sent SCM a notice informing SCM that:

[t]his letter constitutes 60 days formal notice of the community owner's intent to offer the new, renewed or extended leases or shall increase rent and/or payables to the Owner/Lessor, from you, the Lessee. No increased rent or fee charges shall be effective against you prior to the 61st day after posting of this Notice, which has been done.

         The notice further advised that "[y]ou, as the lessee shall have 30 days from the date of this mailing to either accept the new, renewed or extended rental agreement or to notify the Landlord/Owner of your intent to vacate within 30 days." The written leases, which SCM allegedly had requested since 2008, were forwarded with this letter.

         The new written leases contained the rental amounts due for each lot and the effective dates. The new leases for the six residential lots (2, 3, 11, 12, 16 and 19) were to become effective February 1, 2016. The new rent amount would be $176 per month, ($30 more than the current rent of $146), plus the sewer fee of $72 per month ($248 total per lot). Until the effective date of the new leases, the current rent, $146 plus the sewer fee, was to be paid ($218 total per lot). The new lease for the storage lot (15), was to become effective sooner, on December 1, 2015, because it was a non-residential lease and not subject to the MHCRA. The new rent amount for that lot would be $148 per month (also $30 more than the current rent of $118). The Park Owners sent similar written leases to all other tenants of the Park.

         On November 9, 2015, a few days after sending the written leases and a week after receiving the reduced rent check from SCM, counsel for the Park Owners returned SCM's $936 rent check and issued SCM a Notice of Violations. This notice advised SCM that it had violated the rules for non-payment of rent for the residential lots because the rent check was far below the $1, 426 due for November. The notice further advised SCM that it violated Park rules by sending the rent check to the attorney for the Park Owners rather than putting it in the Park's rent box. The notice warned SCM that eviction proceedings would be commenced if the full amount of rent for the residential lots was not paid within thirty (30) days. The letter accompanying the notice also indicated that the November rent for the storage lot, in the amount of $118, was delinquent.

         SCM received both the notice for the new leases and the notice of violation of the existing leases on November 12, 2015.

         Mr. Milby, as trustee for SCM, refused to sign the new written leases. According to him, many of the terms and conditions of the new leases were not consistent with the old verbal leases. In particular, the new leases restricted the number of parked vehicles tenants could keep on their lot and prohibited other items from being stored on the property, many of which Mr. Milby owned and stored on his lot. The lot dimensions were not consistent with what Mr. Milby thought they were. Despite Mr. Milby's misgivings about the new leases, all of the other Park tenants signed the new lease.

         On December 8, 2015, Mr. Milby and SCM initiated this civil action. In late 2015, Mr. Milby and SCM filed a lawsuit pro se in federal court, raising similar issues to those in this case.[5] The federal suit was voluntarily dismissed sometime in 2016.

         In their first amended complaint in this action, SCM and Mr. Milby alleged that certain dangerous and unacceptable conditions existed in the Park: uncapped, concrete sewer pipes protruding on the SCM lots; metal stakes stuck out of the ground to identify the boundaries of each lot; a damaged utility pole was leaning toward lot 12; two caved in holes from the outdated septic system remained unfilled on lots 12 and 16; and an area of ponding and stagnating water formed behind lot 3. Although SCM complained to the Park about these problems, they had not been addressed. Mr. Milby, in his individual capacity, and SCM filed this action alleging that these conditions constituted a private and/or public nuisance and that these conditions infringed upon their right of quiet enjoyment.

         The complaint further alleged that because there were no written leases between the parties, as required under the MHCRA, the essential terms of the verbal leases were unclear. The complaint contends that Park Owners, by sending new leases, impermissibly modified the existing lease terms in contravention of the MHCRA. Consequently, Mr. Milby and SCM asked the court to declare the terms and conditions of the existing leases and the rights and obligations of the parties.

         Finally, the complaint alleged that the Park Owners engaged in retaliatory conduct, prohibited under Section 398.16 of the MHCRA, which Mr. Milby and SCM sought to enjoin. Although they concede that some of the new requirements for the Park were reasonable, Mr. Milby and SCM contend that most of the new rules were a deliberate attack upon them and were retaliatory in nature. They claim the retaliatory conduct includes: failing to repair dangerous conditions in the Park; encroaching on tenants' lots with stakes and signs; changing the designation of lot 15 from residential to storage; policing by one of the Park residents to harass and intimidate other Park residents; and imposing new lease terms on the tenants. The most egregious retaliation, they contend, was the thirty (30) day requirement to sign the new lease or move.

         While the civil lawsuit filed by Mr. Milby and SCM was still pending, on January 15, 2016, the Park Owners issued a Notice to Quit for delinquent rent upon SCM because it failed to timely pay the full rent due for lot 15 under the new lease: an additional $30 dollars for December, 1, 2015, and $30 for January 1, 2016. The Park Owners directed SCM to remove itself from lot 15 within 15 days from the date of service.

         On February 1, 2016, SCM paid $1, 426 to the Park Owners for February rent. Despite this payment, on February 2, 2016, the Park Owners filed an ejectment action with the local Magisterial District Judge to remove SCM from all of its lots. The Park Owners claim the six verbal residential lot leases expired on January 31, 2016, under the MHCRA; the storage lot lease expired on November 30, 2015, under the Landlord and Tenant Act. Because all seven verbal leases had expired, and SCM failed to enter into new leases, the Park Owners claimed that they were entitled to take possession of all of the SCM lots. Alternatively, the Park Owners sought ejectment of SCM for its failure to pay rent and comply with Park rules.

         On February 17, 2016, the Magisterial District Judge found in favor of the Park Owners as to all seven lots. SCM appealed to the trial court, where both the ejectment action filed by the Park Owners and the pending civil action filed by Mr. Milby and SCM were consolidated.

         After a bench trial on these consolidated matters, including a site view of the Park, the trial court issued an Order, dated July 18, 2017, granting the Park Owners ejectment/eviction of SCM from all seven lots. The trial court further entered judgment against SCM and in favor of the Park Owners in the amount of $13, 908.45, representing unpaid rent from February 1, 2016 through July 31, 2017, and unpaid sewerage costs on lot 15. In addition, SCM remained liable for the new rental amount of $248 per month, per lot, from August 1, 2016, until the manufactured homes are removed. As to the civil action filed by Mr. Milby and SCM, the trial court dismissed the entire case for lack of standing and entered judgment in favor of the Park Owners. Although it dismissed this action based on standing, the trial court, nonetheless, addressed all claims raised in the first amended complaint, but concluded none had merit.

         Mr. Milby and SCM timely appealed. They and the trial court complied with Pa R.A.P. 1925. Because its July 18, 2017 order and opinion provided a comprehensive analysis of the issues presented at trial, along with detailed findings of fact and conclusions of law, the trial court only addressed the standing issue in its subsequent 1925(a) Opinion, dated August 18, 2017. For all other issues raised, the trial court relied on its prior opinion. In addressing the standing issue again, the trial court reconsidered its original conclusion and acknowledged that SCM may have standing to bring suit but still concluded that all of SCM's claims were meritless.

         On appeal, Mr. Milby and SCM raised seven issues which we have rephrased for clarity and reordered for ease of discussion:

I. Whether the trial court erred in finding that Mr. Milby and SCM did not have standing to pursue an action against the Park Owners?
II. Whether the trial court erred in denying SCM's request to adopt and incorporate the trial court's prior findings of fact and conclusions of law from its order dated July 8, 2015?
III. Whether the trial court erred in finding that the Manufactured Home Community Rights Act did not apply to the claims Mr. Milby and SCM filed against the Park Owners?
IV. Whether the trial court erred in not affording Mr. Milby and SCM the presumption of retaliation under the Manufactured Home Community Rights Act and in determining that the actions of the Park Owners were not retaliatory?
V. Whether the trial court erred in determining that the Park Owners' new written leases were valid and enforceable under the Manufactured Home Community Rights Act?
VI. Whether the trial court erred in determining that the Park Owners were entitled to ejectment/eviction of SCM from the Shaw Mobile Home Park?
VII. Whether the trial court erred in determining the Park Owners were entitled to damages in quantum meruit for SCM's use of lot 15 of the Shaw Mobile Home Park as a residential lot?

Milby/SCM Brief at 4-5.

         This Court's scope and standard of review on appeal following a bench trial is well-settled:

Our appellate role in cases arising from non-jury trial verdicts is to determine whether the findings of the trial court are supported by competent evidence and whether the trial court committed error in any application of the law. The findings of fact of the trial judge must be given the same weight and effect on appeal as the verdict of a jury. We consider the evidence in a light most favorable to the verdict winner. We will reverse the trial court only if its findings of fact are not supported by competent evidence in the record or if its findings are premised on an error of law. However, where the issue ... concerns a question of law, our scope of review is plenary. The trial court's conclusions of law on appeal originating from a non-jury trial are not binding on an appellate court because it is the appellate court's duty to determine if the trial court correctly applied the law to the facts of the case.

Stephan v. Waldron Elec. Heating and Cooling LLC, 100 A.3d 660, 664- 65 (Pa. Super. 2014) (citation and quotation omitted). "'Threshold issues of standing are questions of law; thus, our standard of review is de novo and our scope of review is plenary.'" Rellick-Smith v. Rellick, 147 A.3d 897, 901 (Pa. Super. 2016) (quoting Johnson v. Am. Std., 8 A.3d 318, 326 (Pa. Super. 2010)).

         The crux of this appeal requires interpretation of the provisions of the Manufactured Home Community Rights Act, 68 P.S.398.1 et seq. This Act is not one which has been reviewed by our appellate courts with any regularity, and in particular, not in recent times. Many years ago, we summarized the basic principles behind the MCHRA as follows:

The purpose of this legislation is to give special protection to mobile home owners in mobile home parks. One reason for the distinction between mobile home park owners and other landlords is the hybrid type of property relationship that exists between the tenant who owns the home and the landlord who rents only the lot on which the mobile home sits. In most instances a mobile home owner in a park is required to remove the wheels and anchor the home to the ground in order to facilitate connections with electricity, water and sewerage. Thus, it is only at substantial expense that a mobile home can be removed from a park with no ready place to go. The legislature, while recognizing the right of the mobile home park owner to establish and publish reasonable rules and regulations relating to tenants in the park, has sought to prevent arbitrary evictions at a substantial expense to park residents.

Malvern Courts, Inc. v. Stephens, 419 A.2d 21, 23 (Pa. Super. 1980). Although manufactured homes are frequently referred to as "mobile homes", they are not easily movable and tend to be more of a long-term housing option. For this reason, the Legislature has afforded special protection to those who lease property in a manufactured home park.

         As a manufactured home park, the Park is subject to the provisions of the MHCRA. Thus, in analyzing the issues in this appeal, we must give consideration to the purpose of the MHCRA's enactment, legislative intent and the literal working of the MHCRA. Id.

         Regarding the civil action Mr. Milby and SCM filed against the Park Owners, the trial court dismissed all of these claims. Mr. Millby and SCM did not appeal the trial court's findings of fact and conclusions of law related to their claims of public and private nuisance, breach of the implied covenant of quiet enjoyment, or their request for a declaration judgment as to the essential lease terms and conditions. Any issues related to these claims have therefore been waived. See Milby/SCM Brief at 4-5.

         Their only remaining claim from that lawsuit is for retaliation under the MHCRA.[6] Because that issue is so interwoven with the ejectment action filed by the Park Owners, in reality, only one dispute remains, i.e. whether the Park Owners were justified in filing their ejectment action as the trial court determined, or whether the Park Owners' actions were ...


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