J-S78028-16

NON-PRECEDENTIAL DECISION - SEE SUPERIOR COURT I.O.P. 65.37

WESTMORELAND REGIONAL HOSPITAL IN THE SUPERIOR COURT OF

PENNSYLVANIA

Appellee

v.

SUBWAY REAL ESTATE CORP.

Appellant No. 613 WDA 2016

Appeal from the Order March 31, 2016

In the Court of Common Pleas of Westmoreland County

Civil Division at No(s): 1249 OF 2015

BEFORE: BENDER, P.J.E., OTT, J., and FITZGERALD, J.*

MEMORANDUM BY OTT, J.: FILED MARCH 14, 2017

Subway Real Estate Corp. (“SREC”) appeals from the order entered 

March 31, 2016, in the Westmoreland County Court of Common Pleas, 

granting Westmoreland Regional Hospital’s (“Hospital”) motion for judgment 

on the pleadings with regard to a commercial lease, denying SREC’s crossmotion for judgment on the pleadings, and directing SREC and its sublessee 

vacate the leased premises at issue within 60 days. On appeal, SREC 

contends the trial court erred in granting Hospital’s motion for judgment on 

the pleadings, and denying its cross-motion. For the reasons below, we 

affirm.

____________________________________________

*

Former Justice specially assigned to the Superior Court.
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The facts underlying this appeal are summarized by the trial court as 

follows:

This case involves an Agreement of Lease entered into by the 

parties, which began on February 1, 2005, and ended on January 

31, 2010, for property located at 532 West Pittsburgh Street, 

Greensburg[,] PA 15601. Said Lease Agreement contained a 

renewal term for one (1) five (5) year period, which option was 

exercised by [SREC] and accepted by [Hospital] by way of 

correspondence dated January 7, 2009 and December 1, 2009. 

Accordingly, said renewal term commenced on February 1, 2010 

and expired on January 31, 2015.

In the December 1, 2009 letter (hereinafter “December 

[L]etter”) which confirmed the agreement for the first renewal 

period, [Hospital] agreed to amend the initial Lease Agreement 

to include the option of a Second Renewal Term, beginning 

February 1, 2015 and ending January 31, 2020, and provided 

the terms of said second Renewal Term as follows:

Provided that Lessee is not in default of this Lease, the 

parties may extend the term of this Lease by mutual 

written agreement a second time for an additional five (5) 

year period (the “Second Renewal Term”) at the same 

terms and conditions provided in the original Lease 

Agreement and this amendment thereto; provided 

however, that the minimum base rent for the Second 

Renewal Term (the “Second Renewal Base Rent”) shall be 

determined by fair market value, in an amount not to 

exceed fifteen percent (15%) over the rental rate in effect 

at the end of the Renewal Term (January 31, 2015); and 

provided, further, that if the Second Renewal Base Rent, 

as calculated herein, would be less than fair market value, 

Lessor shall not renew the term. Any renewal of this Lease 

shall be on the terms and conditions negotiated between 

the parties. The Initial Term and all Renewal Terms are 

hereinafter collectively referred to as the “Term”.
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The December Letter further provided for an increase in rent 

during the third year of the Renewal Term[1]and provided 

signature lines for [SREC’s] representatives to sign and send 

back the agreement, which was not done. [SREC disputes this 

fact, and, indeed claims it returned a signed copy of the 

December Letter.] Subsequently, by letter dated January 17, 

2014, [SREC] attempted to exercise its alleged option for a 

Second Renewal Term; however, [Hospital] responded by letter 

dated January 31, 2014 that the December Letter was never 

signed and returned, and as a result, the rent was never raised 

and said Second Renewal Term was never accepted in writing.

Trial Court Opinion, 3/31/2016, at 1-2 (record citations omitted). 

Accordingly, Hospital asserts the lease term expired on January 31, 2015.

On May 11, 2015, Hospital filed a complaint seeking judgment for 

possession of real property and money damages. Thereafter, on April 9, 

2015, SREC filed an answer, with new matter and counterclaim, seeking a 

declaration that SREC properly exercised the second renewal option detailed 

in the December Letter. Hospital filed a timely reply in which it asserted 

SREC never countersigned and returned the December Letter. 

____________________________________________

1 Specifically, the December Letter provided:

According to our discussion, the rent rate will remain at the 

current rate for the initial three years of the extended termFebruary 1, 2010 to January 31, 2013. The rent rate will 

increase for years four and five of the Renewal Term in 

accordance with the CPI in effect at the year end prior to the 

beginning of the fourth and fifth term years. Increases for years 

four and five will be capped at three percent (3%) per year.

Answer with New Matter and Counterclaim, 4/9/2015, at Exhibit B, 

December 1, 2009, Letter (“December 2009 Letter”).
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Thereafter, on January 5, 2016, Hospital filed a motion for judgment 

on the pleadings, asserting it was entitled to judgment as a matter of law. 

SREC responded with a cross-motion for judgment on the pleadings filed on 

February 4, 2016. The trial court heard oral argument on March 23, 2016, 

and, on March 31, 2016, entered an opinion and order granting Hospital’s 

motion, denying SREC’s cross-motion, and directing SREC to vacate the 

premises. This timely appeal followed.2

On appeal, SREC first argues the trial court erred in granting Hospital’s 

motion for judgment on the pleadings because the court improperly relied on 

disputed facts, and wrongly determined the December Letter did not include 

a “meeting of the minds” concerning rent for the second renewal period. 

See SREC’s Brief at 12-17. Moreover, SREC asserts, at the very least, the 

____________________________________________

2 The trial court did not direct SREC to file a concise statement of errors 

complained of on appeal pursuant to Pa.R.A.P. 1925(b). However, on May 

9, 2016, the trial court entered an order stating the reasons for its March 31, 

2016, ruling were set forth in the accompanying opinion. 

That same day, SREC filed a motion to stay the enforcement of the 

March 31, 2016, order pending appeal. On May 13, 2016, Hospital filed a 

responsive brief opposing the stay, or, in the alternative requesting the court 

direct SREC to file an appeal bond. That same day, the trial court entered 

an order granting SREC’s request for a stay, and directing that SREC 

continue to pay rent on the premises in lieu of an appeal bond. See Order, 

5/13/2016.
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December 2009 letter was ambiguous, and should have been interpreted 

against the drafter, Hospital.3 See id. at 17-21.

When considering an order granting judgment on the pleadings, 

[o]ur review ... is limited to whether the trial court committed an 

error of law or whether unresolved questions of material fact 

remained. Because the question of whether judgment on the 

pleadings was proper is a question of law, our scope of review is 

plenary. 

Grimes v. Enter. Leasing Co. of Philadelphia, LLC, 105 A.3d 1188, 

1192–1193 (Pa. 2014) (internal citations omitted). Furthermore, 

[o]ur review is confined to the pleadings and relevant 

documents. We must accept as true all well pleaded statements 

of fact, admissions, and any documents properly attached to the 

pleadings presented by the party against whom the motion is 

filed, considering only those facts that were specifically admitted. 

We will affirm the grant of such a motion only when the moving 

party's right to succeed is certain and the case is so free from 

doubt that the trial would clearly be a fruitless exercise. 

McLafferty v. Council for the Ass'n of Owners of Condo. No. One, 

Inc., 148 A.3d 802, 806–807 (Pa. Super. 2016).

At issue herein is the parties’ lease agreement, and the purported 

amendment to that agreement contained in the December Letter. By way of 

background, we note:

In Pennsylvania, lease agreements are governed by 

contract law and general contract law principles. As such, 

____________________________________________

3 We note SREC listed these arguments as three separate issues in its brief. 

See SREC’s Brief at 4. However, for ease of disposition, we will address 

them together. 
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when the language of a lease is clear and unequivocal, its 

meaning will be determined by its contents alone in 

ascertaining the intent of the parties. 

Inasmuch as a lease must be construed according to general 

principles of contract law, we are mindful that the primary 

objective in construing a contract is to effectuate the intentions 

of the parties. 

Nonetheless, “[i]t is firmly settled that the intent of the parties 

to a written contract is contained in the writing itself.” 

Accordingly, when the words of a contract are clear and 

unambiguous, we are to determine what the parties intended by 

looking only at the express language of the agreement.

Giant Food Stores, LLC v. THF Silver Spring Dev., L.P., 959 A.2d 438, 

447–448 (Pa. Super. 2008) (internal citations omitted), appeal denied, 972 

A.2d 522 (Pa. 2009).

The trial court provided the following rationale for its ruling granting 

Hospital’s motion for judgment on the pleadings:

The Court finds that the December Letter is not ambiguous 

and must be interpreted on its face. Said Letter provides that 

the parties “may extend the term of the Lease by mutual written 

agreement.” Said language could not have created an option in 

favor of [SREC] without a document confirming the alteration to 

the Lease signed by both parties, as the language clearly states 

the intent that a mutual written agreement be required for the 

possible renewal. Additionally, there was no meeting of the 

minds with regard to rent, a material term of any lease 

agreement. The December Letter further stated, “Any renewal 

of this Lease shall be on the terms and conditions negotiated 

between the parties.” However, the December letter was never 

signed or accepted so it could not have taken effect, as 

evidenced by the fact that the rent was never raised or 

renegotiated by [Hospital] as per the terms of the letter. 

Accordingly, because the Court cannot find that there was a 

meeting of the minds with regard to a Second Renewal Term 

based upon the pleadings, it must grant judgment in favor of 

[Hospital].
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Trial Court Opinion, 3/31/2016, at 4.

SREC first claims the trial court erred in finding SREC “never signed or 

accepted” the December Letter because “both parties agreed in their 

respective motions for judgment on the pleadings that the question of 

whether the December Letter was countersigned and returned was in 

dispute.” SREC’s Brief at 13 (emphasis omitted). We agree. 

While Hospital averred in its answer and new matter to SREC’s 

counterclaim that SREC did not return a signed copy of the December 

Letter,4it acknowledges in its appellate brief that “the issue of whether the 

December Letter was counter-signed and returned is admittedly in 

dispute.” Hospital’s Brief at 9 (emphasis supplied). Indeed, SREC attached 

a signed copy of the December Letter to its counterclaim. See Answer with 

New Matter and Counterclaim, 4/9/2015, at Exhibit B, December Letter. As 

noted supra, a trial court should not grant judgment on the pleadings when 

“unresolved questions of material fact remain[.]” Grimes, supra, 105 A.3d 

at 1192. Accordingly, we find the court erred to the extent that it relied 

upon a disputed fact in ruling for Hospital.

Nevertheless, it is well-established that “[t]his Court may affirm an 

order of the trial court on any basis.” Conestoga Bank v. Tioga 

Investments II, 138 A.3d 652, 659 n.7 (Pa. Super. 2016), appeal denied, 

____________________________________________

4 See Reply to New Matter and Answer and New Matter of Counterclaim, 

5/29/2015, at ¶ 38.
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___ A.3d ___, 2016 WL 4921763 (Pa. Sept. 15, 2016). Here, we find the 

question of whether or not SREC signed and returned the December 2009 

letter was not material to the trial court’s ruling. Indeed, even assuming 

SREC did timely sign and return the letter, under the terms of the 

agreement, SREC could not unilaterally invoke the second renewal option. 

Rather, the December Letter clearly states: “the parties may extend the 

term of this Lease by mutual written agreement.” December Letter, at 1 

(emphasis supplied). “[W]hen the words of a contract are clear and 

unambiguous, we are to determine what the parties intended by looking only 

at the express language of the agreement.” Giant Food Stores, LLC, 

supra, 959 A.2d at 448.

SREC’s remaining arguments do not alter our interpretation of the 

plain language in the December Letter. First, SREC claims the trial court 

“erred by holding that the parties did not reach a meeting of the minds 

regarding the rent amount during the Second Renewal Term.” SREC’s Brief 

at 14. It emphasizes the second renewal option included a rental 

calculation, based upon fair market value, and limited any increase to 15 

percent. See id. at 15. Further, SREC points out the option “included built 

in protection” for Hospital if the 15 percent limit was significantly less than 

fair market value. Id. at 16. Nonetheless, while we agree the parties came 

to a basic understanding of the financial terms for a second renewal period, 

and as the trial court noted, the December Letter also provided that “[a]ny 

renewal of this Lease shall be on the terms and conditions negotiated 
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between the parties.” December Letter, at 2. This language tracks the 

earlier, unambiguous provision that the option had to be invoked by both 

parties in a “mutual written agreement.” Id. at 1. Accordingly, read 

together, these provisions establish the parties contemplated and required 

further discussions before mutually agreeing to a second renewal period. 

Second, SREC’s contention that the December Letter is ambiguous, 

and should be construed against Hospital is also of no moment. SREC 

focuses on the Hospital’s uses of both mandatory (shall) and permissive 

(may) language. See SREC’s Brief at 18. However, that claim only supports 

the trial court’s ruling. While the mandatory language implies the parties 

agreed upon a rental ceiling, the permissive language (“the parties may

extend the term of this Lease”) demonstrates the second rental term was 

not a foregone conclusion. We do not agree this language makes the lease 

ambiguous. 

Moreover, the language of the December Letter does not support 

SREC’s claim that “SREC held an option to renew the Lease, so long as SREC 

was not in default and the rent calculation did not result in rent below fair 

market value.” SREC’s Brief at 20-21. While we recognize the December 

Letter refers to the paragraph at issue as an “option,” the language therein 

clearly provides the second renewal term must be agreed upon by both 

parties in a written agreement, and the renewal “shall be on the terms and 

conditions negotiated between the parties.” December Letter, at 2. 
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Therefore, again, the language indicates the parties contemplated a future 

“mutual” agreement before extending the lease for a second renewal term.

In its remaining claim, SREC argues the trial court erred in denying its 

cross-motion for judgment on the pleadings because “the parties orally 

agreed to modify the Lease to provide SREC the option of a Second 

Renewal Term and SREC properly exercised that option.” SREC’s Brief at 21 

(emphasis supplied). Relying on a decision of a federal district court, AFCO 

Cargo PIT LLC v. DHL Express (USA), Inc., 2010 WL 5140622 (W.D. Pa. 

2010), SREC claims the parties orally agreed to modify the lease, and the 

December Letter was simply a “written confirmation of the oral agreement.” 

SREC’s Brief at 23. Again, we disagree.

Preliminarily, we note AFCO is both non-binding, and factually 

distinguishable from the case sub judice. We remind SREC that 

“pronouncements of the lower federal courts have only persuasive, not 

binding, effect on the courts of this Commonwealth[.]” In re Stevenson, 

40 A.3d 1212, 1221 (Pa. 2012). See also Newman Dev. Grp. of 

Pottstown, LLC v. Genuardi's Family Mkt., Inc., 98 A.3d 645, 657, n.11 

(Pa. Super. 2014) (noting unpublished decision of United States District 

Court for the Eastern District of Pennsylvania, cited by appellant “has no 

precedential value in this matter.”), appeal denied, 117 A.3d 1281 (Pa. 

2015).

Moreover, any potential persuasive authority of the decision is negated 

by its significant factual differences. In AFCO, the landlord and tenant were 
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parties to a five-year lease agreement that specifically granted the tenant 

the right to renew the lease for an additional five-year term. The renewal 

option stated it was “personal to Tenant and shall not be applicable to any 

assignee, subtenant or successor of Tenant.” AFCO., supra, 2010 WL 

5140622Id. at *1. Further, the agreement stated the option had to be 

invoked by the tenant “by the giving of a written notice.” Id. (citation 

omitted). 

The tenant subsequently subleased the property to the sublessee, who 

notified the landlord by email that it intended to renew the lease. The 

landlord acknowledged the written notice requirement, but informed the 

sublessee “[a] formal notice by e-mail would serve this office to confirm your 

renewal of the Lease as per the terms of the agreement.” Id. (citation 

omitted). Thereafter, the sublessee sent an email specifically invoking the 

renewal option and paid rent retroactive to the expiration of the initial lease 

term. However, two years into the new five-year renewal period, the 

sublessee informed the landlord that it was terminating the lease effective 

immediately. See id. at *2.

The landlord subsequently filed a civil action seeking rent due under 

the renewed lease. The sublessee argued that, under the terms of the 

lease, it had no right to renew the lease as a sublessee. See id. Further, it 

also claimed it did not provide written notice of renewal six months prior to 

the end of the lease term, again as required by the lease. See id. In 

denying the sublessee’s motion for judgment on the pleadings, the district 
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court recognized that a written contract “may be modified by subsequent 

words or conduct,” and in the case before it, there were unresolved issues of 

material fact, namely whether the parties modified the written terms of the 

lease by their subsequent conduct. Id. at *4. The court emphasized it 

would be “inequitable” to allow the sublessee to argue it was “incapable of 

renewing the Lease” when it requested the renewal, and paid rent under the 

favorable renewal terms for two years. Id. Moreover, the court also found 

it would be “inequitable to allow [the sublessee] to assert now that its e-mail 

was ineffective to renew the Lease” when the landlord informed the 

sublessee that its email would satisfy the written notice requirement. Id.

Here, however, SREC does not point to any conversations or conduct 

subsequent to the December Letter that would have altered the terms of 

that written agreement. Rather, SREC emphasizes the December Letter was 

written to “confirm” the parties’ earlier telephone conversation. SREC’s Brief 

at 23. Accordingly, the terms of the renewal option provided for in the 

December Letter were those agreed upon by the parties. Had SREC believed 

the renewal option was within its sole discretion, it could have requested an 

amendment to the December Letter reflecting that language.5 Accordingly, 

____________________________________________

5 We note, too, that the parties’ conduct in invoking the first renewal option 

supports our interpretation of the agreement. SREC sent a letter to Hospital 

on January 7, 2009, advising Hospital that it was exercising its option to 

renew the lease. See Complaint, 3/11/2015, Exhibit B. The December 

Letter that followed states, in relevant part: “[Hospital] accepts your 

(Footnote Continued Next Page)
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we find the trial court did not err in denying SREC’s cross-motion for 

judgment on the pleading.

Order affirmed.

Judgment Entered.

Joseph D. Seletyn, Esq.

Prothonotary

Date: 3/14/2017

(Footnote Continued) _______________________

option to renew the lease for an extended term beginning February 1, 2010 

and ending January 31, 2015.” December Letter, at 1 (emphasis supplied).