J-A22002-16

NON-PRECEDENTIAL DECISION - SEE SUPERIOR COURT I.O.P. 65.37

ELMER E. KING IN THE SUPERIOR COURT OF

PENNSYLVANIA

Appellee

v.

RAY HARNISH & STACI HARNISH

Appellants No. 278 MDA 2016

Appeal from the Order Entered January 22, 2016

in the Court of Common Pleas of Lancaster County

Civil Division at No(s): CI-13-01858

BEFORE: GANTMAN, P.J., PANELLA, J., and JENKINS, J. 

MEMORANDUM BY JENKINS, J.: FILED OCTOBER 21, 2016

Ray and Staci Harnish (“Appellants”) appeal from the January 22, 

2016 order of the Lancaster County Court of Common Pleas granting in part 

and denying in part their Petition for Return of Escrow Funds. After careful 

review, we vacate the trial court’s order and remand for further proceedings.

This matter has a long and tortured history. The pertinent facts and 

procedural posture are as follows. On December 18, 2009, Appellants and 

Elmer King (“Appellee”) entered into a Lease Agreement for Appellee’s 

residential property located at 6020 Mast Road, Narvon, Lancaster County, 

Pennsylvania (“the property”). The Lease Agreement provided a rental 

amount of $1,000.00 for the first six months, and $1,050.00 for each month 

for the remainder of the one-year lease term, which would renew 

automatically for an additional one-year term if not properly terminated 
J-A22002-16

- 2 -

before the expiration of the lease term. See Lease Agreement, p. 1, ¶ 5, p. 

2, ¶ 6. The Lease Agreement further provided that Appellee would complete 

certain reparations to the property prior to Appellants’ move-in date.1 See

Lease Agreement, p. 2, ¶ 12.

After living in the property for three years, Appellants ceased rental 

payments. As a result, Appellee presented Appellants with a notice to quit 

and provided notice of termination of the Lease Agreement on December 28, 

2012. Appellants did not vacate the premises, and Appellee filed a 

landlord/tenant complaint with the local Magisterial District Justice (“MDJ”). 

On February 20, 2013, the MDJ entered judgment in favor of Appellee in the 

amount of $1,777.10, and awarded Appellee possession of the property if 

the money judgment remained unpaid by the date of eviction.

Appellants appealed the MDJ’s decision to the Lancaster County Court 

of Common Pleas and, on March 4, 2013, filed a praecipe to enter a rule to 

file complaint. Appellee filed a complaint on April 1, 2013, seeking 

possession of the property and damages for $5,472.00 of unpaid rent. See

Complaint.

____________________________________________

1 Specifically, the repairs included “painting to be completed, water to home 

& barn up and running, oil heater ready to operate, electrical fixed and 

working.” See Lease Agreement, p. 2, ¶ 12. Appellee completed some 

repairs at the property and attempted to arrange to make the other repairs. 

However, Appellants repeatedly ignored Appellee’s phone calls and would 

not answer the door when Appellee went to the property.
J-A22002-16

- 3 -

Appellees failed to file a responsive pleading, and on May 30, 2013, 

the Prothonotary of the Lancaster County Court of Common Pleas entered 

judgment in favor of Appellee in the amount of $5,472.00. Further, on June 

4, 2013, Appellee filed a praecipe for writ of possession, and Appellants were 

scheduled to be evicted on July 16, 2013.

Following a successful petition to open default judgment,2 Appellants 

filed their Answer to the Complaint on June 17, 2013. In their Answer, 

Appellants claimed Appellee refused for nearly three years to make the 

agreed upon repairs. See Defendants’ Answer to Plaintiff’s Complaint, p. 1, 

¶ 3. The Answer further claimed that Appellants had escrowed the rental 

payments due with a bank.3 See id. at pp. 1-2, ¶ 5.

On August 15, 2013, Appellee filed a petition requesting that funds 

deposited by Appellants in the escrow fund be released to him, and be 

continually released to him on a monthly basis. On August 16, 2013, the 

____________________________________________

2 Appellants claimed in their petition to open default judgment that, despite 

having left more than four voicemail messages with their counsel and having 

also written to their counsel in excess of three times, counsel did not notify 

them that they needed to respond to Appellee’s complaint.

3 After filing their Answer, Appellants henceforth deposited the monies due 

under the Lease Agreement with the Lancaster County Court of Common 

Pleas Prothonotary.
J-A22002-16

- 4 -

Lancaster County Court of Common Pleas’ business judge granted this 

petition.4

On September 4, 2013, Appellee filed an amended complaint claiming 

that, in addition to the sums Appellants paid to the Prothonotary and 

released to Appellee, rental arrearage of $3,694.905remained outstanding. 

See Amended Complaint.6 The amended complaint further sought 

immediate possession of the property. Id.

On September 23, 2014, Appellee requested arbitration. However, in 

between the September 23, 2014 filing of the request for arbitration and the 

December 18, 2014 arbitration, the court terminated the supersedeas of the 

appealed MDJ decision based on Appellants’ failure to pay rent to the 

Prothonotary. This terminated Appellants’ appeal of the MDJ award. As a 

result, on October 30, 2014, Appellants filed an application to make escrow 

____________________________________________

4 Clearly, Appellants should have been awarded an opportunity to respond to 

Appellee’s request. On August 19, 2013, apparently unaware of the August 

16, 2013 order, Appellants filed an objection to the release of the escrow 

funds without a hearing. Obviously, the order had already been entered. 

Appellants never appealed this order.

5 This claimed arrearage amount represented the difference between the 

original rents claimed ($5,472.00) and the judgment entered by the MDJ 

($1,777.10).

6 Between the petition to release escrow funds and the filing of the amended 

complaint, in February 2014, counsel for Appellants filed a motion to 

withdraw as counsel, claiming a complete failure of communication on behalf 

of Appellants as well as a failure to pay counsel fees. Counsel withdrew the 

petition in March 2014.
J-A22002-16

- 5 -

payments nunc pro tunc, explaining their failure to make those payments 

had resulted from “an honest mistake and apparent miscommunication on 

behalf of [Appellants] during a particular difficult personal time,” and arguing 

that “to permit dismissal of [Appellants’] appeal in this matter would deny 

[Appellants’] of their fair day in [c]ourt, something the legal profession has 

worked to avoid in all matters.” Application for Leave, ¶¶ 4, 18, 20. The 

trial court allowed Appellants to pay the amounts due into escrow, and they 

did. The court then withdrew the order terminating supersedeas.

The arbitration occurred on December 18, 2014. However, neither 

Appellee nor his new counsel7appeared at the arbitration. Accordingly, the 

arbitrator entered judgment for Appellants and against Appellee on the 

amended complaint. Appellee’s new counsel was served with a copy of the 

arbitrator’s award. Appellee did not appeal the arbitration decision. On 

February 9, 2015, Appellants filed a praecipe to enter judgment, and 

judgment was entered with notification mailed to Appellee.8

On April 9, 2015, Appellants filed a petition for the return of all 

deposited escrow funds deposited with the Prothonotary since July 2013, 

which Appellants claimed exceeded $20,000.00. In their petition, Appellants 

____________________________________________

7 Appellee changed counsel five weeks prior to the arbitration, on November 

10, 2014.

8 This praecipe had also been served on Appellee’s new counsel.
J-A22002-16

- 6 -

claimed the arbitrator’s award represented an award in their favor on all 

counts of the amended complaint, and thus they were entitled to recovery of 

all amounts previously paid into escrow. The business judge entered a rule 

to show cause why Appellant’s request should not be granted, and the rule 

was served on Appellee’s new counsel.

Following receipt of the trial court’s rule to show cause, on May 4, 

2015, Appellee filed a pro se response to the petition to return all escrowed 

funds. In the response, Appellee claimed a date mix-up caused him to miss 

the arbitration, and further that he was not then aware of the arbitrator’s 

ruling. See Appellee’s Response to Petition to Return Escrow Funds, ¶¶ 3, 6.

On September 10, 2015, treating Appellee’s response to the petition to 

return the escrowed funds as a petition to open judgment, the trial court 

entered an order denying Appellants’ petition for the return of all escrow 

funds. Appellants filed a motion for reconsideration, which the trial court 

denied on September 30, 2015. However, on October 8, 2015, the trial 

court vacated its September 30, 2015 order and scheduled argument on 

Appellants’ motion for reconsideration.

On November 10, 2015, the trial court entered an order granting in 

part and denying in part Appellants’ motion for reconsideration. Specifically, 

the trial court scheduled a hearing regarding Appellants’ petition for return 

of all escrow funds for December 18, 2015. The court further directed the 

parties to be prepared to address the issue of whether Appellants were 

entitled to recover rent escrow amounts from Appellee as a result of any 
J-A22002-16

- 7 -

breach of the Lease Agreement. Further, the trial court noted the hearing 

would not include any claim by Appellee for the $3,694.90 in unpaid rent set 

forth in his amended complaint that was covered by the previous arbitration 

award entered against Appellee on December 18, 2014.

Following the hearing on December 18, 2015, and subsequent 

submissions by the parties, on January 22, 2016, the trial court granted in 

part and denied in part Appellants’ petition for return of escrow funds.9 

Specifically, the court held as follows:

1. [Appellants’] Petition is GRANTED to the extent that 

[Appellee] is directed to pay [Appellants] the amount of 

$1,145.57 as reimbursement for the expenses incurred by 

[Appellants] as set forth in [Appellants’] Exhibit D-3. Said 

payment shall be forwarded to counsel for [Appellants], [] within 

thirty (30) days of the date of this order; and

2. [Appellants’] Petition is DENIED in all other respects, and 

[Appellee] shall be permitted to retain the balance of the escrow 

funds in the amount of $21,631.53 as rent for [Appellants’] 

possession of the property.

Trial Court Order, January 22, 2016.

Appellants filed a timely notice of appeal on February 16, 2016. Both 

Appellants and the trial court complied with Pa.R.A.P. 1925.

____________________________________________

9 After the hearing but before the trial court’s order on the matter, Appellee 

filed a post-hearing submission. On January 26, 2016, after the trial court 

entered its order, Appellants filed a petition to strike Appellee’s post-hearing 

submission as irrelevant, inaccurate, and inflammatory. The trial court 

granted the petition and explained that Appellee’s post-hearing submission 

had no bearing on the court’s ruling.
J-A22002-16

- 8 -

Appellants raise the following claims for review, reordered for ease of 

disposition:

A. Did the Honorable [t]rial [c]ourt err by finding that [Appellee] 

had not waived his claim to the escrowed rental payments 

despite failing to include a claim for such monies in his 

[a]mended [c]omplaint?

B. Did the Honorable [t]rial [c]ourt err and abuse its discretion 

by ordering a hearing to address what escrow amounts were due 

to be returned to [Appellants], in effect granting [Appellee] a 

trial de novo despite the fact that [Appellee] had not adequately 

used the legal remedies available to him?

C. Did the Honorable [t]rial [c]ourt err by failing to award 

[Appellants] a return of the monies paid into the Prothonotary 

despite the fact that [Appellee] had never established a right to 

receive such monies despite carrying the burden of proof to do 

so?

Appellants’ Brief, p. 6.

Our standard of review in non-jury cases is limited to a determination 

of whether competent evidence supports the findings of the trial court and 

whether the trial court committed error in the application of law. Company 

Image Knitware, Ltd. v. Mothers Work, Inc., 909 A.2d 324, 330 

(Pa.Super.2006), appeal denied, 929 A.2d 645 (Pa.2007). We consider the 

evidence in a light most favorable to the verdict winner and will reverse the 

trial court only if its findings of fact are not supported by competent 

evidence or if its findings are premised on an error of law. Allegheny 

County Housing Authority v. Johnson, 908 A.2d 336, 340 

(Pa.Super.2006). Further, we “will respect a trial court’s findings with 

regard to the credibility and weight of the evidence unless the appellant can 
J-A22002-16

- 9 -

show that the court’s determination was manifestly erroneous, arbitrary and 

capricious or flagrantly contrary to the evidence.” J.J. DeLuca Co. v. Toll 

Naval Associates, 56 A.3d 402, 410 (Pa.Super.2012) (citation omitted). 

With respect to questions of law, our standard of review is de novo and our 

scope of review is plenary. Step Plan Services, Inc. v. Koresko, 12 A.3d 

401, 408 (Pa.Super.2010). Finally, because contract interpretation is a 

question of law, this Court is not bound by trial courts’ interpretations. 

Miller v. Poole, 45 A.3d 1143, 1145 (Pa.Super.2012).

Appellants first claim the trial court erred by failing to determine that 

Appellee waived his claim to the escrowed funds by not including such a 

claim in his amended complaint. See Appellants’ Brief, pp. 19-20. This 

claim lacks merit.

As the trial court noted, courts should consider “the factors necessary 

for an equitable and just conclusion[]” in deciding landlord-tenant matters. 

Albert M. Greenfield & Co., Inc. v. Kolea, 380 A.2d 758, 760 (Pa.1977). 

The trial court explained its reasoning as to why Appellee did not waive his 

claim to the escrow funds in its November 10, 2015 order granting 

Appellant’s motion for reconsideration of the denial of the request for return 

of all escrowed monies. There, the trial court explained:

During the pendency of this action [t]he Honorable Jeffrey D. 

Wright issued an Order on August 15, 2013 granting [Appellee’s] 

Petition to Release Escrow Funds, and ordered that the funds 

deposited in escrow by [Appellants] be released and continue to 

be released monthly to [Appellee]. Unfortunately, the 

Prothonotary failed to serve [Appellants] or their counsel with a 

copy of said Order. Subsequently, having received the monthly 
J-A22002-16

- 10 -

escrow payments, [Appellee] filed an Amended Complaint 

asserting a claim for only those rental amounts which remained 

unpaid. [Appellants] filed an Answer to [Appellee’s] Amended 

Complaint without New Matter or a Counterclaim. This [c]ourt is 

of the opinion that had [Appellants] been advised properly by 

the Prothonotary of the entry of Judge Wright’s Order of August 

15, 2013, (which released [Appellants’] escrowed rental 

payments to [Appellee]), the [Appellants] would have filed an 

appropriate Counterclaim against [Appellee] which would have 

permitted the Arbitration Panel to address the issue. Without 

said Counterclaim, the Arbitration Panel could only address those 

issues in the Amended Complaint properly before them which did 

not include a determination of which party was entitled to the 

rental payments placed in escrow. Given [Appellants’] continued 

possession of the property and [Appellee’s] receipt of the 

monthly rental payments, the filing of the Amended Complaint 

did not result in any abandonment by [Appellee] of his claim for 

rental payments.

Trial Court Order, November 10, 2015, p. 2 n.1. The trial court continued to 

further explain the necessity of a full hearing on the merits as follows:

Accordingly, the only equitable manner in which to resolve this 

dispute is to hold a hearing on [Appellants’] Petition for Return of 

All Escrow Funds. All parties should be prepared to address the 

issue of whether [Appellee] is entitled to the rental payments 

released from escrow and whether [Appellants] are entitled to 

any set-off.

Id.

We find no error of law or abuse of discretion in the trial court’s 

decision or reasoning.

Next, Appellants claim the trial court abused its discretion by holding a 

hearing on the merits of the matter on December 18, 2015. See Appellants’ 

Brief, pp. 20-26. They claim Appellee never filed a motion to open the 

arbitrator’s judgment awarded in their favor when Appellee did not present 

at the arbitration. Id. However, implicit in our determination supra that 
J-A22002-16

- 11 -

Appellee did not waive his claim to the escrowed funds is the determination 

that the trial court did not abuse its discretion by holding a hearing on the 

merits of the matter on December 18, 2015. Accordingly, we need not 

further address Appellants’ second claim herein.

Finally, Appellants claim that the trial court erred in awarding Appellee 

the monies paid into escrow. See Appellants’ Brief, pp. 16-18. To a limited 

extent, we agree with Appellants.

The trial court explained its award of the escrow monies in terms of 

equity as follows:

In this case, I balanced the relative equities between the parties 

and decided to grant [Appellee] the almost $22,000.00 in escrow 

funds as rent for [Appellants’] possession of his rental property 

for over two years after this action was begun. After a review of 

the pleadings and the testimony at the evidentiary hearing, I 

based my decision upon the following facts, []:

1. On December 18, 2009, the parties entered into a 

Residential Lease Agreement . . . [which] Agreement was a 

bona fide agreement wherein the parties were of equal 

bargaining power and all parties negotiated their own 

provisions. . . .;

2. Paragraph 12 of the Lease Agreement noted: ‘Tenant 

has inspected the property and agrees to accept the 

property “as-is” except for the following: painting to be 

completed, water to home and barn up and running, oil 

heater ready to operate, electrical fixed and working’;

. . .

5. Notwithstanding [Appellants’] knowledge of the 

condition of the leased premises at the time they entered 

into the Lease Agreement, [Appellants] knowingly, 

voluntarily and intelligently executed the Lease 

Agreement, moved into the premises, and remained in the 

leased premises for five years until December 17, 2014;
J-A22002-16

- 12 -

6. The testimony of [Appellee] that [Appellants’] conduct 

prevented [Appellee] from reasonable efforts to inspect 

and repair the property is credible;

7. The testimony of . . . Stacy Harnish with regard to the 

condition of the property and the efforts made by 

[Appellee] to make needed repairs is less than credible;

8. The vast majority of the items listed by [Appellants] as 

needing repair do not impact the implied warranty of 

habitability and constitute improvements beyond the terms 

and conditions of the Lease Agreement;

9. Any items which impacted the implied warranty of 

habitability were either repaired by [Appellee] and/or 

[Appellants], or [Appellee] was prevented from repairing 

said items by [Appellants’] conduct or actions; . . . 

(See Order of January 22, 2016 (emphasis added)[])[.]

[Appellants] lived in [Appellee’s] rental property for three 

years before they decided the condition precedent had not been 

satisfied, the lease was breached, and the rent was no longer 

due and owing to [Appellee]. The uninhabitable conditions in 

which they claim to have been forced to live, they chose to live 

in for three years. The lease was a year-to-year term. At the 

expiration of the lease at the conclusion of the first year, and the 

second year, and the third year, [Appellants] exercised their 

option to remain in the rental property rather than flee the 

uninhabitable conditions in which they found themselves. After 

the commencement of this action, [Appellants] refused to 

relinquish possession of the rental property and chose to remain 

in what they deemed an uninhabitable home for an additional 

two years. It was their expectation to have their escrow 

payments refunded for two years of rent-free living in 

[Appellee’s] property. 

. . .

The evidence at the hearing established that the repairs 

identified in the lease were either made by [Appellee], or efforts 

by [Appellee] to make the repairs were thwarted by 

[Appellants]. In either case, [Appellants] were not relieved of 

their duty under the lease to make the required rental 

payments. Accordingly, [Appellee] was entitled to retain the 

escrowed funds with the exception of $1,145.57 as 
J-A22002-16

- 13 -

reimbursement for the expenses incurred by [Appellants] for 

sewer and heater maintenance for which the landlord, 

[Appellee], was responsible.

Pa.R.A.P. 1925(a) Opinion, filed March 23, 2016, pp. 14-16.

This resolution ignores the trial court’s express statement prior to the 

December 18, 2015 hearing that the hearing would not address any claim by 

Appellee for the $3,694.90 in unpaid rent set forth in his amended complaint 

that was covered by the previous arbitration award entered against Appellee 

on December 18, 2014. Despite that qualification of the scope of the 

hearing, and based solely on its view of the equities in this matter, the trial 

court awarded Appellee the entirety of the escrowed funds, minus $1,145.57 

Appellants incurred in repair costs. This award included the $3,694.90 

previously awarded by the arbitrator which the trial court had indicated 

would not be addressed or altered. Based on the trial court’s prior 

representations, this was error.10

____________________________________________

10 In addition to the trial court indicating it would not revisit the arbitrator’s 

award, we further note that we cannot agree with the court’s 

characterization of Appellee’s pro se letter response to its rule to show cause 

why the trial court should not grant Appellants’ Petition for Return of All 

Escrow Funds (“Appellee’s letter response”) as a petition to open judgment. 

As this Court has explained, normally “[t]o open a default judgment, a party 

must: (1) promptly file a petition to open judgment; (2) provide a 

meritorious defense; and (3) offer a legitimate excuse for the delay in filing 

a timely answer.” Reid v. Boohar, 856 A.2d 156, 160 (Pa.Super.2004). 

“[A]ll three factors must appear before a court is justified in opening a 

default judgment.” McCoy v. Pub. Acceptance Corp., 305 A.2d 698, 700 

(Pa.1973). Here, Appellee did not file a petition to open judgment. Initially, 

Appellee’s letter response was technically a legal nullity, as Appellee was 

represented by counsel at the time. See Commonwealth v. Ali, 10 A.3d 

282, 293 (Pa.2010) (explaining that a pro se filing presented by an appellant 

(Footnote Continued Next Page)
J-A22002-16

- 14 -

For the foregoing reasons, we vacate the trial court’s January 22, 2016 

order granting in part and denying in part Appellant’s Petition for Return of 

Escrow Funds and remand the matter for further proceedings.

Order vacated. Case remanded. Jurisdiction relinquished.

Judgment Entered.

Joseph D. Seletyn, Esq.

Prothonotary

Date: 10/21/2016

(Footnote Continued) _______________________

represented by counsel is a “legal nullity”). Further, simply stated, 

Appellee’s letter response was not a petition affirmatively filed to request 

that the trial court open the judgment entered against Appellee. Instead, 

the letter response was Appellee’s defensive reply to the trial court’s rule to 

show cause regarding Appellants’ requested return of escrowed funds. While 

we acknowledge that the equities of a case may play a large role in a trial 

court’s determination of a petition to open judgment, a party must still file a 

timely petition requesting that the trial court open a judgment. McCoy, 305 

A.2d at 700. Appellee simply did not file a petition to open in this matter, 

and we decline to stretch the bounds of equity so far as to construe 

Appellee’s letter response as such.