Court Opinion

ID: 4386437
Source: CourtListenerOpinion
Date Created: 2019-04-11 17:41:34.216874+00
Date Added: 2024-06-11T14:50:32.930394
License: Public Domain

J-A23039-18

NON-PRECEDENTIAL DECISION - SEE SUPERIOR COURT I.O.P. 65.37

ALLURE HAIR DESIGNS AND MINI SPA,                     IN THE SUPERIOR COURT
INC.                                                     OF PENNSYLVANIA

                           APPELLEES

                      v.

JOHN S. GEORGE, JR. AND JAAM REAL
ESTATE HOLDINGS, LLC,

                           APPELLANTS                     No. 588 WDA 2018

                     Appeal from the Order April 18, 2018
              In the Court of Common Pleas of Allegheny County
                      Civil Division at No: GD16-005896

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ALLURE HAIR DESIGNS AND MINI SPA,                     IN THE SUPERIOR COURT
INC.                                                     OF PENNSYLVANIA

                           APPELLANTS

                      v.

JOHN S. GEORGE, JR. AND JAAM REAL
ESTATE HOLDINGS, LLC,

                        APPELLEES

                                                          No. 629 WDA 2018

                 Appeal from the Order Entered April 18, 2018
              In the Court of Common Pleas of Allegheny County
                      Civil Division at No: GD16-005896

BEFORE: BOWES, SHOGAN AND STABILE, JJ.

MEMORANDUM BY STABILE, J.:                                FILED APRIL 11, 2019
J-A23039-18

      These consolidated appeals arise from a landlord-tenant dispute in

which the tenant, Allure Hair Designs and Mini Spa, Inc. (“Allure”), sued the

landlord, John S. George, Jr. (“George”), and a limited liability company

owned by George, Jaam Real Estate Holdings, LLC (“Jaam”), for breach of

contract and fraud.     The trial court, sitting without a jury, entered a

memorandum and decision            in Allure’s favor   on the contract claim.

Unfortunately, the memorandum did not address many of the issues raised by

the parties in their cross-appeals. Moreover, following the cross-appeals, the

court failed to file a Pa.R.A.P. 1925(a) opinion. To remedy these omissions,

we remand with directions for the trial court to prepare a detailed opinion on

all issues raised by the parties in their cross-appeals.

      On August 6, 2004, George leased Allure 1,309 square feet within a

shopping   center   located   at    171   Wexford   Bayne   Road   in   Wexford,

Pennsylvania. The lease provided that Allure leased

      those certain premises designated on the attached Exhibit “A” as
      Tenant Suite No. 1 containing one thousand three hundred nine
      (1,309) square feet (“Leased Square Feet”) of space (hereinafter
      the “Premises”), within a commercial building located at 171
      Wexford-Bayne Road (hereinafter referred to as “Building”) in
      Wexford, Pennsylvania. The premises represent 21.4 percent of
      the total occupiable square footage of the Building.

Lease, 8/6/04, at 1.     The lease included a Noncompetition Clause that

provided that Allure would be the only hair salon in the Premises: “Lessor shall

not lease, rent or permit any tenant or occupant of the Premises, other than

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the lessee, to conduct any activity on the premises which consists of skin care,

pedicure, manicure, or hair design/styling services.” Id. at 15.

      The trial court wrote:

      The Lease was initially for a five (5) year term expiring October
      31, 2009. Although Allure had options to renew the Lease for
      additional five (5) year periods after the expiration of the initial
      term, it declined to exercise such options.         Instead, Allure
      preferred to enter into one (1) year lease extensions in each of
      the next seven (7) years following the initial term. The most
      recent extension was executed by the parties on or about
      September 21 2015 and covered the period November 1, 2015
      through October 31, 2016. On April 14, 2016, George notified
      Allure that he was terminating the Lease at the expiration of the
      current extension (i.e., October 31, 2016). He also indicated he
      would consider negotiating a new lease with Allure as long as the
      new lease did not contain a non-competition clause. At the time
      of the hearing in this matter, the parties had not negotiated a new
      lease and the Allure Lease expired on October 31, 2016.

      Defendant [Jaam] is a limited liability company owned by George.
      Jaam acquired property situated at 181 Wexford-Bayne Road,
      which is adjacent to the property owned by George at 171
      Wexford-Bayne Road, by deed dated November 16, 2010 and
      recorded January 6, 2011. The 181 Wexford-Bayne Road property
      has been developed by [George and Jaam] almost identical[ly] to
      the 171 Wexford-Bayne Road property in terms of appearance and
      design. The two properties have separate buildings, but they
      share a curb cut (as well as parking and common area expenses),
      and the properties have been consolidated into a single lot and
      block number on the Allegheny County real estate website.

      Allure’s owners began to hear rumors in 2015 of a new salon
      locating to [the 181 Wexford-Bayne Road] property and
      confronted George about it prior to entering into their current one-
      year lease extension. George denied entering into a lease with a
      competing tenant, despite the fact that he had been negotiating
      with Sola Salon, a business that provides hair salon services
      similar to Allure but on a larger scale. On November 10, 2015,
      [Jaam] entered into a ten (10) year lease with Eleven Eleven
      Pennsylvania, LLC (d/b/a Sola Salon Studios) for a portion of the
      building constructed on 181 Wexford-Bayne Road. Sola Salon has

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      constructed substantial tenant improvements totaling $663,000 in
      the property and is paying annual rent to Jaam in the amount of
      $135,450. When Allure learned of Sola Salon Opening in the
      adjacent building, Allure asked to be released from the remaining
      eight (8) months of its lease so it could pursue other space in the
      area, but Defendants refused.

Trial Court Memorandum, 2/2/18, at 1-3.

      Allure filed a complaint against George and Jaam alleging breach of

contract and later amended its complaint to add a count for fraud.          Allure

alleged   in   its   contract   claim   that   George   and   Jaam   breached   the

Noncompetition Clause in Allure’s lease by entering a lease with a competing

hair salon, Sola Salon, for space in the building next door to Allure. Allure

alleged in its fraud claim that George fraudulently induced Allure to renew its

lease by lying that he was not negotiating a lease with a rival salon.

      On February 2, 2018, following a non-jury trial, the trial court entered

a memorandum and order ruling in favor of Allure on its breach of contract

claim in the amount of $20,392.40. Id. at 5. The trial court held that George

and Jaam breached the Noncompetition Clause in Allure’s lease by entering a

lease with a competing hair salon, Sola Salon, for space in the building next

door. The court, however, did not award damages on Allure’s fraud claim,

even though it criticized George’s fraudulent behavior in the course of deciding

the contract claim. Id. at 6 (observing that George “chose . . . to lie to [Allure]

about, or at least conceal, the fact that he was leasing to another hair salon”).

      Allure filed post-trial motions in which it complained that the trial court

failed to award various items of damage on the contract claim and failed to

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decide the fraud claim. George and Jaam filed post-trial motions as well. The

trial court denied the parties’ post-trial motions, and they cross-appealed to

this Court at the above captioned numbers. The trial court did not order the

parties to file Pa.R.A.P. 1925(b) statements and did not file a Pa.R.A.P.

1925(a) opinion. Allure subsequently perfected all appeals by filing a praecipe

for entry of judgment on the decision.

      Allure raises the following issues in its appeal at 629 WDA 2018:

      I. Whether the trial court erred in denying [Allure]’s Motion for
      Post-Trial Relief?

      II. Whether the trial court erred in as a matter of law in denying
      the issues raised by [Allure]’s Motion for Post-Trial Relief as
      follows:

         a. The Court did not issue a ruling on the claim of Fraudulent
         Misrepresentation, which was added by way of Amended
         Complaint on January 5, 2017, and properly before the Court,
         especially as the Court found “Defendant George also chose to
         either lie to [Allure] about, or at least conceal, the fact that he
         was leasing to another hair salon.”

         b. Additionally, the Court erred in failing to analyze the
         damages through Restatement Second of Property; Landlord &
         Tenant 7.2 as prescribed in Teodori v. Werner, 415 A.2d 31,
         34 (Pa. 1980).

         c. By failing to find that [Allure], as tenant, had the first right
         of refusal under the lease and [was] therefore entitled to
         remain on the property indefinitely and that the Landlord’s
         termination of the lease was impermissible under Section 2 of
         the Lease.

      III. Whether the Court abused its discretion in ruling against the
      weight of the evidence in the following manners:

         a. By failing to award lost profits to [Allure] under either of the
         following two arguments: 1.) the employees left [Allure] as a

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         direct consequence of the Defendants’ actions in leasing the
         property to a competitor; and/or 2.) [Allure] was not able to
         fill open positions in a timely manner as a result of
         Defendant[s] leasing the property to a competitor, leading to
         significant lost profits.

         b. By failing to rule in favor of the weight of the clear evidence
         that [Allure] was unable to fill empty employment positions for
         over six months, thereby causing lost profits, as a direct result
         of the Defendants’ action.

         c. By failing to consider the lost profits as introduced into
         evidence at trial by Judy Campbell between the 2016 and 2015
         tax returns in the amount of $60,919.00.

         d. By failing to award moving and construction costs in light of
         evidence presented at trial in the amount of $40,960.20 and
         the Restatement Second of Property; Landlord & Tenant 10.2
         in light of the evidence presented.

         e. The Court’s determination that text messages between
         [Allure] and a prospective employee were inadmissible hearsay
         and not properly authenticated over [Allure]’s objections that
         it was admissible evidence as provided under Commonwealth
         v. Mosley, 114 A.3d 1072 (Pa. Super. 2015); see also
         Commonwealth v. Koch, 106 A.3d 705 (Pa. 2014). Tamara
         McCleary was not permitted to testify as to her own text
         messages which she sent and received. This evidence would
         have further established [Allure]’s inability to fill critical
         positions, i.e., further evidence of lost profits[,] as profits are
         generated by having stylists in the salon.

Allure’s Brief at 4-7.

      George and Jaam raise the following issues in their cross-appeal at 588

WDA 2018:

      I. Whether the court erred as a matter of law in finding that a
      lease in after-acquired property was a breach of the non-
      competition restrictions.

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      II. Whether Landlord/Appellants are entitled to judgment as a
      matter of law since the trial court held the damages claimed were
      not proven or proximately caused by the actions complained of.

      III. Whether the court erred as a matter of law by basing its
      decision on its decision on its belief that Landlord “made a poor
      business decision in holding [Allure] to the remaining months of
      its lease” and therefore awarding rent abatement.

George and Jaam’s Brief at 4.

      To review these cross-appeals properly, we require the trial court’s

analysis of all issues raised in the parties’ briefs.      The February 2, 2018

memorandum and order implicitly denies Allure’s fraud claim but fails to

provide any reason for this decision. The memorandum and order further did

not explain why the court denied lost profits. Nor did the court file a Pa.R.A.P.

1925 opinion following the parties’ cross-appeals that examined each issue

raised by the parties. A comprehensive trial court opinion that addresses all

issues raised on appeal is essential to the appellate process. The absence of

such an opinion in this case is impeding effective appellate review.

      Accordingly, we remand this case with instructions for the trial court to

prepare a detailed opinion on all issues raised in the parties’ briefs. To assist

the trial court in performing this duty, we direct the prothonotary to remand

the certified record to the trial court along with all briefs filed by the parties in

this Court. Within thirty days after receipt of the certified record, the trial

court shall file its opinion with its prothonotary, who shall promptly transmit

the certified record and opinion back to this Court for further review.

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      Case remanded for proceedings in accordance with the foregoing

instructions. Jurisdiction retained.

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