Court Opinion

ID: 9906552
Source: CourtListenerOpinion
Date Created: 2023-12-04 15:22:22.495372+00
Date Added: 2024-06-11T09:25:12.072036
License: Public Domain

IN THE COMMONWEALTH COURT OF PENNSYLVANIA

Antoine Gardiner, Bizness                    :
as Usual Inc., Biz as Usual LLC,             :
and King Kole Cafe Inc.,                     :   No. 382 C.D. 2022
                    Appellants               :
             v.                              :   Submitted: November 6, 2023
                                             :
City of Philadelphia                         :

BEFORE:      HONORABLE PATRICIA A. McCULLOUGH, Judge
             HONORABLE MICHAEL H. WOJCIK, Judge
             HONORABLE MARY HANNAH LEAVITT, Senior Judge

OPINION NOT REPORTED

MEMORANDUM OPINION
BY JUDGE McCULLOUGH                                    FILED: December 4, 2023
             Appellants Antoine Gardiner (Gardiner), Bizness as Usual Inc., Biz as
Usual LLC, and King Kole Cafe, Inc. (Corporate entities) (collectively, Landowners)
appeal from the April 5, 2022 judgment entered by the Court of Common Pleas of
Philadelphia County (trial court) in favor of Appellee City of Philadelphia (City) on
Landowners’ claims for declaratory and injunctive relief. Landowners argue on appeal
that the trial court erred in concluding that Landowners materially breached a
settlement agreement (Agreement) that they executed with the City to secure
substantially reduced tax and municipal liabilities. After careful review, we affirm.
                  I.     FACTS AND PROCEDURAL HISTORY
             The trial court cogently summarized the material facts of this case, which
we restate, in pertinent part, as follows:
             This matter arises from [the] [Agreement] entered into by
             [Landowners] with the [City] on August 14, 2019[,] to resolve
             [Landowners’] outstanding real estate taxes, water bills,
             [business income and receipts tax (BIRT)] delinquencies,
             [u]se and [o]ccupancy tax delinquencies, [ ] [judgments]
             taken by [the City’s Department of Licenses and Inspections
              (L&I)], and various penalties assessed pursuant to the
              Philadelphia Code [(Phila. Code)].[1] The combined liabilities
              owed by [Landowners] to the City totaled $2,298,669[.00].[ ]
              [ ] [Landowners] have owned some [65] properties
              throughout [the City] for the past [30] years. In March[ ]
              2019, [ ] Gardiner and representatives of the City[’s]
              [Department of Revenue] met to reach a resolution to collect
              the delinquent balances owed by [Landowners]. As a result
              of that meeting, the parties entered into the [ ] Agreement.
              The City agreed to significantly discount the amount owed
              [(Total Liabilities)] to $1,650,000[.00,] in exchange for
              [Landowners’] agreement to make installment payments to be
              completed by July 1, 2021[,] without the need for further
              litigation to collect the arrearages.
              The [pertinent] terms [of the Agreement] are set forth in
              paragraph K [of the Agreement] [and read] as follows:
              [ ] To resolve the Total Liabilities without the need for
                  additional litigation, the City agrees to resolve Total
                  Liabilities, as referenced on Exhibits A through I, for a
                  settlement amount of [$1,650,000.00 (Settlement
                  Amount)], to be paid in quarterly installments beginning
                  on or before September 3, 2019[,] with an initial payment
                  in the amount of $412,500.00. The [ ] Agreement
                  payments will be tendered as follows:
                             [ ] DATES                 AMOUNT [ ]
                             September 3, 2019         $412,500.00
                             January 2, 2020           $176,785.71
                             April 1, 2020             $176,785.71
                             July 1, 2020              $176,785.71
                             October 1, 2020           $176,785.71
                             January 4, 202[1]         $176,785.71
                             April 1, 2021             $176,785.71
                             July 1, 2021              $176,785.74
                             TOTAL                     1,650,000.00

       1
              Philadelphia,   Pa.,   The      Philadelphia     Code     (2020),    available      at
https://codelibrary.amlegal.com/codes/philadelphia/latest/philadelphia_pa/0-0-0-266407 (last visited
December 1, 2023).

                                                 2
                   Payments must be made by certified funds, made payable
                   to the [City] and directed to the attention of Anthony P.
                   Barreca [(Barreca)], Legal Assistant Supervisor, City [ ]
                   Law Department . . . . Any payment not made timely will
                   be subject to interest at the same rate as provided for
                   business taxes by [Philadelphia Code] § 19-509(3)(a).[2]
               ....
               By [subsequent] agreement of the parties, the due date for the
               first payment of $412,500.00 was extended from September
               3, 2019[,] to October 1, 2019. On that date, [ ] Gardiner
               delivered [two] certified checks to [ ] Barreca [totaling]
               $30,000.00.
               The next day, October 2, 2019, those checks were returned to
               [ ] Gardiner, accompanied by a letter (Letter) signed by
               [Frances Beckley, Chief Counsel for the Department of
               Revenue (Beckley)].
               The [L]etter states:
                             Please find enclosed two checks totaling around
                      $30,000[.00] from your client [ ] Gardiner that I am
                      returning to you in order to avoid any
                      misunderstanding. As you are aware, [ ] Gardiner
                      entered into [the Agreement] with the [City] after
                      which the City stayed all enforcement actions against
                      him. Under that [A]greement[,] [ ] Gardiner’s first
                      down payment of [$412,500.00] was due September 3,
                      2019. Although that commitment was clear and a quid
                      pro quo for the stay of enforcement, [ ] Gardiner
                      claimed confusion, and the City agreed to extend the
                      due date for that payment to October 1, 2019.
                             Because your client is in breach of our
                      [A]greement, the City intends to [file] in personem
                      actions promptly against [ ] Gardiner, [Bizness] as
                      Usual [Inc.,] and Biz as Usual [LLC]. The City also
                      will proceed with all available enforcement action[s]—

       2
         Section 19-509(3)(a) of the Phila. Code provides a method to calculate simple interest on all
unpaid taxes except for delinquent real estate taxes. Phila. Code § 19-509(3)(a).

                                                  3
                     including, but not limited to, foreclosure, sequestration,
                     water shut off[,] and denial of permits. No payment
                     agreements will be available; payment in full will be
                     the only way to stop enforcement.
              [(Letter, Reproduced Record (R.R.) at 32a.3)] Immediately
              thereafter, Bizness as Usual [Inc.], Biz as Usual [LLC][,] and
              [ ] Gardiner filed for Chapter 11 Bankruptcy on October 15,
              2019. [ ] Gardiner testified that he then made payments
              through the [C]ity’s electronic automatic payment system
              over the telephone, and at trial he claimed to have paid the
              City $540,000.00 toward his back taxes.[4] He also stated that
              he listed two properties for sale from which he thought he
              could raise another $500,000[.00,] that he would then pay
              toward his delinquent taxes at some point in the future.
(Trial Ct. Op. at 2-5) (citations and footnotes omitted).
              [Landowners] initiated this action by filing a complaint on
              October 9, 2019, seeking [(]1) injunctive relief that would
              enjoin the [C]ity from selling any real property owned by
              [Landowners] at a tax sale or sheriff’s sale[ ] pending the
              outcome of the action; and [(]2) [ ] a declaratory judgment
              that[,] based on the plain meaning of the [A]greement . . ., the
              only penalty for the failure to timely make a payment would

       3
         Although Landowners’ Reproduced Record is paginated using the format “R.__”, we omit
the “R.” and refer only to the numeric designations followed by a small “a.” See Pa.R.A.P. 2173.

       [4]
            With regard to the amount paid by Landowners via the City’s automated payment system,
the trial court noted:
              [Landowners] produced a schedule of payments at trial . . . . However,
              because [Landowners] did not produce this document to the City until
              the day before trial, counsel for the City was unable to confirm that the
              sum of $540,000.00 was received or how it was distributed to cover
              [Landowners’] indebtedness. Counsel for the City was able, at the [trial
              c]ourt’s request, to account for the amount paid during a break in the
              trial. Counsel was able to account for payment of $250,000[.00] toward
              their indebtedness.
(Trial Court Pennsylvania Rule of Appellate Procedure (Pa.R.A.P.) 1925(a) Opinion (Trial Ct. Op.)
at 5 n.3.)

                                                 4
             be the imposition of interest[ ] and that the City is not to be
             permitted to schedule properties owned by [Landowners] for
             tax or [sheriff’s] sale. . . . A non-jury trial was held before [the
             trial] [c]ourt on October 21, 2021. . . . [On December 9, 2021,]
             [the trial] [c]ourt issued its [decision] finding against
             [Landowners] and in favor of the City . . . .
(Trial Ct. Op. at 1-2) (citations omitted) (footnote in original).
             In its December 9, 2021 decision, the trial court found that Landowners’
failure to tender the initial payment due was a material breach that justified the City’s
termination of the Agreement. (December 9, 2021 Trial Ct. Op. ¶ 11.) The trial court
rejected Landowners’ argument that, because the Agreement did not expressly define
“material breach,” they could not be in default for failing to make the initial payment.
Id. ¶ 12. The trial court also rejected Landowners’ arguments that (1) the City was
limited in remedy under the Agreement to recovering interest on untimely payments;
and (2) the Agreement was modified by the City’s receipt and acceptance of
Landowners’ tax payments made through the City’s automated payment system. Id.
¶¶ 13-14. The trial court concluded that Landowners were liable to the City for the full
amount of Landowners’ Total Liabilities and, accordingly, denied Landowners’ claims
for injunctive and declaratory relief. Id. ¶ 15.
             Landowners filed a motion for post-trial relief on December 17, 2021, and
after oral argument on April 1, 2022, the trial court denied the motion by order filed
April 4, 2022. Judgment was entered in favor of the City on April 5, 2022. Landowners
timely appealed to this Court on April 14, 2022, after which both the trial court and
Landowners complied with Pa.R.A.P. 1925.
                             II.    ISSUES PRESENTED
             Landowners raise a single overarching issue on appeal, namely, whether
the trial court erred as a matter of law in concluding that their failure to pay in full the
first installment payment due under the Agreement constituted a material breach

                                             5
justifying the City’s termination of the Agreement.5 In response, the City argues that
Landowners’ issues on appeal (1) lack merit; (2) are waived due to Landowners’ failure
to identify in their motion for post-trial relief the location in the record where the
grounds for the sought relief were preserved;6 and (3) are barred by res judicata and
collateral estoppel.
                                      III.   DISCUSSION7
               A.      Pa.R.Civ.P. 227.1/Res Judicata/Collateral Estoppel
               We preliminarily address the City’s arguments that Landowners’ issues
on appeal are (1) waived and (2) barred by res judicata and/or collateral estoppel. First,
the City argues that all of Landowners’ issues on appeal are waived because they did
not, as required by Pa.R.Civ.P. 227.1(b)(2), include in their motion for post-trial relief8

       5
          Although Landowners identified two additional issues in their Pa.R.A.P. 1925(b) Concise
Statement of Errors Complained of on Appeal (Concise Statement), they have not pursued those
issues in this appeal. (Landowners’ Br. at 11 n.3.)

       6
           Pennsylvania Rule of Civil Procedure (Pa.R.Civ.P.) 227.1(b)(2) requires that a motion for
post-trial relief specify all grounds for such relief and include a statement of how those grounds were
asserted prior to or during trial. Pa.R.Civ.P. 227.1(b)(2). “Grounds not specified are deemed waived
unless leave is granted upon cause shown to specify additional grounds.” Id.

       7
          “Our standard of review of a non-jury trial is to determine whether the findings of the trial
court are supported by [substantial] evidence, and whether an error of law was committed.” Swift v.
Department of Transportation, 937 A.2d 1162, 1167 n.5 (Pa. Cmwlth. 2007). We may not reweigh
the evidence or substitute our own judgment for that of the factfinder. Id. “[F]indings of the trial
[court] in a non-jury case must be given the same weight and effect on appeal as a verdict of a jury
and will not be disturbed absent an error of law or abuse of discretion.” M&D Properties, Inc. v.
Borough of Port Vue, 893 A.2d 858, 861 n.4 (Pa. Cmwlth. 2006) (citation omitted).

       8
        Landowners’ motion for post-trial relief is not included in the Reproduced Record. It is,
however, included in the Original Record (O.R.) received from the trial court at document number
(Doc. No.) 35.

                                                  6
a statement of how they asserted the grounds for relief identified therein prior to or
during trial.9 We will not find waiver in this instance.
              Rule 227.1(b)(2) requires that all asserted grounds for relief be identified
in a motion for post-trial relief, together with a statement of how those grounds were
asserted either before or during trial. Pa.R.Civ.P. 227.1(b)(2). Failure to so identify
any grounds for relief will result in their waiver. Id.; Hinkson v. Pennsylvania
Department of Transportation, 871 A.2d 301, 303 (Pa. Cmwlth. 2005). The official
comment to Rule 227.1 provides, in pertinent part, as follows:
              [Subsection] (b) states two requirements for the granting of
              post-trial relief. First, the grounds for the relief requested
              must have been raised in pre-trial proceedings or at trial and,
              second, they must be stated in the motion. Under [Subsection]
              (b)(1), if no objection is made, error which could have been
              corrected in pre-trial proceedings, i.e., a ground for a new trial
              or a judgment notwithstanding the verdict, or during trial by
              timely objection, may not constitute a ground for post-trial
              relief. It must be raised timely in pre-trial proceedings or
              during the trial, thus affording the court the opportunity to
              correct the error.
              ....
              Under [Subsection] (b)(2), motions which set forth mere
              “boilerplate” language are specifically disapproved. Rather,
              the motion must state “the specific grounds therefor.” A post-
              trial motion must set forth the theories in support thereof “so
              that the lower court will know what it is being asked to
              decide.” Frank v. Peckich, 391 A.2d 624, 632-633 (Pa. Super.
              1978).

Pa.R.Civ.P. 227.1, Comment. The Explanatory Comment—1983 to the rule further
explains:

       9
         The City raised this issue before the trial court in its brief in opposition to Landowners’
motion for post-trial relief. See City Brief in Opposition to Post-Trial Motions, O.R. Doc. No. 39.

                                                 7
             [Rule 227.1(b)(2)’s] requirement that the motion state how
             the grounds were raised at trial indicates compliance with the
             requirements of [Dilliplaine v. Lehigh Valley Trust Co., 322
             A.2d 114 (Pa. 1974),] and [Subsection] (b)(1) that there be a
             timely objection in pre-trial proceedings or at the trial.

Id., Explanatory Comment—1983. Subsection (b)(2)’s requirement that a party state
how the asserted grounds for relief were raised either prior to or during trial serves to
further the purpose of Rule 227.1, which is “to provide the trial court with an
opportunity to correct errors in its ruling and avert the need for appellate review.” M.C.
and E.K. Lees, Inc. v. Capenos, 119 A.3d 1092, 1098 (Pa. Cmwlth. 2015) (quoting
Chalkey v. Roush, 805 A.2d 491, 494 (Pa. 2002)). “[P]ost-trial motions are filed when
the [trial] court still has jurisdiction to correct the asserted errors ‘at that early stage
without necessitating the expenditure of time and judicial energy in taking a costly
appeal to the appellate courts.’” Diener Brick Co. v. Mastro Masonry Contractor, 885
A.2d 1034, 1039 (Pa. Super. 2005) (quoting Diamond Reo Truck Co. v. Mid-Pacific
Industries, 806 A.2d 423, 428 (Pa. Super. 2002)).
             In their motion for post-trial relief, Landowners raised five issues, each of
which challenged a particular finding of fact or conclusion of law made by the trial
court in its December 9, 2021 opinion. See Landowners’ Post-Trial Motion, O.R. Doc.
No. 35. Landowners did not expressly challenge any of the trial court’s pre-trial or
trial rulings. Their grounds for post-trial relief therefore could not have been asserted
prior to the trial court’s final decision. Any omission of how those grounds were raised
prior to or during trial from Landowners’ motion therefore did not, in this instance,
deprive the trial court of the ability to address Landowners’ issues prior to appeal. For

                                             8
these reasons, we conclude that Landowners have not, by any failure to comply with
Pa.R.Civ.P. 227.1(b)(2), waived any issues for appellate review.10
               The City argues secondly that Landowners’ claims are barred by res
judicata and/or collateral estoppel because Bizness as Usual Inc. and Biz as Usual LLC
previously were involved in two tax collection actions in the trial court presided over
by a different judge. Bizness as Usual Inc. and Biz as Usual LLC apparently filed
motions to stay execution in those cases, in which they argued that the collection
actions were barred by the terms of the Agreement. The City argues that the trial court
rejected that argument and denied the motions, which decision was not appealed. The
City thus contends that the issues involved in this appeal, save one, previously were
presented to and decided by the trial court, and accordingly cannot be relitigated here.
We disagree.
               Although the City alleges that it asserted the affirmative defenses of res
judicata and collateral estoppel in the trial court, it does not identify where in the record
those defenses appear. The City filed its answer to Landowners’ complaint on March
1, 2021, which answer was not accompanied by new matter asserting any affirmative
defenses. (O.R. Doc. No. 15.) The City thereafter, by leave of court, amended its
answer to include, as new matter, the defenses of “breach of contract” and “res
judicata.” (O.R. Doc. Nos. 27, 29.)           However, the trial court ultimately issued its
decision on the merits of Landowners’ claims and made no findings or conclusions on
the merits of the City’s affirmative defenses.               Additionally, although the City
references at length the two related tax collection actions in the trial court, the issues
and parties involved therein and their dispositions do not appear in the record before

       10
          The trial court concluded that Landowners sufficiently identified the grounds for relief in
their motion for post-trial relief. (Trial Ct. Op. at 6 n.4.)

                                                 9
us. We accordingly have nothing from the trial court to review in this respect, and we
will not rule on the City’s affirmative defenses in the first instance.
                               B.     Breach/Materiality
             Landowners do not dispute that they paid less than 10% of the initial
installment payment due on October 1, 2019 (after a one-month extension granted by
the City). Rather, they argue that their failure to pay the entire amount due did not
constitute a material breach of the Agreement that justified the City’s termination of
the Agreement.     Landowners contend that their breach of the Agreement was not
material because (1) the Agreement does not expressly make “time of the essence”
regarding payments, and (2) the failure to make the first installment payment in full
was not willful. (Landowners’ Br. at 16-29.) Landowners further suggest that their
subsequent payments made through the City’s automated tax payment system rendered
the City’s termination of the Agreement “ambiguous” and unenforceable. The City
argues in response that Landowners’ interpretation of the Agreement would render it
void for lack of consideration, that Landowners’ failure to pay was a material breach
because timely payment without the need for further litigation was the entire benefit of
the City’s bargain, and the Agreement was not subsequently ratified by the City via
Landowners’ automated tax payments.
             It is axiomatic in Pennsylvania that questions involving the interpretation
of a contract are questions of law for the Court, and not questions of fact. Wert v.
Manorcare of Carlisle PA, LLC, 124 A.3d 1248, 1259 (Pa. 2015). A determination as
to whether a contract’s terms are ambiguous also is a question of law for the court.
Starling v. Lake Meade Property Owners Association, Inc., 162 A.3d 327, 346 (Pa.
2017).    “A contract is ambiguous if it is reasonably susceptible of different
constructions and capable of being understood in more than one sense.” Insurance

                                            10
Adjustment Bureau v. Allstate, 905 A.2d 462, 468-69 (Pa. 2006). The “reasonably”
qualifier is important: there is no ambiguity if one of the two proffered meanings is
unreasonable. Trizechahn Gateway LLC v. Titus, 976 A.2d 474, 483 (Pa. 2009).
            “It is [also] well established that the intent of the parties to a written
contract is to be regarded as being embodied in the writing itself, and when the words
are clear and unambiguous the intent is to be discovered only from the express language
of the agreement.” Wert, 124 A.3d at 1259.
            [W]hen a written contract is clear and unequivocal, its
            meaning must be determined by its contents alone. It speaks
            for itself and a meaning cannot be given to it other than that
            expressed. Where the intention of the parties is clear, there is
            no need to resort to extrinsic aids or evidence. Hence, where
            language is clear and unambiguous, the focus of interpretation
            is upon the terms of the agreement as manifestly expressed,
            rather than as, perhaps, silently intended.
Id.
            The Pennsylvania Superior Court has discussed at length the law
governing whether a breach of contract is material:
            When performance of a duty under a contract is due, any
            nonperformance is a breach. If a breach constitutes a material
            failure of performance, then the non-breaching party is
            discharged from all liability under the contract. If, however,
            the breach is an immaterial failure of performance, and the
            contract was substantially performed, the contract remains
            effective. In other words, the non-breaching party does not
            have a right to suspend performance if the breach is not
            material.
            Whether a breach is so substantial as to justify an injured
            party’s regarding the whole transaction as at an end is a
            question of degree; and it must be answered by weighing the
            consequences in the actual custom of men in the performance
            of contracts similar to the one that is involved in the specific

                                          11
               case. In determining materiality for purposes of breaching a
               contract, we consider the following factors:
                   a) the extent to which the injured party will be deprived of
                   the benefit which he reasonably expected;
                   b) the extent to which the injured party can be adequately
                   compensated for that part of the benefit of which he will
                   be deprived;
                   c) the extent to which the party failing to perform or to
                   offer to perform will suffer forfeiture;
                   d) the likelihood that the party failing to perform or offer
                   to perform will cure his failure, taking account of all the
                   circumstances including any reasonable assurances;
                   e) the extent to which the behavior of the party failing to
                   perform or offer to perform comports with standards of
                   good faith and fair dealing.

Widmer Engineering Inc. v. Dufalla, 837 A.2d 459, 467-68 (Pa. Super. 2003) (internal
citations and quotations omitted).11 See also McCausland v. Wagner, 78 A.3d 1093,
1101 (Pa. Super. 2013).
               The trial court aptly analyzed the materiality of Landowners’ breach. We
quote its analysis at length:
               First, when [Landowners] agreed to pay $412,500.00 by
               October 1, 2019, and instead paid $30,000[.00], the City was
               significantly deprived of the benefit for which [it] had
               bargained. The entire benefit to the City conferred by this
               Agreement was that it would collect the delinquencies within
               eight [ ] months without the need for further litigation.
               Payment of the money itself was not consideration for the
               City—[Landowners] already owed these monies to the City
               by operation of law. Second, the City cannot be adequately
               compensated for its loss. Once [Landowners] failed to make
               the agreed[-]upon payments, the City lost the benefit of [its]
               bargain and was left to resort to litigation to collect the
       11
         Although not binding, reported decisions of our sister appellate court may be cited for their
persuasive value. See In re Superior-Pacific Fund, Inc., 693 A.2d 248, 253 (Pa. Cmwlth. 1997).

                                                 12
amount owed. With regard to the third factor, [Landowners]
will lose the discounted rate that the City previously agreed
to[;] however, they are put back to their original status of
indebtedness.
With regard to the fourth factor, “the likelihood that a party
failing to perform will cure his failure,” even considering the
payments made by [Landowners] up until the time of trial in
October 2021, [Landowners] fall drastically short of the
$1,650,000[.00] that should have been paid in full by July
2021. [Landowners] have offered no concrete assurance of
when or how they will complete the payments. [Landowners]
have already disregarded all terms of the [Agreement], further
lowering expectation that the terms would be completed in
any timely fashion, if at all.
....
When [a] “debtor gives nothing he was not already bound to
give, and the creditor receives nothing [it] is not already
entitled to receive, there is [therefore] no consideration.[”]
PNC Bank, [National Association] v. Balsamo, 634 A.2d 645,
655 (Pa. Super. 1993) [(citation omitted)]. . . . [Landowners’]
consideration was the City’s willingness to forgive nearly
$650,000[.00] of what was already owed; the City’s
consideration was [the]pay[ ]off of this discounted amount in
accordance with the schedule of payments [ ] to be completed
by July[ ] 2021[,] without further litigation.
Finally, [Landowners] argue that the [ ] Agreement itself
provides that [Landowners’] failure to pay $412,500.00 on
October 1, 2019[,] did not constitute a material breach.
Specifically, they argue [that] [a]ny payment not made timely
will be subject to interest at the same rate as provided for
business taxes by [Philadelphia Code §] 19-509(3)(a).
According to [Landowners], this language absolves them
from the promise to pay on time, and that if they failed to do
so, the only remedy available to the City would be to collect
interest on untimely payments. Under this interpretation,
[Landowners] were free to breach the Agreement at any time
without consequence, other than collection of interest on

                             13
some future, unpaid monies.        This interpretation defies
reason.
In weighing the above factors, it is clear that [Landowners’]
breach was of a degree sufficient to allow the [Agreement] to
be suspended. After negotiating and agreeing to the terms of
the Agreement, and after obtaining an additional [(30)] days
to make the first payment, [Landowners] still paid a small
percentage of what was agreed upon [sic]. There were only
two [] requirements for [Landowners]: [(]1) pay the
installment amounts agreed upon [(]2) by certified check to [
] Barreca. Failure to pay more than a fraction of [the] amount
owed was a material breach justifying suspension of
[performance] by the City. Once [Landowners] breached the
Agreement, they were no longer entitled to the benefit of the
deal struck with the City, and they are placed back into the
position they were in prior to the Agreement. Even assuming,
arguendo, that payments totaling $540,000[.00] were made at
the time of the trial in October 2021 (which [Landowners]
failed to prove), that sum is less than one third of the total
amount of $1,650,000[.00] that should have been paid by July
1, 2021.
....
[Landowners] argue that the failure of the City to include a
clause that defines what constitutes a default and the resulting
remedies precludes the City from [terminating the
Agreement]. . . . [Landowners argue] that the Agreement not
only contemplates, but actually permits late payments. . . . and
subjects them to interest[,] but does not provide that the
failure to make a full payment in accordance with the payment
schedule constitutes a material breach or default. . . . The
remedy for non-payment, according to this argument, is
limited to payment of interest on some type of future
payments. In other words, unless the City spelled out that
failure to pay on time would constitute a default and/or time
was of the essence, [Landowners] were free to disregard the
payment schedule entirely and . . . effectively eliminate the
essence of the City’s part of the bargain. This is not a
reasonable interpretation of the terms of this Agreement.

                              14
(Trial Ct. Op. at 7-12) (some internal citations and quotations omitted) (emphasis in
original).
             The trial court’s analysis is on point and correct. The City forwent
collection from Landowners of over $600,000.00 in liabilities to which it already was
entitled by operation of law.     In exchange, Landowners agreed, without further
litigation, to make eight pre-scheduled payments in defined amounts, the first and
largest of which constituted one-quarter of Landowners’ entire negotiated liability.
The form and location of the payments is specified in the Agreement, which requires
that they be made in “certified funds” directly to the City’s Law Department. Although
the Agreement does not contain a provision making time of the essence, no such
provision is required where the intent of the parties otherwise is clear that the timing
of payments is material. Bogojavlensky v. Logan, 124 A.2d 412, 415 (Pa. Super. 1956).
Here, the language of the Agreement and the circumstances it recites clearly indicate
that the timing of the payments, each of which was given a specific date and amount,
was material to the parties’ bargain and constituted the entire consideration for the
City’s execution of the Agreement.
             Moreover, and importantly, Landowners here did not merely make a late
payment.     After receiving an almost 30-day extension from the City, they paid
approximately eight percent of the total amount due on October 1, 2019. Although
technically timely, the payment was woefully inadequate, leaving from the get-go a
past due amount of approximately $382,500.00. Landowners’ breach thus went far
beyond a timeliness issue and, as emphasized in the City’s October 2, 2019 Letter,
struck at the heart of the parties’ bargain. The mere fact that the Agreement includes a
term providing for the assessment of interest on late payments does not preclude a
finding of material breach where Landowners fail to pay more than a trivial portion of

                                          15
what is owed on any one payment. It is reasonable to interpret the Agreement’s clear
terms as providing that, where Landowners substantially comply with the payment
terms in both timing and amount, any immaterial breach in either sense would not
authorize the City’s termination of the Agreement; the City nevertheless could assess
interest on any smaller past due amounts caused by such a breach. However, where,
as here, Landowners failed to substantially perform and paid only a trivial amount on
the first payment due, their breach is material and justifies regarding the whole
transaction as at an end. In that instance, the City need not resort to mere collection of
interest; it may terminate and seek full payment of Landowners’ Total Liabilities. The
trial court found Landowners’ breach to be material, and we discern no error or abuse
of discretion in that finding.
              Finally, we, like the trial court, reject Landowners’ arguments that their
subsequent payments through the City’s automated tax payment system, which they
contend were accepted by the City, both ratified the Agreement and proved that their
failure to make the initial payment in full was not “willful.”12 (Landowners’ Br. at 25-
28.) First, in its October 2, 2019 Letter, the City unequivocally indicated its intent to
terminate the Agreement based on Landowners’ failure to make the initial payment due
on October 1, 2019. Second, Landowners made all subsequent payments via the City’s
automated tax payment system. In light of the City’s October 2, 2019 Letter, the City
would have allocated the payments to Landowners’ Total Liabilities and not their
obligations under the Agreement, particularly since the payments were not made in
certified funds to the City’s Law Department as the Agreement required. Thus,

       12
          We need not determine whether Landowners’ breach was willful because we conclude that
the clear terms and circumstances of the Agreement evidence the parties’ intent that time (and
substantial payment) were of the Agreement’s essence. Bogojavlensky, 124 A.2d at 415; Morrell v.
Broadbent, 140 A. 500 (Pa. 1928).

                                              16
although Landowners will receive credit for whatever payments they made toward their
Total Liabilities, such payments neither nullify nor render ambiguous the City’s
unequivocal termination of the Agreement on October 2, 2019.
                               IV.    CONCLUSION
            The trial court did not err or abuse its discretion in concluding that
Landowners materially breached the Agreement, entitling the City to suspend its own
performance and terminate the Agreement. The trial court therefore did not err or abuse
its discretion in entering judgment in favor of the City on all claims asserted in
Landowners’ complaint. The judgment of the trial court is affirmed.

                                           ________________________________
                                           PATRICIA A. McCULLOUGH, Judge

                                          17
             IN THE COMMONWEALTH COURT OF PENNSYLVANIA

Antoine Gardiner, Bizness            :
as Usual Inc., Biz as Usual LLC,     :
and King Kole Cafe Inc.,             :    No. 382 C.D. 2022
                    Appellants       :
             v.                      :
                                     :
City of Philadelphia                 :

                                   ORDER

            AND NOW, this 4th day of December, 2023, the April 5, 2022
judgment of the Court of Common Pleas of Philadelphia County hereby is
AFFIRMED.

                                         ________________________________
                                         PATRICIA A. McCULLOUGH, Judge