Court Opinion

ID: 4679415
Source: CourtListenerOpinion
Date Created: 2021-04-21 16:13:35.903959+00
Date Added: 2024-06-11T08:03:50.251789
License: Public Domain

J-A14014-20

NON-PRECEDENTIAL DECISION - SEE SUPERIOR COURT I.O.P. 65.37

 L.A.V. MP HOLDING, LLC,               :   IN THE SUPERIOR COURT OF
 INDIVIDUALLY A MEMBER OF, AND         :        PENNSYLVANIA
 ON BEHALF OF, MORROW PARK CITY        :
 APARTMENTS, LLC                       :
                                       :
                                       :
                                       :
                                       :
              v.                       :   No. 582 WDA 2019
                                       :
                                       :
                                       :
                                       :
 V.G. MORROW PARK CAPITAL, LLC         :
                                       :
                                       :
                                       :
                                       :
              v.                       :
                                       :
                                       :
                                       :
                                       :
 MORROW PARK HOLDINGS, LLC,            :
 VILLAGE GREEN RESIDENTIAL
 PROPERTIES, LLC, CCI HISTORIC,
 INC., VG ECU HOLDINGS, LLC, AND
 COMPATRIOT CAPITAL, INC.

 APPEAL OF: VILLAGE GREEN
 RESIDENTIAL PROPERTIES, LLC

              Appeal from the Order Entered April 12, 2019
    In the Court of Common Pleas of Allegheny County Civil Division at
                       No(s): No. GD-17-006216
J-A14014-20

BEFORE: SHOGAN, J., McLAUGHLIN, J., and MUSMANNO, J.

MEMORANDUM BY SHOGAN, J.:                        FILED: APRIL 21, 2021

       Appellant, Village Green Residential Properties, LLC (“VGRP”), appeals

from an order entered on April 12, 2019,1 in the Allegheny County Court of

Common Pleas. In the April 12, 2019 order, the trial court concluded that

VGRP was in breach of an agreement to purchase an apartment building

located in Pittsburgh, Pennsylvania. Order, 4/12/19. As a result of VGRP’s

breach, the trial court concluded that pursuant to the terms of the agreement,

VGRP’s sales agreement terminated, and VGRP forfeited its down payment.

Id. Because the trial court concluded that the VGRP sales agreement was

terminated, the trial court approved the court-appointed Special Master’s

recommendation to sell the property to Appellees, Morrow Park Holdings, LLC,

CCI Historic, Inc., VG ECU Holdings, LLC, and Compatriot Capital, Inc.

(collectively “Appellees”).2 Id. After careful consideration, we affirm.

____________________________________________

1  The order on appeal was dated “April 11, 2019.” Throughout the record
and in the briefs, the order is, on occasion, noted as either the April 11, 2019
order or the April 12, 2019 order. We point out that the order was not filed
and entered on the docket until April 12, 2019. Accordingly, when referencing
the order on appeal, we refer to it as the April 12, 2019 order.

2  This is an appeal as of right from an interlocutory order. See Pa.R.A.P.
311(a)(2) (permitting an appeal as of right from an order confirming,
modifying, dissolving, or refusing to confirm, modify or dissolve an
attachment, custodianship, receivership, or similar matter affecting the
possession or control of property).

                                           -2-
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      The trial court summarized the relevant facts and procedural history of

this matter as follows:

            This matter is an over[-]litigated business dispute between
      and among the Defendants, two sophisticated real estate
      development groups. These two out-of-state groups formed
      Morrow Park City Apartments, LLC, (“MPCA”) along with Plaintiff,
      L.A.V., Associates, LP (“LAV”, [which] owned the land upon which
      the apartments were built), to develop and hold a successful
      luxury apartment building.       The building, Morrow Park City
      Apartments, is on the corner of Bigelow Boulevard and Liberty
      Avenue in the Shadyside/Bloomfield neighborhood of Pittsburgh.
      L.A.V. contributed the land upon which the apartments were built
      in consideration for a minority interest in MPCA.

            The majority interest in MPCA is held by Defendant, V.G.
      Morrow Park Capital, LLC (“VG Capital”), an entity controlled by
      Morrow Park Holding, LLC (“Morrow Holding”). Village Green
      Residential Properties, LLC (“VGRP”) and CCI Historic, Inc[.],
      (“CCI”) in turn, share control of Morrow Holding and, through
      these entities control MPCA. These entities were formed for the
      specific purpose of developing and holding the Morrow Park
      apartment complex.

             In 2017, due to a deadlock between majority interest
      holders in Morrow Holding, CCI and VGRP, MPCA was facing a
      default on a 36.5 million dollar bank note. The note was the result
      of the financing secured to construct the apartment building. The
      Defendants could not agree on permanent refinancing to replace
      the construction loan note and were holding each other hostage
      in the process of refinancing. More importantly, however, the
      majority interest holders were also holding LAV, the direct
      minority interest holder, hostage as well. LAV had no interest in
      the arm wrestling between the CCI entities and the Village Green
      Entities (this contest over majority member interests in the MPCA
      entities was and is pending in Delaware Chancery Court), but
      certainly did not want to lose its investment to a foreclosure action
      because of the majority deadlock. In the late Spring of 2017, this
      management deadlock was preventing refinancing and default
      under the terms of the note was imminent.

            LAV petitioned this [c]ourt for the appointment of receiver
      due to the deadlock in the majority ownership of MPCA, and this

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     [c]ourt obliged. The receiver was designated by the [c]ourt as
     “Special Master”1 and charged with immediately securing
     financing to avoid default and subsequently charged to sell the
     property to permanently resolve the deadlock, while at the same
     time, maximizing the value of the asset and cashing LAV … out of
     it[]s investment.

           1 This [c]ourt appointed James D. Chiafullo, Esq. to be
           the Special Master. Mr. Chiafullo is a Director at Cohen
           & Grigsby and has practiced in the area of commercial
           transactions for 37 years.

          This [c]ourt’s [o]rder appointing the Special Master entered
     on May 2, 2017 was appealed by the CCI parties to Superior Court.
     CCI subsequently discontinued it[s] appeal on March 20, 2018.

           After securing financing for the building and averting the
     urgent financial issue, the Special Master was directed by the
     [c]ourt on February 14, 2018 to proceed with the sale of the
     building because the deadlock between the majority interest
     holders was ongoing and had not abated nor had it been
     adjudicated in Delaware.

           After noteworthy procedural wrangling and significant effort
     by the Special Master, the Morrow Park City Apartments were sold
     to the CCI parties. VGRP, the losing bidder in the sale process,
     now appeals this [c]ourt’s Order approving the Special Master’s
     recommendation to sell the apartment building to CCI.

                            THE SALE PROCESS

           On February 14, 2018, in an effort to resolve the deadlock
     in the majority ownership of the MPCA entities and therefore
     MPCA’s inability to function absent the continuing imposition of a
     Special Master and the supervision of this [c]ourt, the Special
     Master was directed by [c]ourt [o]rder to market the asset for sale
     to a bidder making the highest and best offer to purchase the
     building.

           After vetting seven prominent Commercial Real Estate
     Brokers, the [S]pecial Master engaged CBRE Capital Markets, Inc.
     (“CBRE”)2 as the broker of record for the asset sale. CBRE
     evaluated the property and advised the Special Master to list the
     building for sale at $61,000,000.

                                    -4-
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          2 CBRE is the largest commercial real estate service
          company in the world.

           On July 13, 2018[,] VGRP through it[]s affiliate, City Club
     Apartments, LLC, sent a Letter of Intent offering to purchase the
     building for $58,500,000.00. In response, CCI sent a Letter of
     Intent to buy the building at $58,750,000. CBRE [sought]
     additional offers and received six additional offers. The Special
     Master contacted these bidders requesting their best and final
     offers. VGRP then submitted an offer purporting to match the CCI
     offer at $58,750,000. Finally[,] CCI attempted a topping offer of
     $58,850,000.

            On September 28, 2018 the Special Master filed a
     recommendation to approve sale of the building to VG[PR] for nine
     different reasons,3 but primarily because even though VG[RP]
     offer was $100,000.00 less than CCI’s final offer, the VGRP offer
     was superior because of its favorable terms. VGRP’s terms
     included that it was an all cash offer (CCI’s offer was partially
     achieved through a promissory note), and did not include CCI
     provisions regarding resolution of the ongoing litigation over
     which neither the Special Master nor the seller had control.
     Additionally, VGRP’s earnest money deposit of $1.5 million was
     non-refundable which was more favorable than CCI’s earnest
     money deposit of $1.2 million which was refundable. CBRE
     concurred in the Special Master’s conclusion that the VGRP’s offer
     was the best offer.

          3The Special Master’s reasons for its recommendation
          are as follows:

              (i) City Club’s offer is superior to all but one of
              the other offers in price[;]

              (ii) Although City Club’s offer is $100,000 less
              than Compatriot’s offer, City Club’s offer
              contained more favorable terms[;]

              (iii) City Club offer is all-cash, whereas
              Compatriot’s offer involved a partial promissory
              note;

                                     -5-
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              (iv) Compatriot’s offer also attempts to direct to
              which entities the net sale proceeds of the sale
              of the Asset would go;

              (v) Specifically, Compatriot’s offer provides that
              the net sales proceeds distributed to LAV
              Associates, L.P.[,] would be funded by the seller
              in cash, whereas the net sales proceeds to be
              paid to VG Morrow Park Capital LLC would be
              funded by a promissory note from Compatriot,
              payable upon a judicial determination of the
              proper distribution of the proceeds between its
              members, unless the members of VG Morrow
              park Capital agree upon the proper distribution
              amongst themselves;

              (vi) Compatriot’s offer also requires the
              dismissal with prejudice of this case when the
              net sale proceeds are distributed, a mutual
              release between Morrow Park City Apartments
              LLC, Compatriot, and LAV Associates, L.P., and
              the termination of all duties of the Special
              Master in connection with the Asset;

              (vii) The proper distribution of the net sales
              proceeds is the very subject of the litigation
              between the parties, and the Special Master
              lacks the authority to sell the Asset subject to
              these contingencies[;]

              (viii) Moreover, the use of a promissory note
              between parties, rather than cash, creates
              collection risk and may require further judicial
              intervention to enforce; and

              (ix) City Club’s earnest money deposit of $1.5
              million (to be paid in two separate installments)
              is nonrefundable, whereas Compatriot’s earnest
              money deposit of $1.2 million is refundable in
              the event that all of the aforementioned
              conditions to closing do not occur.

          Special Master’s Recommendation to Approve Sale of
          Property, dated September 28th, 2018.

                                    -6-
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            CCI filed objections to the Special Master’s recommendation
     on October 12th, 2018 and the [c]ourt held a hearing on
     October 15, 2018. Following the hearing, the [c]ourt issued an
     [o]rder approving the Special Master’s recommendations and the
     sale to VGRP for $58,750,000 on the terms specified.           On
     October 18th, 2018, VGRP and MPCA entered into an Agreement
     of Sale which required, among other provisions, that VGRP honor
     its offer making a non-refundable down payment of $1.5 million;
     $750,000.00 of which was due on October 21, 2018 with the
     remaining $750,000.00 due on November 8, 2018.                The
     Agreement also provided that VGRP “understood and
     acknowledged” that there was no right of inspection or a due
     diligence period. The closing was set for November 19th, 2018,
     with provision for a 30 day extension upon VGRP increasing its
     non-refundable down payment by $500,000.00 to $2 million.

            Despite its active participation in the sale process, CCI
     appealed this [c]ourt’s [o]rder of October 15, 2018 approving the
     sale of the Morrow Park City Apartment building to VGRP on
     November 6, 2018, challenging the Special Master’s authority to
     sell the building and also filed an Emergency Motion to Stay the
     Sale pending the appeal.

           On November 6, 2018, VGRP filed papers entitled
     “Emergency Motion to Compel Access to Necessary Information
     for Closing Relating to Morrow Park City Apartments, and for an
     Order of Contempt against CCI Historic, Inc., VG ECU Holdings,
     LLC and Compatriot Capital, Inc[.]” essentially complaining that it
     had been denied access to the building to do “necessary
     inspections”, despite the fact that it had specifically agreed that it
     had no right to inspect.

           Following a hearing on both CCI’s Motion to Stay and VGRP’s
     Motion to Compel, this [c]ourt denied both motions effectively
     clearing a path for the sale to close in favor of VGRP.

           Curiously, VGRP on November 16, 2018 filed an Emergency
     Motion to Stay the sale pending the CCI parties’ pending appeal
     challenging the authority of the Special Master in which they
     argued that CCI’s pending appeal in some manner invalidated the
     VGRP/MPCA Sales Agreement. Compatriot immediately withdrew
     its appeal on November 17, 2018, and then VGRP withdrew its
     Emergency Motion to Stay on November 26, 2018.

                                     -7-
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           In the interim however, VGRP did not close on the sale of
     the apartment building on the set closing date of November 19,
     2018, nor did it extend the closing date under the terms of the
     Sale Agreement by making the additional down payment of
     $500,000.00.

           On December 3, 2018, the Special Master notified VGRP that
     it was in default of the Sales Agreement and because of its default,
     the Seller terminated the Sales Agreement. The Special Master[]
     also notified VGRP that it’s earnest money of $1.5 million was
     being disbursed to the Seller.

           Subsequent to default and termination of its Sales
     Agreement on December 11, 2018, VGRP proposed an
     amendment to the now terminated Sales Agreement permitting it
     to do inspections that it claimed were necessary to obtain
     financing and providing 45 additional days to close the transaction
     without the payment of the additional $500,000.00.

           In response to the proposed amendmen[t,] the Special
     Master requested assurances from VGRP that it either had the
     equity or had obtained financing sufficient to close the sale. The
     Special Master received neither from VGRP and as a result, the
     Special Master went back to seeking other purchasers for the
     Morrow Park City Apartments.

           On December 20, 2018, VGRP filed papers called a “Motion
     to Amend and then Enforce Sales Agreement[“] which essentially
     sought to have this [c]ourt reform the now terminated Sales
     Agreement to include the amendment that it had proposed to and
     that had been rejected by the Special Master. Very shortly
     thereafter[,] CCI made a new offer to purchase MPCA on
     December 28, 2018 for $57,500,000.         The Special Master
     recommended that CCI’s new and improved offer be approved by
     the [c]ourt on January 8, 2019, for among other reasons,4
     because CCI’s new offer was now an all cash offer without any
     contingencies and CCI proposed to close within 21 days. CCI also
     now agreed to assume the construction loan still outstanding on
     the building and promised LAV … cash at the closing for [its]
     minority interests.

           4 The Special Master’s recommendation for approval
           of sale to CCI was based upon the following reasons;

                                    -8-
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              (i) VGRP is in default of the VGRP Agreement
              and, in any event, has provided no evidence of
              the necessary equity or financing sufficient to
              purchase the Asset;

              (ii) the CCI is an all-cash offer that does not
              require inspection or due diligence, nor does it
              contain any contingencies;

              (iii) CCI Historic has provided evidence to the
              Special Master sufficient to prove that CCI
              Historic has the wherewithal to close on the CCI
              Offer;

              (iv) although the CCI Offer is less than VGRP’s
              offer, CCI has agreed to close the transaction
              within 21 days, whereas; VGRP seeks 45
              additional days, and the Special Master believes
              that avoiding further delay in the Asset’s sale
              would benefit Morrow Park City Apartments,
              LLC;

              (v) CCI Historic has agreed to assume the
              $34,321,983 construction loan encumbering the
              Asset and to provide the lender with a substitute
              guarantor to replace Jonathan Holtzman,
              whereas VGRP did not
              so agree and would have to immediately obtain
              a new loan;

              (vi) Plaintiff LAV Associates, L.P. will receive
              cash for their Morrow Park City Apartments, LLC
              at closing.

           Special Master’s Amended Recommendation to
           Approve Sale of Property, dated March 4th, 2019.

           Following a hearing on the Special Master’s Amended
     Recommendations and VGRP’s “Motion to Amend” on January 31,
     2019, the [c]ourt took the Motion to Amend and the Special
     Master’s Recommendation under advisement and granted the
     parties a short period of time to attempt to negotiate a settlement
     of the matter. A settlement was not accomplished and ultimately,
     this [c]ourt denied VGRP’s Motion to Amend and approved the

                                    -9-
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      even more favorable sale to CCI which newly provided that CCI
      would pay off MPCA’s debt at closing rather than assuming it. The
      [c]ourt approved the sale to CCI as recommended on April 1[2],
      2019 …..

Trial Court Opinion, 1/27/20, at 1-7.

      The trial court’s April 12, 2019 order on appeal provided, in relevant

part, as follows:

      1. The October 18, 2018 sales agreement that the [c]ourt
      authorized the Special Master to accept for Morrow Park City
      Apartments, LLC (“MPCA”), on October 15, 2018, terminated on
      its own terms by VGRP’s default of its obligations to close or pay
      an additional $500,000 by November 19, 2018. Accordingly, the
      Special Master’s March 5, 2019 Motion to Confirm Default is
      granted, and VGRP’s December 20, 2018 Motion to Amend and
      Enforce Sales Agreement is denied.

      2. Pursuant to Paragraph 20 of the October 18, 2018 sales
      agreement, MPCA is entitled to retain VGRP’s $1.5 million deposit
      plus earned interest thereon (the “Down Payment”), which
      represents appropriate and reasonable liquidated damages arising
      from VGRP’s default and does not constitute an unlawful penalty.
      See Palmieri v. Partridge, 853 A.2d 1076, 1080-81 (Pa. Super. Ct.
      2004); Laughlin v. Baltalden, Inc., 159 A.2d 26, 29 (Pa. Super.
      Ct. 1960); Kraft v. Michael, 70 A.2d 424, 425-26 (Pa. Super. Ct.
      1950); and the cases cited therein. Accordingly, the Title
      Company is ordered to immediately release and pay the Down
      Payment to MPCA and shall not be liable to any party for its
      compliance with this Order.

      3. The Special Master’s March 5, 2019 recommendation for this
      [c]ourt to approve the sale of Morrow Park City Apartments
      (“Apartments”) to CCI Historic, Inc. under the terms of the sales
      agreement (the “Offer”) attached hereto as Exhibit A is accepted.
      The [c]ourt hereby authorizes the Special Master to accept the
      Offer for MPCA and proceed to close the sale in accordance with
      its terms.

      4. The Compatriot Parties’ April 2, 2019 Motion to Approve
      Proposed Distribution Schedule to Expedite Closing is granted.
      The proposed distribution schedule attached hereto as Exhibit B is

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      accepted. The Special Master is authorized to distribute the net
      sales proceeds at closing to LAV and VG Morrow Park Capital, LLC,
      in accordance with such schedule, subject to any adjustments that
      may be required under the executed sales agreement or otherwise
      to properly reflect the accounts as they appear on the actual
      closing date. Absent written consent of both VGRP and the
      Compatriot Parties, the Special Master shall pay the net sales
      proceeds owing to VG Morrow Park Capital, LLC, including all
      amounts currently held by MPCA, to the Delaware Chancery Court
      for resolution of the disputes and claims between VG Morrow Park
      Capital, LLC’s members.

      5. Payment for Special Master Chiafullo as well as his reasonable
      costs associated with this Order shall be made by MPCA from the
      proceeds of the sale of the Apartments in accordance with the
      process set forth in the prior Orders entered on February 14,
      2018, May 2 and 3, 2017 and July 10, 2017.

      6. VGRP’s February 25, 2019 Motions for Leave to File Complaint
      under Seal and to Assign Case to the Commerce Case are granted,
      and the Compatriot Parties’ March 9, 2019 Motion to Enforce the
      [c]ourt’s February 14, 2018 Order is denied. VGRP may bring its
      action against Morrow Park City Apartments, LLC, CCI Historic,
      Inc., VG ECU Holdings, LLC, and Complaint Capital immediately,
      and the record in that matter shall be sealed by the Prothonotary
      to preclude public access to the docket and material of record,
      including the initial filing of the Complaint. Once filed, VGRP’s new
      action shall be assigned to the Commerce and Complex Litigation
      Center, Judge Ward presiding.

Order, 4/12/19, at ¶¶ 1-6.

      On April 18, 2019, VGRP filed a timely appeal, and on April 23, 2019,

the trial court directed VGRP to file a concise statement of errors complained

of on appeal pursuant to Pa.R.A.P. 1925. VGRP filed its Pa.R.A.P. 1925(b)

statement on May 14, 2019, and raised the following issues:

      1. The trial court erred in its Order of Court dated April 1[2], 2019
      (“April 1[2] Order”), by granting the Special Master’s Motion to
      Confirm VGRP’s Default and by denying VGRP’s Motion to Amend
      and Enforce Sales Agreement where CCI Historic, Inc. (“CCI”), VG

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     ECU Holdings, LLC (“VG Holdings”) and Compatriot Capital, Inc.
     (“Compatriot”) (collectively the “Compatriot Parties”) actively
     interfered with the sale of the Property to VGRP;

     2. The trial court erred in its April 1[2] Order by granting the
     Special Master’s Motion to Confirm VGRP’s Default and by denying
     VGRP’s Motion to Amend and Enforce Sales Agreement where
     MPCA’s material default of the Sales Agreement occurred prior to
     VGRP’s default;

     3. The trial court erred in its April 1[2] Order by granting the
     Special Master’s Motion to Confirm VGRP’s Default and by denying
     VGRP’s Motion to Amend and Enforce Sales Agreement where the
     court did not consider the complaint VGRP had sought leave to file
     for specific performance against MPCA, did not conduct a hearing
     on whether VGRP’s deposit could be forfeited as liquidated
     damages and MPCA did not file an action against VGRP to hold it
     in default under the Sales Agreement;

     4. The trial court erred in its April 1[2] Order by granting the
     Special Master’s Motion to Confirm VGRP’s Default and ordering
     VGRP’s $1.5 million to be released to MPCA where the deposit
     could only be forfeited as “liquidated damages”; and where MPCA
     had not adhered the procedural predicates to secure damages,
     established liability on the part of VGRP, or established that the
     deposit constituted reasonable liquidated damages in the event
     that it did establish liability;

     5. The trial court erred in its April 1[2] Order by approving the
     Second Amended Recommendation of Sale of the Property to CCI
     and in approving the Proposed Distribution Schedule where:

       a. the process by which the Special Master obtained CCI’s
       offer to purchase the Property was conducted outside of the
       bidding process, behind closed doors, and did not account
       for MPCA’s failure to close on the Sales Agreement with
       VGRP;

       b. the sales price was $1.2 million less than VGRP’s offer;

       c. the Special Master failed to provide the [c]ourt with
       evidence that CCI was financially able to close the
       transaction and misstated that VGRP did not have the

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         financial ability to close, again without any evidence to
         support that misstatement;

         d. the court had VGRP’s complaint in which VGRP was
         seeking the specific performance of MPCA to proceed with
         the sale under the Sales Agreement.

VGRP’s Pa.R.A.P. 1925(b) Statement, 5/14/19, at 1-2. On January 27, 2020,

the trial court filed an opinion pursuant to Pa.R.A.P. 1925(a).

      However, in its appellate brief, VGRP departs from the issues raised in

the Pa.R.A.P. 1925(b) statement and instead presents the following issues in

its statement of questions involved:

      [A]. Did the trial court err by forfeiting VGRP’s entire down
      payment to the seller?

      [B]. Did the trial court err when permitting the Special Master to
      sell the real estate to CCI when a sale to VGRP remained viable
      and in the best interests of the seller?

VGRP’s Brief at 6. Confusing the issues further, VGRP attempts to expand on

these issues in the argument portion of its brief as follows:

      A. VGRP Should Receive a Refund of its Down Payment.

         1. The trial court overlooked the law of contract conditions
         and materiality of breach.

         2. VGRP did not forfeit its down payment because MPCA’s
         appeal was a failure of a condition excusing VGRP’s duty to
         close.

         3. The Special Master’s failure to provide access to the
         property excused VGRP from closing.

            a) The extent to which the injured party will be
            deprived of the benefit which he reasonably expected;

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            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.

         4. Even if VGRP defaulted by failing to close, $1.5 million in
         liquidated damages amounts to an unreasonable penalty.

      B. The trial court erred by allowing the Special Master to sell the
      real estate to CCI when a sale to VGRP remained viable and in the
      best interests of the seller.

VGRP’s Brief at 26-38.

      We note the disparity between VGRP’s statement of questions involved

and the headings of the discrete issues enumerated in the argument portion

of VGRP’s brief. Id. at 6, 26-38. See Pa.R.A.P. 2116(a) (providing that the

statement of questions involved must state concisely the issues to be resolved

without unnecessary detail and will be deemed to include every subsidiary

question fairly comprised therein; an issue will not be considered unless it is

stated in the statement of questions involved or is fairly suggested thereby);

see also Pa.R.A.P. 2119(a) (stating that the argument shall be divided into

as many parts as there are questions to be argued).         Moreover, it is well

settled that any issues not raised in a court-ordered Pa.R.A.P. 1925(b)

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statement will be deemed waived on appeal. Commonwealth v. Castillo,

403, 888 A.2d 775, 780 (Pa. 2005); see also Lineberger v. Wyeth, 894

A.2d 141, 148 n.4 (Pa. Super. 2006) (noting that the principles enunciated in

criminal cases surrounding application of Rule 1925(b) and concise statements

of errors complained of on appeal apply equally to civil cases).

       We are constrained to point out that our review is hampered by the

discrepancy between VGRP’s Pa.R.A.P. 1925(b) statement, which was

presented to the trial court, and the issues VGRP purports to raise in its

appellate brief. VGRP’s statement of questions involved and the sub-issues

later presented in the argument portion of the brief bear little, if any relation

to VGRP’s Pa.R.A.P. 1925(b) statement. The majority of VGRP’s issues in its

appellate brief never were presented to the trial court. For the reasons set

forth below, we deem these issues waived on appeal.                See Pa.R.A.P.

1925(b)(4)(vii) (“Issues not included in the [Pa.R.A.P. 1925(b)] Statement ...

are waived.”); see also Pa.R.A.P. 302 (“Issues not raised in the lower court

are waived and cannot be raised for the first time on appeal.”). To the extent

that VGRP’s issues or sub-issues are fairly suggested by the statement of

questions involved and properly preserved for appeal, we attempt to address

them.3

____________________________________________

3  We also note that the trial court expressed its consternation with VGRP’s
failure to identify with specificity the issues it purported to raise on appeal and
concluded that it could not address issues of which it was not aware. Trial
Court Opinion, 1/27/20, at 9.

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      In its brief, VGRP’s first issue and sub-issues concern the forfeiture of

its down payment made pursuant the October 18, 2018 agreement of sale

between VGRP and MPCA (“the agreement”).              The issues concern the

interpretation of that contract. As such, the scope of our review is plenary,

and our standard of review is de novo. Michael and Linda, LLC v. Smith,

216 A.3d 262, 264 (Pa. Super. 2019).

      VGRP contends that the trial court erred when it found VGRP in default

under the agreement and permitted MPCA to retain VGRP’s down payment of

$1.5 million. VGRP’s Brief at 26. VGRP then enumerates examples of the trial

court’s alleged errors. Id. at 26-36.

      Relative to VGRP’s default as the buyer, the agreement provides as

follows:

      20. Buyer’s Default. If Buyer shall default in performance of its
      obligations under this Agreement, Seller’s sole remedy shall be to
      waive any claim for loss of bargain, in which event the Down
      Payment shall be retained by Seller as liquidated damages,
      whereupon Buyer and Seller shall be relieved of all further liability
      under this Agreement and this Agreement shall terminate
      forthwith and be of no further force and effect, except for
      obligations which expressly survive termination of this Agreement
      and any indemnification obligations.

The Agreement, 10/18/18, at ¶ 20.

      VGRP asserts that the trial court failed to weigh the “materiality” of its

breach. VGRP’s Brief at 26. In response, Appellees assert that VGRP did not

raise this issue before the trial court. Appellees’ Brief at 58. We agree and

conclude that VGRP never raised a claim concerning the materiality of the

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breach in its Pa.R.A.P. 1925(b) statement. Accordingly, this issue is waived.

Castillo, 888 A.2d at 780.

      Next, VGRP alleges that it did not forfeit its down payment because

MPCA breached the agreement when it filed an appeal that later was

withdrawn.    VGRP’s Brief at 31.     However, VGRP failed to raise an issue

concerning MPCA filing an appeal in its Pa.R.A.P. 1925(b) statement.

Although, in a boilerplate fashion, VGRP did allege that MPCA was in default,

VGRP never informed the trial court what action or inaction constituted that

alleged default.   Indeed, the trial court stated: “VGRP does not bother to

inform us what [its] claim of material default on the part of MPCA was. …

[T]his [c]ourt can[not] address something of which it is not aware.”       Trial

Court Opinion, 1/27/20, at 9. We conclude that VGRP’s vague allegation of

error again results in waiver. See Satiro v. Maninno, 237 A.3d 1145, 1150

(Pa. Super. 2020) (a Pa.R.A.P. 1925(b) statement that is too vague to allow

the trial court to identify the issue results in waiver).

      In its third sub-issue, VGRP alleges that the trial court erred in

concluding that VGRP was in breach because the Special Master failed to

provide access to the property. VGRP’s Brief at 32. This issue was not raised

in the VGRP’s Pa.R.A.P. 1925(b) statement.            Accordingly, it is waived.

Castillo, 888 A.2d at 780. Nevertheless, although we conclude this issue is

waived, we note that in its opinion, the trial court pointed out that the

agreement specifically provided that VGRP was afforded no right to inspection

or due diligence.     Trial Court Opinion, 1/27/20, at 5; The Agreement,

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10/18/18, at ¶ 5. VGRP’s argument concerning access to the property is a

benefit for which it did not bargain. However, insofar as VGRP now asserts in

its brief that having access to the property was an affirmative duty under ¶ 12

of the agreement, VGRP’s Brief at 14, that issue was not raised in VGRP’s

Pa.R.A.P. 1925(b) statement and is waived on appeal. Castillo, 888 A.2d at

780.

       VGRP’s next sub-issues, (3)(a)-(e), enumerate factors from the

Restatement (Second) of Contracts concerning “materiality” of the breach that

the trial court allegedly failed to consider. VGRP’s Brief at 34-36. However,

as stated above, VGRP never mentioned the materiality of the breach before

the trial court. Moreover, VGRP did not raise the Restatement or any of its

factors in its Pa.R.A.P. 1925(b) statement. Therefore, we conclude that these

sub-issues are waived as well. Castillo, 888 A.2d at 780; Satiro, 237 A.3d

at 1150.

       VGRP next contends that even if it defaulted by failing to close on the

sale of the property, forfeiting the $1.5 million down payment as liquidated

damages amounts to an unreasonable penalty. VGRP’s Brief at 36.           Once

again, VGRP did not raise this issue in its Pa.R.A.P. 1925(b) statement.

Instead, VGRP alleged that the trial court erred in ordering VGRP’s $1.5 million

to be released to MPCA as liquidated damages “where MPCA had not adhered

[to] the procedural predicates to secure damages, established liability on the

part of VGRP, or established that the deposit constituted reasonable liquidated

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damages in the event that it did establish liability[.]”       VGRP’s Pa.R.A.P.

1925(b) Statement, 5/14/19, at 2.

      In its opinion, the trial court addressed this boilerplate issue as follows:

            This [c]ourt held a hearing on April 10th, 2019 on the
      Special Master’s March 5, 2019 recommendation to Approve the
      Sale to CCI. In its Order of April 1[2], this [c]ourt approved the
      sale to CCI and specifically confirmed the default of VGRP. VGRP
      was given the opportunity to be heard on the issue of its default,
      and it[s] unclear what other “procedural predicates” VGRP claims
      were required.

Trial Court Opinion, 1/27/20, at 10. We reiterate that a Pa.R.A.P. 1925(b)

statement that is too vague to identify an issue results in waiver. Satiro, 237

A.3d at 1150.

      However, assuming arguendo, that VGRP had properly preserved and

presented this issue on appeal, we would conclude that it is without merit.

Indeed, the trial court confirmed that VGRP forfeited its $1.5 million down

payment. Although VGRP contends that $1.5 million is an “illegal penalty,”

VGRP’s Brief at 36, were we to reach this issue, we would disagree.

      This Court has opined:

      Liquidated damages is a term of art originally derived from
      contract law; it denotes “‘the sum a party to a contract agrees to
      pay if he breaks some promise, and which, having been arrived at
      by a good faith effort to estimate in advance the actual damage
      that will probably ensue from the breach, is legally recoverable ...
      if the breach occurs.’” In re Plywood Co. of Pa., 425 F.2d 151,
      154 (3d Cir. 1970) (quoting Westmount Country Club v.
      Kameny, 82 N.J.Super. 200, 197 A.2d 379, 382 (1964)). A
      penalty, by contrast, is fixed, “not as a pre-estimate of probable
      actual damages, but as a punishment, the threat of which is
      designed to prevent the breach.” Westmount Country Club,

                                     - 19 -
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      197 A.2d at 382 (citing McCormick, DAMAGES § 146, pp. 599-
      600). Thus, contracting parties may provide for pre-determined
      liquidated damages in the event one party fails to perform,
      particularly in circumstances where actual damages would be
      difficult to estimate in advance or to prove after a breach occurs.
      See Commonwealth v. Musser Forests, Inc., 394 Pa. 205,
      213, 146 A.2d 714, 718 (1958); Kelso v. Reid, 145 Pa. 606, 611,
      23 A. 323 (1892); RESTATEMENT (SECOND) OF CONTRACTS, §
      356(1)(“Damages for breach by either party may be liquidated in
      the agreement but only at an amount that is reasonable in the
      light of the anticipated or actual loss caused by the breach and
      the difficulties of proof of loss; a term fixing unreasonably large
      liquidated damages is unenforceable on grounds of public policy
      as a penalty.”). See generally Geisinger Clinic v. Di Cuccio,
      414 Pa.Super. 85, 99, 606 A.2d 509, 516 (1992) (listing criteria
      to differentiate liquidated damages from penalties).

Pantuso Motors, Inc. v. Corestates Bank, N.A., 798 A.2d 1277, 1282, (Pa.

2002). “Traditionally, a forfeiture that reflects nine percent, see Laughlin v.

Baltalden, Inc., 191 Pa.Super. 611, 159 A.2d 26 (1960), or ten percent, see

Kraft v. Michael, 166 Pa.Super. 57, 70 A.2d 424 (1950), of the purchase

price is not tantamount to a penalty.” Palmieri v. Partridge, 853 A.2d 1076,

1081 (Pa. Super. 2004).

      Herein, the parties agreed that in the event of default, VGRP would

forfeit its down payment. The Agreement, 10/18/18, at ¶ 20. Moreover, the

$1.5 million down payment constituted substantially less than the nine or ten

percent forfeitures that this Court has not deemed penalties. Palmieri, 853

A.2d at 1081. Were we to reach this issue, we would conclude that VGRP’s

forfeited down payment, which represented approximately 2.6% of the $58.75

million purchase price, was not a penalty.

                                    - 20 -
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      In its final issue, VGRP asserts that the trial court abused its discretion

in permitting the sale of the property to CCI because a sale to VGRP remained

viable and in the best interests of the seller. VGRP’s Brief at 38. However, in

its brief, VGRP provided no citation to relevant authority to substantiate its

final claim of error. It is well settled that the “[f]ailure to cite relevant legal

authority constitutes waiver of the claim on appeal.”           In re Estate of

Whitley, 50 A.3d 203, 209 (Pa. Super. 2012). Accordingly, we deem this

issued waived.

      Were we to address this issue, we would affirm on the basis of the trial

court opinion, which addressed the issue as it was presented in VGRP’s

Pa.R.A.P. 1925(b) statement, as follows:

      a) After the initial bids were placed, the Special Master proceeded
      to negotiate with both CCI and VGRP to endeavor or close the best
      deal for MPCA. Negotiation in the context of a sales process is the
      norm, and there was no procedure in place or Order of Court that
      prohibited the Special Master from communicating with each
      potential buyer separately. That being said, it was apparent at
      the [c]ourt hearings that both parties were consistently and
      contemporaneously advised by the Special Master of all on going
      negotiations.

      b) This [c]ourt found and agrees with the Special Master and, his
      broker, CBRE and that the CCI deal was the best offer for MPCA.

      c) The Special Master did not state to the [c]ourt that VGRP did
      not have the financial ability to close, but only stated to the [c]ourt
      that the Special Master had requested and VGRP failed to supply
      reasonable assurance that it had the financial resources to close.
      The onus was on VGRP to produce evidence to the Special Master
      and for whatever reason, it failed to do so.

      d) The [c]ourt did indeed have VGRP’s Complaint Seeking Specific
      Performance. VRGP had already defaulted and its Sales

                                      - 21 -
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       Agreement with MPCA had been terminated as of the Special
       Master’s letter of December 3, 2019. Therefore, there was not an
       agreement in existence upon which to Order specific performance.

                                     CONCLUSION

             The sale process utilized by the Special Master was a
       success yielding the highest and best offer for MPCA, ending the
       deadlock in it[s] ownership/management and producing the best
       return for its owners. VGRP as the initial successful bidder had
       every opportunity to buy the apartment complex under the terms
       to which it had agreed. It[s] failure to do so does not create error
       on the part of this [c]ourt.

Trial Court Opinion, 1/27/20, at 11.

       For the reasons set forth above, we conclude that VGRP is entitled to no

relief.4 Accordingly, we affirm the April 12, 2019 order.

____________________________________________

4  Appellees assert that VGRP’s appeal should be dismissed as moot because
the apartment building was sold to CCI, the LAV defendant’s received their
distribution and cannot be made to return that payment, and VGRP did not
obtain a stay pending appeal. Appellees’ Brief at 41-46. Therefore, Appellees
claim that neither this Court nor the trial court has the authority to grant VGRP
relief. Id. at 44-46. Conversely, VGRP argues that despite the procedural
posture, the appeal is not moot. VGRP’s Reply Brief at 6. VGRP contends that
MPCA is the responsible party, the Special Master still holds $2.25 million in
escrow for outstanding liabilities, the LAV defendants were not a party the
agreement, and, pursuant to a public record search, CCI remains the owner
of the apartment building. Id. at 7-8 (citing VGRP’s Answer to Appellees’
Motion to Dismiss for Mootness). Thus, VGRP contends that this Court has
the authority to direct the payment of money and direct the transfer of title
to the property. Id. at 8. We note that “[a]n issue can become moot during
the pendency of an appeal due to an intervening change in the facts of the
case or due to an intervening change in the applicable law.” Deutsche Bank
Nat. Co. v. Butler, 868 A.2d 574, 577, (Pa. Super. 2005) (quotation
omitted). “An issue before a court is moot if in ruling upon the issue the court
cannot enter an order that has any legal force or effect.” Id. (citation
omitted). Because it appears that the facts of this matter have remained
unchanged, we do not find the appeal moot. Nevertheless, we conclude that
VGRP is entitled to no relief.

                                          - 22 -
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     Order affirmed.

     Judge Musmanno joins the Memorandum.

     Judge McLaughlin concurs in the result.

Judgment Entered.

Joseph D. Seletyn, Esq.
Prothonotary

Date: 04/21/2021

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