Court Opinion

ID: 5175922
Source: CourtListenerOpinion
Date Created: 2022-01-04 19:12:38.431605+00
Date Added: 2024-06-11T08:26:18.595837
License: Public Domain

J-A21029-21

NON-PRECEDENTIAL DECISION - SEE SUPERIOR COURT I.O.P. 65.37

    MICHAEL’S LA VERANDA, INC                  :   IN THE SUPERIOR COURT OF
                                               :        PENNSYLVANIA
                                               :
                v.                             :
                                               :
                                               :
    RIVERSTONE RIVERFRONT, INC                 :
                                               :
                       Appellant               :   No. 2217 EDA 2020

                Appeal from the Order Entered October 20, 2020
      In the Court of Common Pleas of Philadelphia County Civil Division at
                            No(s): No. 200601545

BEFORE:      KUNSELMAN, J., NICHOLS, J., and STEVENS, P.J.E.*

MEMORANDUM BY NICHOLS, J.:                             FILED JANUARY 4, 2022

        Appellant Riverstone Riverfront, Inc. appeals from the order denying its

petition to open the confessed judgment entered in favor of Appellee Michael’s

La Veranda, Inc. Appellant claims that it raised a meritorious defense based

on fraudulent nondisclosure. We affirm.

        On December 16, 2019, Appellant and Appellee entered into an

agreement of sub-sublease for a property on which Appellee operated a

restaurant (premises).           Agreement of Sub-Sublease, 12/16/19, at 1

(hereinafter 2019 sub-sublease).1 The 2019 sub-sublease contained remedies
____________________________________________

*   Former Justice specially assigned to the Superior Court.

1Prior to the 2019 sub-sublease at issue in this appeal, Headhouse Associates
and La Veranda Co. entered into the November 19, 1996 sublease (1996
sublease) of the premises for the operation of a restaurant. It appears that
La Veranda Co. assigned its interest under the 1996 sublease agreement to
(Footnote Continued Next Page)
J-A21029-21

provisions that permitted Appellee to enter a confessed judgment if Appellant

defaulted on its obligations, including the payment of rent.

       After discovering alleged zoning, licensing, and code violations,

Appellant commenced a separate action against Appellee and its individual

owner. In the separate action, Appellant filed an amended complaint on May

12, 2020, in which Appellant raised claims of breach of contract/quasi-contract

and fraud in the inducement, among other counts.

       In the instant matter, Appellee filed a complaint in confession of

judgment on June 25, 2020. On July 27, 2020, Appellant filed its petition to

strike and/or open confession of judgment, to stay execution, and to

consolidate. Therein, Appellant asserted:

       5. [Appellee’s owner], on behalf of [Appellee], represented that
       the premises was zoned and licensed to legally operate a two floor
       restaurant with live entertainment space and did not have existing
       code violations.

       6. [Appellee] represented that La Veranda [the existing restaurant
       at the premises] was operating legally with no code violations and
       with the proper licenses and zoning to operate both floors of the
       premises as part of the restaurant with live entertainment space.

       7. [Appellee] represented that the second floor and first floor
       banquet [areas] were used for parties and large events, and not
       for regular dining but that it could be used for regular dining due
       [sic] based on their set up and separate bar areas as there were
       no outstanding code violations or zoning or license issues.

____________________________________________

Appellee. 2019 Sub-Sublease, 12/16/19, at 1. As noted below, Appellee
attached copies of both the 2019 sub-sublease and the 1996 sublease to its
complaint in confession of judgment. However, neither Appellant nor Appellee
argued that the 1996 sublease contained provisions relevant to the entry of
the confessed judgment or Appellant’s petition to open.

                                           -2-
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       8. During the tour [Appellant’s] representative asked [Appellee’s
       owner] what the legal occupancy was for all three areas.

       9. [Appellee’s owner] stated that the lawful occupancy for the
       banquet room was 110 people, the lawful occupancy for the main
       dining area was 145 people and lawful occupancy for the second
       floor was 100 people.

       10. At no time prior to entering the Sub Sublease Agreement did
       [Appellee] disclose that the restaurant was operating illegally due
       to code violations or against what the premises had been zoned
       for.[2]

       11. [Appellant] signed a sub-sublease for the premises, which was
       fraudulently misrepresented by [Appellee], and [Appellant] paid
       for the transfer of the liquor license.

       12. After relying upon the fraudulent misrepresentations of
       [Appellee], it was discovered that the restaurant was operating
       illegally and operated with the following severe code violations and
       lacked the following licenses, permits and/or zoning:

          a) No food license;

          b) No Special Assembly and Occupancy License

          c) No Lawful Occupancy License for the banquet area on the
          first floor;

          d) No Lawful Occupancy License for the second floor;

          e) No zoning for the banquet area;

          f) No zoning for the second floor;

____________________________________________

2 We note that Appellee argues that Appellant waived its appellate arguments
based on fraudulent nondisclosure by failing to raise it in the petition to open
the confessed judgment. See Appellee’s Brief at 9-13. However, as indicated
above, Appellant alleged Appellees’ failures to disclose in the petition.
Additionally, Appellant alleged Appellee’s failures to disclose in its
memorandum of law accompanying the petition and in the amended complaint
from Appellant’s separate action against Appellant, which Appellant also
attached to the petition. These allegations were adequate to preserve the
issue, and we decline to find waiver.

                                           -3-
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         g) Faulty electrical work;

         h) Outdated and inoperable fire sprinkler system

         i) No permits for work performed in the restaurant for several
         years. Exhibit A.

      13. Following the signing of the lease [Appellant] requested a copy
      of the certificate of occupancy for all three room[s] from
      [Appellee].

      14. [Appellee] could only provide a copy of the certificate of
      occupancy for the first floor. Exhibit B

      15. Upon discovering the extensive violations [Appellant’s]
      attorney contacted [Appellee’s] attorney regarding the extensive
      issues with the property. Exhibit C

      16. Arguably, the sub-sublease is void or voidable due to doctrine
      of impossibility of performance and/or frustration of purpose since
      the restaurant was not operating legally.

      17. In the alternative, if the contract is not void or voidable,
      [Appellee] breached the contract and/or committed fraud.

      18. On or about March 31, 2020, [Appellant] filed a complaint
      against [Appellee and its owner] under docket #200302732.
      Exhibit D

      19. On or about May 12, 2020, [Appellant] filed an Amended
      Complaint. Exhibit E

Pet. to Strike and/or Open Confession of J., to Stay Execution, and to

Consolidate, 7/27/20, at 2-4 (unpaginated) (some formatting altered)

(hereinafter, Pet. to Open). The allegations in Appellant’s petition to open the

confessed judgment mirrored the amended complaint in Appellant’s separate

action against Appellee.

      Appellee filed a response opposing Appellant’s petition and asserted, in

relevant part, that the 2019 sub-sublease between the parties contained an

“as-is” provision in addition to an integration provision that barred evidence

                                      -4-
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of the representations made before the execution of the parties’ agreement.

Resp. in Opp’n to Pet. to Open, 9/9/20, at 2 (unpaginated).          Specifically,

Appellee relied on the following provisions set forth in the 2019 sub-sublease:

       6. CONDITION OF PREMISES: NO REPRESENTATIONS

       Sublessee [Appellant] has examined the Premises prior to and as
       a condition precedent to the execution hereof, and its execution
       of this Sub-sublease is conclusive evidence of Sublessee’s
       acceptance of the Premises in their “AS IS” condition, including all
       latent conditions thereof. Sublessor [Appellee] has no obligation
       to alter, repair, decorate or further improve the Premises, and any
       alteration, repairs, or modification necessary for Sublessee to use
       the Premises shall be made at the sole cost and expense of
       Sublessee excepting those alterations, repairs or modifications
       which are the obligation of Landlord under the Sublease,[3] if any,
       the cost and expense of which shall be the responsibility solely of
       Landlord. Sublessee acknowledges and agrees that except as
       expressly set forth in the AOS,[4] that neither Sublessor, its agents
       or representatives have made any representation as to: (i) the
       physical condition, repair, profitability of operation or possible
       uses of this Premises, (ii) the laws, governmental regulations and
       insurance underwriting standards and requirements applicable to
       the Premises or (iii) the compliance by the Premises with such
       laws, regulations and requirements and with the terms of the
       Sublease.

                                        *      *   *

       20. MISCELLANEOUS

____________________________________________

3 The 2019 sub-sublease designated Headhouse Associates as “Landlord.”
2019 Sub-Sublease at 1.

4Appellee asserts that “AOS” refers to an agreement of sale that “[t]he parties
had initially contemplated [but] never executed.” Appellee’s Brief at 5 n.1.
Appellee states that the reference to the agreement of sale “was erroneously
not omitted from the final draft of the [2019] Sub-Sublease.” Id. Appellant
did not dispute Appellee’s explanation in the trial court, nor does Appellant
raise an argument based on the reference to the AOS in the instant appeal.

                                            -5-
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                                       *       *   *

       d. Entire Agreement. This Sub-sublease contains the entire
       agreement between the parties hereto concerning the Premises,
       and shall not be modified in any manner except by a writing signed
       by Sublessor and Sublessee.

2019 Sub-Sublease, 12/16/19, at 5, 14.

       On October 20, 2020, the trial court denied Appellant’s petition to open

the confession of judgment. Order & Op., 10/20/20, at 1. In its accompanying

opinion, the trial court noted that “upon the filing of a petition to open

confession of judgment, ‘[t]he petitioning party bears the burden of producing

sufficient evidence to substantiate it[s] alleged defenses.’” Id. at 4 & n.11

(citing Haggerty v. Fetner, 481 A.2d 641, 644 (Pa. Super. 1984)). The trial

court denied Appellant’s petition to open the confessed judgment, concluding

that the as-is and integration provisions of the parties’ agreement barred

Appellant from offering evidence of “fraud and/or misrepresentation.” Id. at

5. The trial court’s order and opinion, however, quoted from the sublease “to

which [Appellant] was not a party” and that was “unrelated to the resolution

of this action.” Trial Ct. Op., 4/9/21, at 2 (unpaginated).

       On November 17, 2020, Appellant timely filed a notice of appeal and a

motion for reconsideration.5 The trial court did not order a Pa.R.A.P. 1925(b)

statement.
____________________________________________

5  The trial court did not expressly rule on Appellant’s motion for
reconsideration, but this fact does not affect this Court’s jurisdiction. It is well
settled that a reconsideration motion does not toll the time for taking an
appeal unless the trial court grants the motion within thirty days of the order
(Footnote Continued Next Page)

                                           -6-
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       Meanwhile, in Appellant’s separate action against Appellee, the trial

court sustained in part and overruled in part Appellee’s preliminary objections

on November 20, 2020. The trial court cited, in part, Youndt v. First Nat.

Bank of Port Allegany, 868 A.2d 539 (Pa. Super. 2005), a decision in which

this Court applied the “clear and free from doubt” standard for sustaining

preliminary objections that result in the dismissal of an action. See Youndt,

868 A.2d at 544 (noting that “it must appear with certainty that the law would

not permit recovery by the plaintiff upon the facts averred” and that “[a]ny

doubt should be resolved by a refusal to sustain the [preliminary] objections”

(citation omitted)).      Notably, in overruling one of Appellee’s preliminary

objections, the trial court explained that “[p]ursuant to the theory of

fraudulent nondisclosure, the allegations in the amended complaint are

specific enough to state a cause for fraud.” Order, No. 200302732, 11/20/20,

at 2 & n.4. The trial court added: “The as-is clause in the Agreement of Sub-

Sublease may be subject to different interpretations. Therefore, the claims

based on fraudulent nondisclosure are not dismissed.” Id. at 1 n.1.

       In the instant appeal, the trial court filed an opinion on April 9, 2021.

The trial court noted that its October 20, 2020 order and opinion denying

Appellant’s petition to open the confessed judgment quoted provisions of the
____________________________________________

being appealed. See Pa.R.A.P. 1701(b)(3); Stephens v. Messick, 799 A.2d
793, 800-01 (Pa. Super. 2002). “Normally, motions for reconsideration expire
on their own after the thirty day period” absent a trial court’s express ruling
granting reconsideration or vacating the order. See Stephens, 799 A.2d at
801.

                                           -7-
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unrelated 1996 sublease rather than the parties’ 2019 sub-sublease. Trial Ct.

Op., 4/9/21, at 2 & n.2. The trial court indicated that it would recommend

the affirmance of its order after correcting its quotations to include references

to the 2019 sub-sublease.6 Id.

       Appellant presents the following questions for our review:

       1. Did [the trial court] abuse [its] discretion when [it] concluded
          Appellant’s fraudulent nondisclosure claim against Appellee
          was not a meritorious defense in the confession of judgment
          case but was a legally sufficient cause of action in the [the
          separate] fraud case [by Appellant against Appellee]?

       2. Can the Superior Court judicially estop a trial court from
          entering two inconsistent orders in two related cases where the
          parties and facts are the same and the legal standard
          governing both rulings is the same?

Appellant’s Brief at 3 (formatting altered).

       In its first issue, Appellant contends that it presented a meritorious

defense to open the confessed judgment.          In support, Appellant relies on

____________________________________________

6 Because the trial court inadvertently quoted the 1996 sublease, it did not
consider the language of the 2019 sub-sublease in either its October 20, 2020
order and opinion or its April 9, 2021 opinion. We appreciate the trial court’s
candor and request for a remand. However, neither Appellant nor Appellee
seek a remand for a correction of the October 20, 2020 order and opinion.

We emphasize that the parties’ appellate arguments focus on the
interpretation and application of the 2019 sublease. Neither Appellant nor
Appellee contend that the 1996 sublease directly, or by incorporation through
the 2019 sub-sublease, relate to the issues raised in this appeal. Based on
our decision herein, we decline to remand solely for a correction of the order
and opinion to quote the 2019 sub-sublease.

                                           -8-
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Youndt to assert that it could raise a claim of fraudulent non-disclosure

despite the as-is and integration provisions in the 2019 sub-sublease. See

Appellant’s Brief at 15, 18, 23.       Appellant argues that when properly

interpreted, the as-is provision of the 2019 sub-sublease did not preclude a

defense based on Appellee’s failures to disclose the premises’ zoning,

licensing, and code issues. Id. at 24-27.

      The principles relevant to this appeal are well settled. “We review the

order denying [an a]ppellant’s petition to open the confessed judgment for an

abuse of discretion.” PNC Bank, Nat. Ass’n v. Bluestream Tech., Inc., 14

A.3d 831, 835 (Pa. Super. 2010) (citation omitted). “A petition to open rests

within the discretion of the trial court, and may be granted if the petitioner

(1) acts promptly, (2) alleges a meritorious defense, and (3) can produce

sufficient evidence to require submission of the case to a jury.” Id. at 836

(citation omitted and formatting altered).

      To establish a meritorious defense, a petitioner must produce evidence

supporting its claim. Gur v. Nadav, 178 A.3d 851, 858-59 (Pa. Super. 2018).

The evidence must show a sufficient basis for an issue to be submitted to a

jury, but the petitioner need not prove that it will prevail at trial. Id. at 858.

This Court “must view the facts most favorably to the moving party, we must

accept as true all the evidence and proper inferences in support of the defense

raised, and we must reject all adverse allegations.” Pops PCE TT, LP v. R &

R Rest. Grp., LLC., 208 A.3d 79, 86 (Pa. Super. 2019) (citation omitted),

appeal denied, 223 A.3d 656 (Pa. 2020).

                                      -9-
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        “The legal effect or enforceability of a contact provision presents a

question of law accorded full appellate review and is not limited to an abuse

of discretion standard.” Id. at 87 (citations and quotation marks omitted).

Our review of the trial court’s interpretation of a contract is de novo, and our

scope of review is plenary. Mitch v. XTO Energy, Inc., 212 A.3d 1135, 1138

(Pa. Super. 2019) (citation omitted).

        In Youndt, the trial court sustained the seller’s preliminary objections

to the buyers’ amended complaint, which asserted the seller’s fraud in the sale

of a motel.      Youndt, 868 A.2d at 543-44.            The Youndt Court initially

determined that the parol evidence rule barred evidence of the seller’s

affirmative misrepresentations and that the buyer failed to plead a cause of

action for fraudulent concealment.             Id. at 545-50.   The trial court also

concluded that an agreement for sale barred the buyers’ claims that the seller

intentionally and fraudulently failed to disclose problems with the motel’s

water and sewage system.7 Id. at 542-43, 552.

____________________________________________

7   In Youndt, the agreement for sale contained the following provisions:

        Clause C states that the “Seller shall warrant Water Pipes to Motel
        Units.” Clause D states that “Buyer is Buying Property in as is
        Condition.” On the second page of the Agreement, the final
        paragraph is entitled “Representations” and it states in bold print:

           It is understood that Buyer has inspected the
           property, or hereby waives the right to do so and has
           agreed to purchase it as a result of such inspection
           and not because of or in reliance upon any
           representation made by the Seller or any other
(Footnote Continued Next Page)

                                          - 10 -
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       Of relevance to this appeal, the Youndt Court separately addressed the

buyers’ claim for fraudulent nondisclosure.8 Id. at 550. The Court noted that

the Restatement (Second) of Torts § 551 imposed a duty to disclose as

follows:

       (1) One who fails to disclose to another a fact that he knows may
       justifiably induce the other to act or refrain from acting in a
       business transaction is subject to the same liability to the other as
       though he had represented the nonexistence of the matter that
       he has failed to disclose, if, but only if, he is under a duty to the
       other to exercise reasonable care to disclose the matter in
       question.

       (2) One party to a business transaction is under a duty to exercise
       reasonable care to disclose to the other before the transaction is
       consummated,

           (a) matters known to him that the other is entitled to know
           because of a fiduciary or other similar relation of trust and
           confidence between them; and

           (b) matters known to him that he knows to be necessary to
           prevent his partial or ambiguous statement of the facts from
           being misleading; and
____________________________________________

           officer, partner or employee of Seller, or by any
           Agent, Subagent, their salespeople and employees,
           officers and/or partners.

       The paragraph continues in regular print and states that
       Appellants were purchasing the property “in its present condition
       unless otherwise specified herein.”

Youndt, 868 A.2d at 543 (emphasis in original). The agreement for sale at
issue in Youndt also included an integration clause. Id.

8  As the Youndt Court noted, “[t]here are two separate torts that impose
liability for fraud upon a vendor of real estate in a commercial or residential
transaction even though the vendor made no affirmative misrepresentation:
(1) Fraudulent Concealment; and (2) Fraudulent Nondisclosure.” Id. at 549
(citations omitted).

                                          - 11 -
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        (c) subsequently acquired information that he knows will make
        untrue or misleading a previous representation that when
        made was true or believed to be so; and

        (d) the falsity of a representation not made with the
        expectation that it would be acted upon, if he subsequently
        learns that the other is about to act in reliance upon it in a
        transaction with him; and

        (e) facts basic to the transaction, if he knows that the other is
        about to enter into it under a mistake as to them, and that the
        other, because of the relationship between them, the customs
        of the trade or other objective circumstances, would reasonably
        expect a disclosure of those facts.

Id. at 550 (quoting Restatement (Second) Torts § 551 (1977)).

     The Youndt Court held that the buyers failed to establish the seller’s

duty to disclose under Section 551(2)(e). Id. at 551. The Court reasoned

that the buyers (1) “assumed the risk as to the existence of a defect [in the

sewage system” under the sales agreement, and (2) either waived or did not

afford themselves the opportunity to inspect as provided in the sales

agreement. Id. at 551-52. The Court noted that

        to a considerable extent, sanctioned by the customs and
        mores of the community, superior information and better
        business acumen are legitimate advantages, which lead to
        no liability. The [seller in a business transaction] may
        reasonably expect the [buyer] to make his own
        investigation, draw his own conclusions and protect himself;
        and if the [buyer] is indolent, inexperienced or ignorant, or
        his judgment is bad, or he does not have access to adequate
        information, the [seller] is under no obligation to make good
        his deficiencies.

                                   - 12 -
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Id. at 551–52 (citation omitted). Accordingly, the Youndt Court affirmed the

trial court’s decision to sustain the seller’s preliminary objection and dismiss

the buyers’ fraudulent nondisclosure claim. Id. at 552.

      Here, as noted above, Appellant relies on Youndt to assert that the

2019 sub-sublease did not bar the fraudulent nondisclosure defense it raised

in its petition to open the confessed judgment. Appellant’s Brief at 15, 22-23.

In support, Appellant interprets the three sentences of the as-is provision of

the 2019 sub-sublease as two distinct parts.      Id. at 24-27.   According to

Appellant, the first part consisted of the first two sentences, which when read

together, concerned the physical condition of the premises. Id. The second

part, which consisted of the third sentence, concerned Appellee’s disclaimers

of the premises’ legal condition. Id. at 27. Appellant continues that because

the term “as is” applied only in the first part of the provision concerning

physical defects, Appellant did not assume the risk of Appellee’s fraudulent

nondisclosures concerning the premises’ legal condition, such as zoning,

licensing, and code issues. Id. at 27. Alternatively, Appellant contends that

the as-is provision was ambiguous and that the intended meaning of the

provision was a jury issue. Id.   Appellant therefore concludes that it stated

a meritorious fraudulent nondisclosure defense justifying the opening of the

confessed judgment. Id.

      Appellee counters that Youndt requires this Court to affirm the trial

court’s denial of Appellant’s petition to open the confessed judgment.

Appellee’s Brief at 19-20. Appellee asserts that the as-is provision in the 2019

                                     - 13 -
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sub-sublease established that Appellant agreed to assume the risk of both the

physical and legal defects in the premises and that Appellee had no duty to

disclose the “purported code or zoning violations.” Id. at 17-19. Accordingly,

Appellee request that this Court uphold the trial court’s denial of Appellant’s

petition to open the confession of judgment.

      It is well settled that

      [i]n interpreting the language of a contract, we attempt to
      ascertain the intent of the parties and give it effect. When the
      words of an agreement are clear and unambiguous, the intent of
      the parties is to be ascertained from the language used in the
      agreement, which will be given its commonly accepted and plain
      meaning.       Additionally, in determining the intent of the
      contracting parties, all provisions in the agreement will be
      construed together and each will be given effect. Thus, we will
      not interpret one provision of a contract in a manner which results
      in another portion being annulled.

LJL Transp., Inc. v. Pilot Air Freight Corp., 962 A.2d 639, 647-48 (Pa.

2009) (citations omitted).

      Courts do not assume that a contract’s language was chosen
      carelessly, nor do they assume that the parties were ignorant of
      the meaning of the language they employed. . . .

      Only where a contract’s language is ambiguous may extrinsic or
      parol evidence be considered to determine the intent of the
      parties. A contract contains an ambiguity if it is reasonably
      susceptible of different constructions and capable of being
      understood in more than one sense. This question, however, is
      not resolved in a vacuum.       Instead, contractual terms are
      ambiguous if they are subject to more than one reasonable
      interpretation when applied to a particular set of facts. In the
      absence of an ambiguity, the plain meaning of the agreement will
      be enforced.

                                    - 14 -
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Murphy v. Duquesne Univ. of the Holy Ghost, 777 A.2d 418, 429-30 (Pa.

2001) (citations omitted and formatting altered). This Court “‘will not imply

a contract different than that which the parties have expressly adopted. This

rule is particularly apt when reviewing a contract involving two parties of

relatively equal bargaining power, as is generally the case in a commercial

lease setting.” Cambria-Stoltz Enterprises v. TNT Investments, 747 A.2d

947, 950 (Pa. Super. 2000) (citations and quotation marks omitted).

        Instantly, we reiterate that the as-is provision of the 2019 sub-sublease

consists of three sentences in a single paragraph, which stated, in relevant

part:

        [Appellant] has examined the Premises prior to and as a condition
        precedent to the execution hereof, and its execution of this Sub-
        sublease is conclusive evidence of [Appellant]’s acceptance of the
        Premises in their “AS IS” condition, including all latent conditions
        thereof. [Appellee] has no obligation to alter, repair, decorate or
        further improve the Premises, and any alteration, repairs, or
        modification necessary for [Appellant] to use the Premises shall
        be made at the sole cost and expense of [Appellant] . . . .
        [Appellant] acknowledges and agrees that . . . that neither
        [Appellee], its agents or representatives have made any
        representation as to: (i) the physical condition, repair, profitability
        of operation or possible uses of this Premises, (ii) the laws,
        governmental regulations and insurance underwriting standards
        and requirements applicable to the Premises or (iii) the
        compliance by the Premises with such laws, regulations and
        requirements and with the terms of the Sublease.

2019 Sub-Sublease at 5.

        The first sentence of the as-is provision states that Appellant

“examined” the premises and accepted it “as is” as to “all latent defects.”

2019 Sub-Sublease at 5 (emphasis added). The first sentence did not qualify

                                        - 15 -
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the phrase “latent defects.”       See id. The second sentence used terms such

as “alter,” “decorate,” and “improve,” which could concern physical aspects of

the premises. See id. However, the second sentence also absolved Appellee

of the costs of alterations, repair, or modification “necessary for [Appellant’s]

use.” See id. The phrase “necessary for use” encompasses not only physical

but also legal conditions, as Appellant, for example, claimed that faulty

electrical work and outdated fire sprinkler systems did not comply with codes

and regulations. See Pet. to Open at 3 & Ex. A. The third sentence of the as-

is provision disclaimed any representation by Appellee as to the “physical

condition” and “possible” uses of the premises, as well as the premises’

“compliance” with applicable “laws” and “regulations.”          See 2019 Sub-

Sublease at 5.

       Based on the foregoing, we conclude that Appellant’s interpretation of

the as-is provision as two distinct parts concerning the premises’ physical and

legal condition lacks merit.9        Contrary to Appellant’s claim, the first two

sentences of the as-is provision did not concern only physical defects. Further,

the third sentence clearly describes physical and legal defects.      When read

as a whole, the as-is provision established Appellant’s acceptance of the

premises as-is concerning all latent defects without qualification as to whether

____________________________________________

9As noted above the trial court did not consider the language of the 2019 sub-
sublease.    Nevertheless, this Court considers the interpretation and
application of the 2019 sub-sublease de novo. See Pops, 208 A.3d at 87
Mitch, 212 A.3d at 1138.

                                          - 16 -
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the defect was physical or legal. See id. Similar to Youndt, the 2019 sub-

sublease’s as-is provision required Appellant to assume the risk and costs to

make the premises suitable to Appellant’s use. See Youndt, 868 A.2d at 543,

551-52. As in Youndt, we are constrained to conclude that Appellant failed

to establish Appellee’s duty to disclose legal defects.          See id. at 551-52.

Accordingly,     Appellant    has    not    established   a   meritorious   fraudulent

nondisclosure defense against Appellee, and we will not disturb the trial court’s

ruling.10 See PNC Bank, 14 A.3d at 835.

       Next, Appellant contends that the trial court’s ruling in the instant case

was “unreasonable, arbitrary, or capricious” because it was inconsistent with

the court’s ruling in Appellant’s separate action against Appellee. Appellant’s

Brief at 28. Appellant notes that the trial court determined that Appellant

sufficiently alleged a claim of fraudulent nondisclosure in its separate action

against Appellee and concluded that the as-is provision was ambiguous.11 Id.
____________________________________________

10 Because we conclude that Appellant failed to establish Appellee’s duty to
disclose in light of the as-is provision in the 2019 sub-sublease and Youndt,
we need not address Appellant’s argument that the integration provision of
the 2019 sub-sublease did not bar its proposed fraudulent nondisclosure
defense.

11 More specifically, as noted above, the trial court overruled Appellee’s
preliminary objection in Appellant’s separate action against Appellee. The trial
court reasoned that the as-is provision of the 2019 sub-sublease “may be
subject to different interpretations” and that “the allegations in the
amended complaint are specific enough to state a cause” of action for
fraudulent nondisclosure. Order, No. 200302732, at 1 n.1, 2 & n.4 (emphases
added).

(Footnote Continued Next Page)

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at 30-31.     Appellant notes that its allegations in its petition to open the

confessed judgment in the present case and in its amended complaint in the

separate action are the same. Id. at 35-36. Appellant further asserts that

the legal standards for reviewing a petition to open a confessed judgment and

a preliminary objection are the same. Id. at 28, 30. Appellant requests that

this Court apply judicial estoppel to resolve the inconsistency between the trial

court’s rulings in the instant case and Appellant’s separate action against

Appellee.12 Id. at 32-38.
____________________________________________

We note that Appellant did not raise the possible inconsistencies between the
trial court’s rulings on Appellant’s petition to open the confessed judgment
and Appellee’s preliminary objection in the trial court. Further, the trial court
addressed the issue in its April 9, 2021 opinion. However, because the trial
court ruled on Appellee’s preliminary objections thirty-one days after the trial
court denied Appellant’s petition to open the confessed judgment, Appellant
did not have an opportunity to file a supplemental motion for reconsideration
to preserve the issue when challenging the denial of its petition to open.
Therefore, we decline to find waiver.

12   This Court discussed judicial estoppel as follows:

           Our Supreme Court has held that as a general rule, a party
           to an action is estopped from assuming a position
           inconsistent with his or her assertion in a previous action, if
           his or her contention was successfully maintained.
           Accordingly, judicial estoppel is properly applied only if the
           court concludes the following: (1) that the appellant
           assumed an inconsistent position in an earlier action; and
           (2) that the appellant’s contention was successfully
           maintained in that action.

        “The purpose of this doctrine is to uphold the integrity of the
        courts by preventing parties from abusing the judicial process by
        changing positions as the moment requires.”
(Footnote Continued Next Page)

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J-A21029-21

       Appellee responds that the standards governing the trial court’s rulings

in the instant case and in Appellant’s separate action against Appellee are

materially different. Appellee’s Brief at 20-22. Appellee adds that judicial

estoppel applies to parties, not courts. Id. at 23-24.

       For the reasons that follow, we conclude that materially different

standards distinguish the trial court’s consideration of a petition to open and

preliminary objections, and, therefore, Appellant’s arguments that the trial

court’s rulings were so inconsistent as to require estoppel of the trial court’s

denial of the petition to open lack merit.

       As noted above, in a petition to open a confessed judgment, a petitioner

must produce evidence supporting its claim of a meritorious defense. Gur,

178 A.3d at 859.

       The standard of sufficiency [when reviewing the merits of a
       proposed defense] is similar to the standard for a directed verdict,
       in that we must view the facts most favorably to the moving party,
       we must accept as true all the evidence and proper inferences in
       support of the defense raised, and we must reject all adverse
       allegations.

Pops, 208 A.3d at 86 (citation omitted).

       In the context of preliminary objections, the Youndt Court stated:

       Where affirmance of the trial court’s order sustaining preliminary
       objections would result in the dismissal of an action, we may do
       so only when the case is clear and free from doubt.

____________________________________________

Westfield Ins. Co. v. Astra Foods Inc., 134 A.3d 1045, 1051 (Pa. Super.
2016) (citations omitted).

                                          - 19 -
J-A21029-21

      To be clear and free from doubt that dismissal is appropriate, it
      must appear with certainty that the law would not permit recovery
      by the plaintiff upon the facts averred. Any doubt should be
      resolved by a refusal to sustain the objections. . . . A demurrer
      tests the sufficiency of challenged pleadings. Fact-based
      defenses, even those which might ultimately inure to the
      defendant’s benefit, are thus irrelevant on demurrer.

Youndt, 868 A.2d at 544 (emphasis added). Put differently, “[p]reliminary

objections in the nature of demurrers are proper when the law is clear that a

plaintiff is not entitled to recovery based on the facts alleged in the complaint.”

Yocca v. Pittsburgh Steelers Sports, Inc., 854 A.2d 425, 436 (Pa. 2004)

(citation omitted).

      Instantly, the standards governing the trial court’s ruling on Appellee’s

preliminary objections only required a review of the sufficiency of the

allegations in Appellant’s amended complaint in the separate action against

Appellee.   See id.     The standards governing the trial court’s ruling on

Appellant’s petition to open required the trial court to consider the sufficiency

of the Appellant’s evidence concerning its proposed defense. See Pops, 208

A.3d at 86.     While Appellant’s allegations in its separate action against

Appellee and the instant petition to open the confessed judgment were similar

in that Appellant asserted Appellee’s nondisclosure of the premises’ zoning,

licensing, and code violations, we cannot conclude that the trial court reached

inconsistent results. Rather, different legal standards applied when the trial

court ruled on Appellant’s petition to open the confessed judgment and

Appellee’s preliminary objection in Appellant’s separate action against

Appellee.     Accordingly, Appellant was not entitled to open the confessed

                                      - 20 -
J-A21029-21

judgment based on the trial court’s ruling on Appellee’s preliminary objection

in Appellant’s separate action.13

       Order affirmed.

Judgment Entered.

Joseph D. Seletyn, Esq.
Prothonotary

Date: 1/4/2022

____________________________________________

13 We emphasize that our decision to affirm the order denying Appellant’s
petition to open the confessed judgment is limited to the arguments presented
in this appeal. See Youndt, 868 A.2d at 543, 551-52. Therefore, we do not
opine on the trial court overruling Appellee’s preliminary objections in
Appellant’s separate action. Our decision in this appeal also does not preclude
Appellant from asserting, or the trial court from finding, that the as-is
provision in the sub-sublease is ambiguous for reasons different than those
described herein.

Additionally, Appellant does not argue in this appeal that the trial court erred
in denying its request to stay a decision on its petition to open the confessed
judgment pending its separate action against Appellee. Nevertheless, if
Appellant were to prevail in its separate action against Appellee, there may be
grounds for Appellant to open the confessed judgment. Cf. PNC Bank, 14
A.3d at 840 (noting that if a party were to prevail in a separate action for
fraud against the opposing party who entered a confessed judgment, then the
opposing party “would no longer be entitled to enforce the confessed
judgment”).

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