Court Opinion

ID: 9404611
Source: CourtListenerOpinion
Date Created: 2023-06-23 16:09:52.012849+00
Date Added: 2024-06-11T17:20:15.806050
License: Public Domain

J-A25034-22

NON-PRECEDENTIAL DECISION - SEE SUPERIOR COURT O.P. 65.37

 J.C. PENNEY CORPORATION, INC.,  :   IN THE SUPERIOR COURT OF
 A DELAWARE CORPORATION          :        PENNSYLVANIA
                                 :
                 Appellant       :
                                 :
                                 :
            v.                   :
                                 :
                                 :   No. 238 WDA 2022
 GFM 23, LLC, A PENNSYLVANIA     :
 LIMITED LIABILITY COMPANY,      :
 WILLIAM G. MCCONNELL, IN HIS    :
 CAPACITY AS TRUSTEE OF THE      :
 WILLIAM G. MCCONNELL FUNDED     :
 REVOCABLE TRUST AGREEMENT,      :
 DATED FEBRUARY 1, 2000, EUGENIA :
 F. MCCONNELL, IN HER CAPACITY   :
 AS TRUSTEE OF THE EUGENIA F.    :
 MCCONNELL FUNDED REVOCABLE      :
 TRUST AGREEMENT, DATED          :
 FEBRUARY 1, 2000, G. THOMAS     :
 MCCONNELL AND CHARLENE S.       :
 MCCONNELL, HIS WIFE, MARY       :
 ELEANOR MILHEIM AND IRVINE G.   :
 MILHEIM, HER HUSBAND, MARTHA    :
 M. BEEZER AND GENE BEEZER, HER  :
 HUSBAND, WILLIAM G. MCCONNELL, :
 JR., AND JENNIFER S. MCCONNELL, :
 HIS WIFE, ANNE M. SHANNON AND   :
 MICHAEL R. SHANNON, HER         :
 HUSBAND, JOHN C. MCCONNELL      :
 AND SHANNON K. MCCONNELL, HIS   :
 WIFE, CATHERINE M. METTENBURG   :
 AND JOSEPH M. METTENBURG, HER   :
 HUSBAND, TERRENCE C.            :
 MCCONNELL, CYNTHIA M.           :
 ANDREYKO AND GREGORY M.         :
 ANDREYKO, HER HUSBAND,          :
 CATHLEEN L. HERBERGER AND       :
 TIMOTHY F. HERBERGER, HER       :
 HUSBAND, MATTHEW B. MCCONNELL :
 AND ANGELA M. MCCONNELL, HIS    :
J-A25034-22

    WIFE, MATTHEW B. MCCONNELL, IN                 :
    HIS CAPACITY AS TRUSTEE OF THE                 :
    MCCONNELL FARMS REVOCABLE                      :
    TRUST, DATED DECEMBER 11, 2017,                :
    STEPHEN G. MILHEIM, IN HIS                     :
    CAPACITY AS TRUSTEE OF THE                     :
    STEPHEN G. MILHEIM REVOCABLE                   :
    TRUST, DATED JULY 11, 2013,                    :
    WILLIAM G. MILHEIM AND                         :
    JACQUELINE B. MILHEIM, HIS WIFE,               :
    ANNA MARIE MILHEIM, GEORGE H.                  :
    MILHEIM, MARY MICHELE MILHEIM,                 :
    HANNAH LEE MILHEIM, REBECCA B.                 :
    SMITH, AND WILLIAM D. SMITH,                   :
    HER HUSBAND, DAVID G. BEEZER                   :
    AND SHANNON BEEZER, HIS WIFE,                  :
    JOHANNA ELEANOR GIBSON AND                     :
    JOHN RYAN GIBSON, HER HUSBAND

               Appeal from the Order Entered January 28, 2022
         In the Court of Common Pleas of Mercer County Civil Division
                            at No(s): 2019-3655

BEFORE:       KUNSELMAN, J., NICHOLS, J., and McCAFFERY, J.

MEMORANDUM BY McCAFFERY, J.:                            FILED: June 23, 2023

       In   these    cross-actions     for     declaratory   judgment,   J.C.   Penney

Corporation, Inc., a Delaware corporation (Penney), appeals from the order

entered in the Mercer County Court of Common Pleas, declaring there is no

commercial lease currently binding the parties,1 and thus Penney is a tenant

____________________________________________

1 The defendants in the underlying proceedings, who were also the initial
appellees in this appeal, were: GFM 23, LLC; multiple members of the
McConnell family; and other individuals, some in their individual capacities
and some as trustees of trusts. They co-owned the property at issue in this
matter.
(Footnote Continued Next Page)

                                             -2-
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at will. Penney argues the trial court erred in: (1) interpreting the phrase,

“any extension thereof,” appearing in the parties’ 1967 agreement, to mean

only the extensions set forth in Penney’s original 1966 sublease, and did not,

as Penney argues, include its 2003 amended sublease agreement; and (2)

finding the 2003 amended agreement was not an “extension” of the 1966

agreement. After careful review, we affirm.

                                        I. Facts

       In reviewing the parties’ claims, we must examine four related

agreements. The underlying facts are generally not disputed, although the

parties disagree as to the legal effect of some events. See N.T. at 4. We

glean the following history from the parties’ well-presented arguments at the

November 23, 2021, hearing before the trial court, as well as the court’s

opinion.

____________________________________________

       On October 17, 2022, Butterfli Holdings 011 LLC (Butterfli) filed a
petition with this Court to intervene and be substituted as appellee. Butterfli
averred it purchased the property at issue on August 5, 2022, and assumed
all of the prior owners’ rights, title, and interests in the property. This Court
granted the petition to be substituted as appellee on October 20th. Both the
original appellees and Butterfli are represented by the same attorney, William
McConnell, Jr., Esquire, who himself is part of the McConnell family that owned
the property. See N.T., 11/23/21, at 33. For ease of discussion, as the factual
history involves numerous parties and their successors, the identities of whom
are not germane to our legal analysis, we will refer to the original owners of
the property and their successors collectively as “Owner.”

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        Beginning in the 1940s, Owner owned land in Hermitage, Mercer

County. N.T. at 6. On May 31, 1966, Owner executed a commercial ground

lease (1966 Ground Lease) with Crown Construction Company (Crown), as

lessor. Crown constructed the Shenango Valley Mall on the property, and then

owned the mall. Id. at 6, 14. The lease between Owner and Crown had a

35-year term and provided three five-year renewal periods, for a total 50-year

term.

        On October 27, 1966, Crown entered into a sublease with Penney (1966

Penney Sublease), which had an initial term of 25 years.              The sublease

provided a “15-year automatic extension” should Penney expand its store, but

“that expansion never occurred” and thus this extension was not triggered.

N.T. at 7. The sublease further provided Penney the option to extend the

sublease by four consecutive five-year periods.2

        Three months thereafter, on January 23, 1967, Owner, Crown, and

Penney executed an “Owner Agreement.” Its purpose was to protect Penney’s

sublease interests in the event of termination of the 1966 Ground Lease. N.T.

at 11-12. Owner would stand in the place of Crown and be bound by the

terms of Penney’s sublease.           Trial Ct. Op., 1/28/22, at 3.    Pertinently,

Paragraph 4(a) set forth the duration of the Owner Agreement:

____________________________________________

2 If all of the above extensions were made, the total term of the sublease
would have been 60 years — 10 years longer than the maximum possible
ground lease between Owner and Crown. N.T. at 9-10.

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     4. If Penney shall perform the obligations under the Penney
     Lease[, Owner] covenants and agrees that:

          a. Penney shall have and enjoy during the term of the
          Penney Lease and any extension thereof[,] the quiet and
          undisturbed possession of the premises . . . and Penney’s
          possession and rights under the Penney Lease shall not be
          adversely affected in any way by reason of default by
          Crown[,] termination or cancellation of the [G]round
          [L]ease . . . .

Owner Agreement, recorded 9/18/67, at 1-2 (emphasis added), Exh. 2 to

Penney’s Complaint in Action for Declaratory Judgment, 11/13/19.

     It is the interpretation of the above phrase, “any extension thereof” —

not defined in the Owner Agreement —that is the subject matter of the parties’

cross-declaratory   actions.   Owner    contends   “any   extension   thereof”

unambiguously means only the extensions set forth in the 1966 Penney

Sublease — i.e., the automatic 15-year extension if Penney expanded its

store, along with the four optional five-year extensions. See N.T. at 18.

     Penney exercised the entire 25 year-initial term of its 1966 sublease, as

well as two of the four optional five-year extensions. Accordingly, the new

end date of the sublease became January 31, 2004. Trial Ct. Op. at 3; N.T.

at 10. However, prior to this date, on July 7, 2003, Crown and Penney entered

into an agreement, entitled “Lease Extension/Modification Agreement” (2003

Penney Sublease). This agreement did not include Owner as a party. The

trial court noted the 2003 agreement

     substantially altered the terms of the [1966 Penney Sublease] in
     various ways, including, inter alia:

                                    -5-
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            a. Extend[ing] the “base term” for 5 years.

            b. Offering four . . . additional five . . . year extensions[.] If
            fully exercised, the [2003 Penney Sublease] would have
            terminated on Jan. 31, 2029 (later than any extension
            contemplated in the [1966 Penney Sublease]).

            C. Alter[ing] terms of “Net Retail Sales” as specified under
            [the 1966 Penney Sublease, which were used to calculate
            rent, and]

            d. Add[ing] the term “Reserved Tracts,” putting substantial
            limitations on [Crown’s] rights to alter the premises.

Trial Ct. Op. at 3-4.

       Penney’s central argument in this matter is that: (1) the phrase, “any

extension     thereof,”    at   Paragraph      4(a)   of   the   Owner   Agreement,

unambiguously means any extension whatsoever, without any limitations; (2)

the phrase thus encompasses the 2003 Penney Sublease; and accordingly (3)

pursuant to the Owner Agreement, Owner continues to stand in Crown’s place

and is bound to recognize Penney’s sublease rights.3 See N.T. at 35. Owner,

on the other hand — in addition to its above argument — contends the 2003

Penney Sublease is not in fact an “extension” of the 1966 Penney Sublease

because it altered so many material terms, and instead, the 2003 sublease is

an amended or even new sublease. Id. at 18, 27. Finally, Owner avers that

when it executed the Owner Agreement in 1967, it contemplated only the

____________________________________________

3 Penney argues it has one remaining option to extend the 2003 Penney
Sublease by five years, through 2029. N.T. at 41.

                                           -6-
J-A25034-22

1966 Penney Sublease, and never consented to being bound by any potential

agreement to be made 50 years in the future. Id. at 18.

       Returning to the factual history of this case, we summarize that Crown’s

rights under the 1966 Ground Lease were assigned several times. The final

assignee defaulted on the Ground Lease in 2017 or 2018.4 N.T. at 13. Owner

initiated an action to terminate the Ground Lease, and by court order of

January 18, 2019, it was terminated. As a result, Owner came to own, in

addition to the land, the mall and the buildings upon it. Id. at 14.

       According to Owner, it considered Penney, at that point, to be a holdover

tenant and accepted rent from Penney accordingly. N.T. at 30. Penney, on

the other hand, contends that when it provided Owner with a copy of the

Owner Agreement, Owner did not deny that the Owner Agreement was in

effect, nor did it inform Penney of its purported month-to-month or at-will

tenant status. Id. at 46-47. Instead, Penney claims, Owner merely replied it

would “step into the shoes of the landlord on the [Penney] lease,” which

signfied Owner’s understanding that the Owner Agreement and 2003 Penney

Sublease remained in effect. Id. at 47.

____________________________________________

4The final assignee was Iowa Square Realty. Penney provides the Mercer
County Court of Common Pleas trial docket number for this lawsuit as 2018-
3258. Penney’s Brief at 16.

                                           -7-
J-A25034-22

       In any event, on October 23, 2019, Owner notified Penney that, in light

of the dissolution of the 1966 Ground Lease between Crown and Owner,

Penney was now a tenant at will.

                               II. Procedural History

       On November 13, 2019, Penney filed a complaint for declaratory

judgment. Owner filed an answer, new matter, and counterclaim, likewise

seeking declaratory judgment.5           The trial court heard oral argument on

November 23, 2021, portions of which are summarized above.

       On January 28, 2022, the court issued the underlying order, declaring:

(1) the Owner Agreement phrase, “any extension thereof,” unambiguously

bound Owner only to the 1966 Penney Sublease; (2) the 2003 Penney

Sublease was not an extension of the 1966 sublease, as it made material

modifications; and (3) accordingly, Owner’s obligations under the Owner

____________________________________________

5 We note that on March 23, 2020, the entire bench of the Mercer County
Court of Common Pleas recused from this matter, as it involves a Mercer
County commissioner. The Honorable Harry Knafelc, Senior Judge of the
Beaver County Court of Common Pleas, was accordingly specially appointed
to preside over this matter.

      On May 29, 2020, Penney filed a suggestion of bankruptcy and notice of
automatic stay. The bankruptcy was discharged 10 months later, and on April
9, 2021, the court ordered the parties to resume this litigation.

       Meanwhile, on January 6, 2020, Owner filed a motion for summary
judgment, and on September 14, 2021, Penney filed a cross-motion for
summary judgment. No rulings on these motions appear in the record or on
the trial docket.

                                           -8-
J-A25034-22

Agreement were extinguished by the execution of the 2003 Penney Sublease.

Order, 1/28/22, at 15-16. The court thus concluded there was presently no

contractual relationship between Owner and Penney and, because Owner

continued to accept rent, Penney was a tenant at will. Id. at 16.

        Penney filed a timely notice of appeal, and in response to the trial court’s

order, filed a Pa.R.A.P. 1925 statement of errors complained of on appeal.6

                    III. Statement of Questions Involved

        Penney presents six related issues for this Court’s review:7

        1. Does the term “any extension thereof” in Section 4(a) of the
        Owner Agreement encompass any extension of the original [1966
        Penney Sublease’s] term — including those provided in the 2003
        [Penney Sublease] — and not only the four five-year extensions
        specified in the original [1966 Penney Sublease]?

        2. Does [Owner’s] express consent to and approval of the original
        [1966 Penney Sublease], including the provision that the original
        [1966 Penney Sublease] could be amended by Penney and
        [Crown] without [Owner’s] consent or approval, confirm that
        Section 4(a) of the Owner Agreement encompasses any extension
        and/or amendment of the original [1966 Penney Sublease],
        including the 2003 [Penney Sublease]?

        3. Does the 2003 [Penney Sublease] constitute an extension and
        amendment of the original Penney Lease rather than an entirely
        new lease agreement that extinguished the original [1966 Penney
        Sublease]?
____________________________________________

6Penney’s Rule 1925(b) statement raised 22 enumerated claims. We remind
counsel that a prolix statement presenting “an outrageous number of issues”
may “circumvent[ ] the meaning and purpose of Rule 1925(b) and . . . thereby
effectively preclude[ ] appellate review of the issues[.]” See Kanter v.
Epstein, 866 A.2d 394, 401 (Pa. Super. 2004).

7   We have reordered Penney’s issues for ease of review.

                                           -9-
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      4. Did the trial court err in considering provisions of agreements
      outside the Owner Agreement, including an insert to page 18(a)
      of the [1966 Penney Sublease], to support a narrow interpretation
      of Section 4(a) of the Owner Agreement?

      5. Should [Owner’s] conduct in 2019 be considered in determining
      the proper interpretation of the term “any extension thereof” in
      Section 4(a) of the Owner Agreement?

      6. If the Owner Agreement applies to any extension of the [1966
      Penney Sublease] and not just the extensions set forth in the
      original [1966 Penney Sublease], are the provisions of the [1966
      Penney Sublease] as amended by the 2003 [Penney Sublease]
      enforceable against [Owner] under the Owner Agreement?

Appellant’s Brief at 5-7.

              IV. Standard of Review & Relevant Authority

      We first consider the relevant standard of review: “The interpretation

of any contract is a question of law and this Court’s scope of review is plenary.

[W]e need not defer to the conclusions of the trial court and are free to draw

our own inferences.” Sw. Energy Prod. Co. v. Forest Res., LLC, 83 A.3d

177, 187 (Pa. Super. 2013) (citation omitted).

      This Court has stated:

      When interpreting the language of a contract, the intention of the
      parties is a paramount consideration. “In determining the intent
      of the parties to a written agreement, the court looks to what they
      have clearly expressed, for the law does not assume that the
      language of the contract was chosen carelessly.”

      When interpreting agreements containing clear and unambiguous
      terms, we need only examine the writing itself to give effect to
      the parties’ intent. The language of a contract is unambiguous if
      we can determine its meaning “without any guide other than a
      knowledge of the simple facts on which, from the nature of the
      language in general, its meaning depends.” “When terms in a

                                     - 10 -
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      contract are not defined, we must construe the words in
      accordance with their natural, plain, and ordinary meaning.” As
      the parties have the right to make their own contract, we will not
      modify the plain meaning of the words under the guise of
      interpretation or give the language a construction in conflict with
      the accepted meaning of the language used.

      On the contrary, the terms of a contract are ambiguous if the
      terms are reasonably or fairly susceptible of different
      constructions and are capable of being understood in more than
      one sense. Additionally, we will determine that the language is
      ambiguous if the language is “obscure in meaning through
      indefiniteness of expression or has a double meaning.” Where the
      language of the contract is ambiguous, the provision is to be
      construed against the drafter.

State Farm Fire & Cas. Co. v. PECO, 54 A.3d 921, 928 (Pa. Super. 2012)

(State Farm) (citations omitted). “The fact that the parties have different

interpretations of a contract does not render the contract ambiguous.” Tuthill

v. Tuthill, 763 A.2d 417, 420 (Pa. Super. 2000) (en banc) (citation omitted).

“The whole instrument must be taken together in arriving at contractual

intent.” Mitch v. XTO Energy, Inc., 212 A.3d 1135, 1138 (Pa. Super. 2019).

              V. Plain Meaning of “Any Extension Thereof”

      In its first issue, Penney maintains the unambiguous, plain, ordinary,

Merriam-Webster dictionary meaning of the word, “any,” means “any

whatsoever[,] without restriction or limitation.”   Penney’s Brief at 38, 39

(emphasis omitted). Accordingly, the phrase, “any extension thereof,” within

the Owner Agreement, applies to the 2003 Penney Sublease. Id. at 40-41

(emphasis added). Penney avers the trial court’s limitation on the phrase,

“any extension thereof,” was “an unjustifiably restrictive reading.” Id. at 33.

                                    - 11 -
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Penney further contends the court’s interpretation “undermines a central

purpose of the Owner Agreement, leaving Penney with no protection under its

lease upon the termination of the Ground Lease” between Crown and Owner.

Id.

      In its second issue, Penney avers the trial court erred in finding Owner

cannot be held to the terms of the 2003 Penney Sublease, where it did not

participate in the negotiation thereto. Penney’s Brief at 45-46. In support,

Penney contends the court failed to consider the statement in the Owner

Agreement, that Owner “hereby consents to and approves of the [1966

Penney Sublease,]” which in turn stated it could be modified by the parties

thereto — Penney and Crown. Id. at 12. Penney reads these terms together

to mean Owner expressly authorized Penney and Crown to amend the 1966

Penney Sublease without Owner’s prior approval. Id. at 42-43, citing Owner

Agreement at ¶ 3.    It contends, “If the Owner Agreement meant [Owner]

approved of the [1966 Penney Sublease] only in its original, unmodified

form, it would say so.” Penney’s Brief at 44-45.

      We agree with Penney’s initial argument — that the plain meaning of

the phrase, “any extension thereof,” was not limited to the extensions

specifically set forth in the 1966 Penney Sublease.

      As stated above, the trial court found the term, “any extension thereof,”

within Paragraph 4(a) of the Owner Agreement, was unambiguous. Trial Ct.

Op. at 6. Observing that a contract “should be a read as a whole” and “must

                                    - 12 -
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be interpreted to give effect to all of its provisions[,]” the court considered

both subsections of Paragraph 4:

          4. If Penney shall perform the obligations under the Penney
      Lease[, Owner] covenants and agrees that:

              a. Penney shall have and enjoy during the term of the
          Penney Lease and any extension thereof, the quiet and
          undisturbed possession of the premises . . . and Penney’s
          possession and rights under the Penney Lease shall not be
          adversely affected in any way by reason of default by
          Crown[,] termination or cancellation of the [G]round
          [L]ease . . . .

               b. In the event of the termination or cancellation of the
          [G]round [L]ease, the possession by Penney of the
          premises . . . under . . . the Penney Lease and all rights of
          Penney under the Penney Lease will be fully recognized and
          protected by [Owner], and [Owner] will assume and perform
          all the obligations set forth in the Penney Lease on the part
          of [Crown.]

See id. (emphases added); Owner Agreement at 1-2. The court reasoned

that when the above references to “the Penney Lease” are read together, it is

clear the Owner Agreement only endured through the base term of the 1966

Penney Sublease, its 15 year unexercised extension, and the four optional

five-year extensions. Trial Ct. Op. at 7.

      While we agree that terms of a “whole instrument must be taken

together in arriving at contractual intent,” Mitch, 212 A.3d at 1138, we

disagree with the trial court’s rationale — that the phrasing in Paragraph 4(b)

lends itself to an interpretation that “any extension thereof” means only the

extensions specifically set forth in the 1966 Penney Sublease. Instead, the

phrases emphasized by the court — “under the Penney Lease” — merely lack

                                    - 13 -
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the additional language, “and any extensions thereof,” that is present in

Paragraph 4(a).      This dissimilarity, alone, does not support this particular

finding by the trial court.

       Instead, as the phrase, “any extension thereof,” is not defined in the

Owner Agreement, we agree with Penney that we must construe these “words

in accordance with their natural, plain, and ordinary meaning.” See State

Farm, 54 A.3d at 928. We further agree the unambiguous, plain, ordinary

meaning of “any” connotes no limitations. See Penney’s Brief at 35-38 (citing

Merriam-Webster and www.dictionary.com definitions of the word “any”).

       Furthermore,      we   observe     the   “1966   Penney   Sublease”   is   not

synonymous with its 25-year base term. In other words, the terms of the

1966 Penney Sublease, when read as a whole, provide not only for the initial

sublease term, but also the specified extensions.          Thus, we interpret the

extended phrase in the Owner Agreement, “the term of the Penney Lease and

any extension thereto,” to mean: (1) the 25-year initial term, the store

expansion-triggered 15-year extension, and the four optional five-year

extensions; and (2) any additional extensions properly entered into between

Penney and Crown.8 For the foregoing reasons, we conclude Owner would be

____________________________________________

8 Because we conclude the phrase, “any extension thereof” is unambiguous,
we limit our review to the writing itself, and need not reach Penney’s additional
arguments that the trial court’s interpretation undermines the purpose of the
Owner Agreement. See Penney’s Brief at 33. We likewise do not review the
(Footnote Continued Next Page)

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bound to recognize any properly-entered “extension.” We thus now review

the trial court’s finding that the 2003 Penney Sublease was not, however, an

“extension” of the 1966 sublease.

                   VI. Effect of the 2003 Penney Sublease

       In its third issue, Penney asserts the trial court erred in finding the 2003

Penney Sublease was not an extension, amendment, or modification, to/of the

1966 Penney Sublease, but instead an entirely new lease. Penney’s Brief at

64. Penney maintains that parties may always modify a written contract, and

here, given the length of time it has continuously operated a store at the mall,

“[i]t is not surprising . . . that Penney and Crown amended the Penney Lease

at various times[.]”       Id. at 66.     Nevertheless, Penney avers, “[m]ultiple

sections of the original Penney Lease remained unchanged by the 2003”

agreement, including

       the sections titled: Alterations, Condemnation, Continued
       Possession by Tenant, Covenant of Title, Authority and Quiet
       Possession, Damage Clause, Default Clause, Lease Binding on
       Heirs, Other Tenancies, Premises, Pylon Signs, Repairs,
       Restrictions Affecting Tenant, Signs, Subletting and Assigning,
       Subordination, and Use Of Premises.

Id. at 66-67 (quotation marks omitted). Penney alleges the trial court also

failed to consider Section 17 of the 2003 Penney Sublease, which provided

____________________________________________

trial court’s finding that Owner did not intend to bind itself to future
agreements not yet executed by Penney and Crown. See Trial Ct. Op. at 9.

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that “all of the provisions of the original Penney Lease not amended by the

2003 [lease] remained in full force and effect.” Id. at 68. We disagree.

       As stated above, the trial court found the 2003 Penney Sublease

significantly altered numerous material terms — including the length of the

base term, the number of optional extensions, the timing and terms of

renewal, and the rent calculation scheme.9 Trial Ct. Op. at 11. Penney does

not dispute this rationale, notwithstanding its listing of other terms that

remained unchanged. While Penney correctly points that “parties may always

modify a written contract previously entered into,” see Consol. Tile & Slate

Co. v. Fox, 189 A.2d 228, 230 (Pa. 1963), it does not cite, and we have not

discovered, authority addressing to what extent modifications of a lease may

____________________________________________

9 The trial court also cited McIntyre Square Assocs. v. Evans, 827 A.2d 446
(Pa. Super. 2003) (McIntyre Square), summarizing only that in that
decision, this Court held “a lease term extension created a material risk which
could not be imputed [to] a non-signatory third-party regardless of waiver
[sic].” Trial Ct. Op. at 12. Owner explains McIntyre Square addressed a
surety agreement, and contends it is applicable to this matter because “[t]he
guarantees extended by [Owner] to Penney in the Owner Agreement were
akin to that of a surety.” Owner’s Brief at 21.

      We disagree with this comparison. The McIntyre Square Court
explained a surety agreement is an agreement to be liable for the debt of
another, where “the creditor may look to the surety for immediate payment
upon [a] default, without first attempting to collect the debt from the
debtor[.]” McIntyre Square, 827 A.2d at 451 n.7. Owner’s obligations
under the Owner Agreement and, potentially, Penney’s sublease, had nothing
to do with assuming Penney’s debts. Instead, Owner and Penney would have
an entirely different relationship — that of landlord and tenant. Accordingly,
McIntyre Square is not relevant to this appeal.

                                          - 16 -
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be made before the new instrument is no longer in the nature of an

“extension,” but rather a new instrument that replaces the former.

      Nevertheless, we find no error in the trial court’s reasoning.   Again,

Penney does not dispute that the 2003 Penney Sublease altered material

terms, including the base length of the lease, the number of optional

extensions, the timing and terms of renewal, and the method for calculating

rent. See Trial Ct. Op. at 11. We emphasize these terms vastly differ from

the nature of the extensions set forth in the 1966 Penney Sublease. Under

that agreement, Penney would simply extend all of the very same terms for

an additional period of time.   The 2003 Penney Sublease did not similarly

provide the parties would continue to observe the same terms; indeed, the

length of the base term was extended. Accordingly, we agree with the trial

court that the 2003 Penney Sublease was not an “extension” as contemplated

in Paragraph 4(a) of the Owner Agreement. On this basis, we agree with the

court the Owner Agreement no longer binds Owner to assume Crown’s

responsibilities under the 1966 Penney Sublease and to recognize Penney’s

sublease rights.

                    VII. Penney’s Remaining Claims

      We may quickly dispose of Penney’s remaining arguments, which are as

follows.   First, the trial court erred in stating the Owner Agreement

incorporated the 1966 Penney Lease, and accordingly relying on a paragraph,

on Page 18(a) of the 1966 Penney Lease. Penney’s Brief at 48-49. We note

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the trial court reasoned that the language of this paragraph — which “limit[ed]

the Owner Agreement’s guarantee to ‘optional extensions thereto” —

supported its finding that “any extension thereof” means only the extensions

set forth in the 1966 Penney Sublease. Trial Ct. Op. at 7. On appeal, Penney

denies the Owner Agreement “incorporated” the 1966 Penney Subease, and

thus the trial court erred in considering any language it. Penney’s Brief at 49.

      In its final issue, Penney avers the trial court erred in determining that

even if the Owner Agreement applied to extensions made outside the 1966

Penney Sublease, only the 1966 lease terms would apply (and not any 2003

sublease terms).   Penney’s Brief at 69-71.     In support, Penney reiterates

Owner consented to and approved of the 1966 Penney Sublease, which in turn

permitted Penney and Crown to amend the lease without notice to or consent

from Owner. Reading these provisions together, Penney concludes, contrary

to the trial court’s determination, that Owner is bound by the 2003 sublease

terms.

      In light of our above disposition — that Owner is not bound to honor or

recognize Penney’s rights under the 1966 Penney Sublease — we conclude

Penney’s remaining arguments are moot. Accordingly, no relief is due.

                              VIII. Conclusion

      In sum, we do not disturb the trial court’s conclusions that: (1) there

presently exists no contractual relationship between Penney and Owner; and

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thus (2) Penney is a tenant at will.     We affirm the order disposing of the

parties’ cross-declaratory actions.

      Order affirmed.

      Judge Nichols joins this Memorandum.

      Judge Kunselman files a Dissenting Memorandum.

Judgment Entered.

Joseph D. Seletyn, Esq.
Prothonotary

Date: 6/23/2023

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