HARRISBURG – The Superior Court has vacated a $100,000 judgment against the Borough of Montrose in a lawsuit with a property owner.
Judge Carolyn Nichols, sitting on the bench of the Superior Court, issued a 29-page ruling on Aug. 13, vacating judgment and denying post-trial motions in the lawsuit filed by Alice Davis against the Borough, located in Susquehanna County.
Davis sued the Borough on Feb. 12, 2014, at the Court of Common Pleas of Susquehanna County, seeking damages calculated at $99,989.81, resulting from a breach of contract in a lease agreement.
Montrose Borough
| Montrose Restoration Committee
As described in the ruling, on Dec. 21, 2012, Davis and the Borough "entered into a lease agreement for property located at 4 Mill Street in the Borough of Montrose, Susquehanna County," owned by Davis, with the lease being for "a five-year term and provided that Borough pay $59,940 annual rent, payable in monthly installments of $4,995."
The Borough was also responsible "to pay all real estate taxes, all insurance on the premises, utilities, and any and all maintenance, upkeep, and repairs."
Davis mentioned in the ruling that although "other than several members of Borough Council doing a 'walk through' prior to signing the lease," Davis "did not conduct any inspections of the property." The Borough took the keys on Jan. 1, 2013, "but never used the building for any purpose."
Two months later, on March 2013, the Borough tested the building "and found mold," according to court documents. In June of the same year, per the ruling, the swimming pool at the building was drained, and in July and August, the property was retested, and "mold was again found to be present."
In November 2013, after attempts to remove the mold, the Borough told Davis that "it was terminating the lease as of December 31, 2013 due to the presence of mold in the building," according to court documents.
Davis then hired a professional company for mold remediation, as well as "repairs and alterations" to the property. A realtor was contacted in January 2014, for placement of the building on the rental market. A new lease was signed in September 2014, "with a rental price of $3,995 per month," the ruling said.
On Feb. 12, 2014, however, Davis sued the Borough for "for breach of the lease agreement," with the defendant stating that "it included as new matter the defense of impossibility of performance and asserted that Landlord fraudulently represented there was no mold in the building prior to entering into the lease."
The lower court awarded the damages on April 28, 2017, with motions filed later from both parties. They filed motions for judgment non obstante veredicto, due to exclusions of witnesses the lack of information about the mold removal to the Borough, and the damages calculated.
Both motions were denied on July 5, 2017.
When analyzing the witness exclusion, Judge Nichols stated in her ruling that "an abuse of discretion may not be found merely because an appellate court might have reached a different conclusion, but requires a manifest unreasonableness, or partiality, prejudice, bias, or ill-will, or such lack of support as to be clearly erroneous.”
In regards to the lack of information on the mold remediation, Nichols emphasized that the Borough did not cite any relevant authorities to justify Davis' actions.
"Borough, however, includes absolutely no citation to relevant case law or rules in support of its position that Landlord was under a duty to notify Borough that the remediation had been successfully completed," the ruling said.
On the damages' issue, Nichols considered that "the trial court erred as a matter of law when, in its calculation of damages," decreasing "the amount of damages Landlord was entitled to by applying the amount she could have made had she, in fact, actually relet the premises," and citing "no legal authority for doing so."
Superior Court of Pennsylvania Case number 1250 MDA 2017