The Pennsylvania Supreme Court issued its much anticipated opinion on Friday, September 28, 2012, in Newman Dev. Group of Pottstown, LLC v. Genuardi's Family Markets, Inc., No. 101 MAP 2011, 2012 Pa. LEXIS 2262 (Pa. Sept. 28, 2012) (Newman II), involving the interpretation of Pennsylvania Rule of Civil Procedure 227.1, which requires post-trial motions to be filed within 10 days after certain events. The specific issue before the Supreme Court was whether a party must file post-trial motions following a decision on remand.
Newman Development Group of Pottstown, LLC (Newman) and Genuardi's Family Markets, Inc. (Genuardi's) entered into a lease agreement whereby Genuardi's agreed to lease space in a shopping center to be constructed by Newman. Id. at *3. Subsequently, Genuardi's terminated the lease due to Newman's alleged noncompliance with various completion dates set forth in the lease. Newman filed suit against Genuardi's, alleging an anticipatory breach of the lease agreement and asserting claims in equity for quantum meruit and promissory estoppel based on the assertion that Genuardi's had no right to terminate the lease agreement. Id. at *6. Following a 10-day, non-jury trial in the Court of Common Pleas of Chester County, the trial court found that Genuardi's had breached the lease agreement and that Newman was entitled to rent from Genuardi's for a period of six months, from June 25, 2005 until December 28, 2005. Id. at *7. The total damages awarded were $131,277, which represented the difference between the amount of rent owed by Genuardi's and the amount of rent Newman received from replacement tenants. Id.
Both parties filed post-trial motions. Newman claimed that the trial court erred in calculating damages for a six month period and argued that damages should be awarded on the entire 20-year term of the lease, as required by the lease. Id. at *8. The trial court denied the motion; however, it determined it had miscalculated the rental loss because the replacement tenants did not start paying rent until December 1, 2005. An amended verdict in the amount of $316,889.92 was entered. Id. Newman appealed to the Pennsylvania Superior Court. The Superior Court reversed, held that the trial court erred in failing to award damages for the entire 20-month lease agreement as required by the lease, and remanded "for proceedings consistent with its memorandum opinion." Id. at *10. On remand, the parties submitted legal memoranda and presented oral argument, but did not provide any additional evidence on damages. The trial court recalculated damages in accordance with the lease agreement and entered judgment in the favor of Newman in the amount of $18,489,221.60. Id. at *11-*12.
Genuardi's appealed the new judgment to the Superior Court, without filing post-trial motions. Newman filed a motion to quash, arguing that because Genuardi's failed to file post-trial motions to the recalculated damages award, it had waived any arguments on appeal. Genuardi's responded that the language of Rule 227.1 was silent as to whether post-trial motions were required upon remand where no additional evidence is received. The Superior Court rejected Genuardi's position and quashed the appeal. Id. at *12; see also Newman Dev. Group of Pottstown, LLC v. Genuardi's Family Markets, Inc., 18 A.3d 1182 (Pa. Super. 2011) (Newman I). In doing so, the Superior Court remarked that the purpose of post-trial motions was to give the trial court an opportunity to correct errors to avert appellate review and that such purpose would be "improperly subverted" if the filing of post-trial motions was excused in this case. Id. at *13 (citing Newman I, 18 A.3d at 1188). The Superior Court relied on Cerniga v. Mon Valley Speed Boat Club, 862 A.2d 1272 (Pa. Super. 2004), a case also involving a failure to file post-trial motions following remand. In Cerniga, however, the trial court made additional findings of fact on remand. Nonetheless, the Superior Court found Cerniga relevant and quashed Genuardi's appeal.
Genuardi's sought review from the Supreme Court of Pennsylvania. The Pennsylvania Supreme Court granted review limited to the question of whether the "Superior Court err[ed] in quashing Genuardi's appeal for failure to file a post-trial motion, where the appeal was from the trial court's recalculation of damages in accordance with the Superior Court remand order and where no additional evidence was received." Newman II, 2012 Pa. LEXIS 2262, at *15.
After extensively reciting the arguments of both parties and three briefs submitted by amici curiae in support of Genuardi's position, the Supreme Court started its analysis with the "relevant, plain terms of Rule 227.1." Id. at *35. Rule 227.1(c) provides, in relevant part, that post-trial motions "shall be filed within ten days after...the filing of the decision in the case of a trial without jury." Id. at *36 (citing Pa. R. Civ. P. 227.1(c)). The court noted that there was no dispute that post-trial motions must be filed at the conclusion of a non-jury trial, but acknowledged, however, that the rule was silent as to an appellate remand proceeding. Id. at *37.
The court also looked to the Official Note to Rule 227.1(c) that excuses the filing of post-trial motions in various circumstances, including "other proceedings which do not constitute a trial." Id. at *16 (citing Pa. R. Civ. P. 227.1(c), Official Note). The Supreme Court recognized that remand proceedings are varied and may include the submission of additional evidence, the resolution of disputed factual positions, or other scenarios that fall short of a full-blown trial. Id. at *38. The court acknowledged that the plain language of Rule 227.1 does not account for these situations and that the note to the rule focused on "trials." Id. The court also looked to existing case law, including Cerniga, and found that none of the cases made it clear that post-trial motions were required following a remand where no additional evidence is presented.
In light of the language of Rule 227.1 and the Official Note, the Supreme Court found that the Superior Court's decision to quash Genuardi's appeal was "at odds with the reasonable expectations of practicing attorneys who would read the rule and attempt to discern the scope of the post-trial motion requirement." Id. at *41. The Supreme Court held that "the proper interpretation of the Rule is that it does not purport to address the remand scenario, and thus a party cannot be faulted — upon pain of waiver — for failing to file post-trial motions to a proceeding upon remand which amounts to less than an actual trial." Id. at *51. Having ruled the Superior Court erred in quashing the appeal, the Supreme Court remanded the case to the Superior Court for consideration of the merits of Genuardi's appeal.
The Supreme Court's ruling is a significant clarification of Rule 227.1, which had been in a state of confusion since the Superior Court's ruling on the case. The opinion is also significant given the Supreme Court's reliance and extensive citation to the three "helpful" briefs submitted by amici curiae. Id. at *34. Thomas G. Wilkinson, Jr. and Sara Anderson Frey of the Commercial Litigation Department drafted an amicus brief on behalf of the Pennsylvania, Philadelphia, and Allegheny County Bar Associations. In addition to citing to their brief, the Supreme Court accepted their recommendation that the issue should be referred to the Civil Procedural Rules Committee.
www.cozen.comThe content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.