O'Brien and Ryan, LLP - Attorneys at Law
Legal News

Pennsylvania Superior Court Holds that Landlord May Not Amend Complaint to Recover Full Balance of Lease if Amount Miscalculated

In TCPF Limited Partnership v. Skatell, 2009 Pa.Super. 112 (2009) the Pennsylvania Superior Court held that when a commercial landlord confesses judgment for the “entire unexpired balance of the Term of Lease”, but the landlord miscalculates the amount due and thus requests less than the full unexpired balance, the landlord may not attempt to amend his complaint to recover the full amount.

A confession of judgment is an arrangement in which a debtor agrees in advance to allow judgment to be entered against him in favor of his creditor without litigation for money which the debtor owes. A warrant of attorney is the writing in which a debtor allows his attorney to confess judgment on his behalf.

In Skatell, two officers of an incorporated entity which owned a Quiznos sandwich shop signed an individual guaranty in which they pledged the full and prompt payment of all rent. As the Court opinion states, “The guaranty contained a warrant of attorney and confession of judgment provision enabling” the landlord “to bring an action to confess judgment against Altmiller and Skatell for all or any sums due.” Furthermore, the guaranty “contained language allowing for the successive exercises of the warrant of attorney until all obligations of Altmiller and Skatell under the lease had been discharged.” In June 2006, the entity that owned the sandwich shop defaulted on its obligations under the lease.

The landlord invoked the right to accelerate the rent and other charges for the entire unexpired balance of the term of the lease and calculated that amount as $65,196.21. The landlord then sought confession of judgment of that amount and the trial court entered confession of judgment. Shortly after this entry of judgment, the landlord “discovered that it had calculated only a portion of the unexpired balance of the term of the lease, from June of 2006 through September of 2007, and not the entire lease term.” In August of 2007, the Landlord requested to amend his complaint in confession of judgment to increase the amount of judgment to $203,420.45, which represented the entire unexpired balance of the term of the lease from June of 2006 through September of 2010. On October 25, 2007, the trial court denied this request.

On appeal, the Landlord argued that Pennsylvania Rule of Civil Procedure 1033 allows for liberal amendments to pleadings. The Superior Court held, however, that under PA case law “an amendment will not be permitted where it is against a positive rule of law.” Capobianchi v. BIC Corp., 446 Pa.Super. 130, 666 A.2d 344, 346 (1995). The positive rule of law the court found here was in B. Lipsitz Co. v. Walker, 361 Pa.Super. 238, 522 A.2d 562, 566 (1987), appeal granted, 515 Pa. 617, 531 A.2d 426 (1987). The Court in that case held that “severable portions of a debt can be sought to be collected with the use of a single warrant of attorney as each become[s] due; provided, of course, the instrument is not used to collect the same portion of the debt already confessed.” The Court therefore did not interpret the portion of the individual guaranty mentioned above “allowing for the successive exercises of the warrant of attorney until all obligations of Altmiller and Skatell under the lease had been discharged” in favor of the landlord where the landlord sought to confess judgment a second time for the same debt. The Court also cited Pennsylvania Rule of Civil Procedure 2953 and 2953(a) in demonstrating that the successive exercises of the warrant of attorney must be for separate sums.


<< Back to list page
Contact
Hickory Pointe
2250 Hickory Rd, Suite 300
Plymouth Meeting, PA 19462
Phone: (610) 834-8800
Fax:(610) 834-1749
info@obrlaw.com