Trizechahn Gateway, LLC v. Paul H. Titus, et al.

Appellants, Paul Titus, James H. McConomy, Lindsey D. Alton, Thomas
D. Arbogast, S. Link Christin, Martin J. Hagan, David B. Mulvihill, David G.
Oberdick, Manning J. O'Connor II, Adrian N. Roe, Mark Stadler, Thomas C.
Wettach, and Titus & McConomy LLP a/k/a Titus & McConomy, a
Pennsylvania general partnership and law firm formerly composed of
appellants and others, appeal from the $3,274,037.79 judgment entered
after the trial court concluded they had breached their lease with Trizechahn
Gateway LLC (Trizechahn).

2 Trizechahn cross-appeals from the trial court's December 16, 2002,
Order granting summary judgment in favor of cross-appellees Donald T.
Dulac, Jr., and Charles B. Watkins; the trial court's January 27, 2003, Order
granting summary judgment in favor of cross-appellee Henry R. Johnson III;
the trial court's January 29, 2003, grant of summary judgment in favor of
cross-appellee Suzanne L. DeWalt; and the trial court's June 30, 2004,
granting of summary judgment to cross-appellees Thomas M. Hardiman,
Debra M. Parrish, and Stephen R. Kaufman

Relevant Background

3 In 1995, a third-party landlord and Titus & McConomy LLP (T&M)
began negotiating a lease agreement for occupation of the entire 20th floor,
part of the 21st floor, and basement storage space in Four Gateway Center,
located in downtown Pittsburgh. Shortly after negotiations began, the thirdparty
landlord sold Four Gateway Center to Trizechahn. After further
negotiations, T&M and Trizechahn reached an agreement and, subsequently,
executed the ten-year lease agreement (master lease) that is the principal
subject of this case.2 The lease term ran from October 1, 1995, until June 30, 2005. Record, No. 187, Exhibit List, No. 1, p.1. In June of 1998, the
parties entered into a second lease (storage lease) for an additional storage
space in the basement of Four Gateway Center. Id. at No. 2. The term of
this lease ran from June 15, 1998, until June 30, 2005. Id.

4 In August of 1999, T&M decided to liquidate and wrap up its affairs.
On August 18th of that year, appellant Titus sent a letter to Trizechahn's
general manager notifying Trizechahn of the impending dissolution and
offering to work towards subletting the master lease premises. Record, No.
183, Exhibit List, No. 7. A formal plan of liquidation was executed on that
same date. Record, No. 187, Exhibit List, No. 59. Shortly thereafter, T&M
vacated the master lease premises, but left behind files in the basement
storage spaces and office fixtures in the office space. Trial Court Opinion,
Friedman, J., 3/30/05, at 2. In the event of abandonment, the master lease
provided as follows:

15. LANDLORD'S REMEDIES
. . .

(d) If the Tenant abandons the Premises or
the Landlord otherwise becomes entitled so to elect, and the Landlord elects, without terminating the
lease, to endeavor to relet the Premises, the
Landlord may, at the Landlord's option enter into
the Premises, remove the Tenant's signs and other
evidence of tenancy, and take and hold possession
thereof as in Paragraph (c) of this Section provided,
without such entry and possession terminating the
lease or releasing the Tenant, in whole or in part,
from the Tenant's obligation to pay the Rent
hereunder for the full term as hereinafter provided.
Upon and after entry into possession without
termination of the lease, the Landlord may relet the
Premises or any part thereof for the account of the
Tenant to any person, firm or corporation other
than the Tenant for such rent, for such time and
upon such terms as the Landlord shall determine to
be reasonable. In any such case, the Landlord may
make repairs, alterations and additions in or to the
Premises, and redecorate the same to the extent
deemed by the Landlord necessary or desirable, and
the Tenant shall, upon demand, pay the cost
thereof, together with the Landlord's expenses of
the reletting. If the consideration collected by the
Landlord upon any such reletting for the Tenant's
account is not sufficient to pay monthly the full
amount of the Rent reserved in this lease, together
with the cost of repairs, alterations, additions,
redecorating and the Landlord's expenses, the
Tenant shall pay to the Landlord the amount of
each monthly deficiency upon demand.

Record, No. 187, Exhibit List, No. 1, p. 9.

5 Trizechahn immediately entered into negotiations with respective subtenants
after T&M abandoned the premises. The trial court found that T&M
continued to pay rent through January of 2000 when all rental payments
ceased. Id. Over five years remained on the lease term at the time of
default. In that regard, the master lease provided as follows:

15. LANDLORD'S REMEDIES

(b) If the Tenant defaults in the payment of Rent
and such default continues for ten (10) days after
notice, or defaults in the prompt and full
performance of any other provision in this lease and
such default continues for thirty (30) days after
notice, or if the leasehold interest of the Tenant be
levied upon under execution or be attached by
process of law, or if the Tenant abandons the
Premises, then and in any such event the Landlord
may, at its election, either terminate the lease and
the Tenant's right to possession of the Premises or,
without terminating this lease, endeavor to relet the
Premises. Nothing herein shall be construed so as
to relieve the Tenant of any obligation, including the
payment of Rent, as provided in this lease.

Record, No. 187, Exhibit List, No. 1, p.9.

6 On February 29, 2000, Trizechahn sent a letter to T&M outlining two
termination plans into which it would be willing to enter to settle T&M's
outstanding obligations under the master lease, both of which called for T&M
to remit payments totaling less than $1 million. Record, No. 183, Exhibit
List, No. 15. The letter also indicated Trizechahn was intent on immediately
recovering, at the minimum, the portion of the master lease storage space
necessary to correct a building code violation and that, after said recovery,
T&M's rental obligation would be reduced accordingly.3 Id. T&M did not
formally respond to this letter.4
3

7 On July 14, 2000, Trizechahn sent another letter to T&M notifying it
that Trizechahn was attempting to relet the master lease storage space and
requesting T&M to remove any miscellaneous files left in that space after the
firm's abandonment. Record, No. 183, Exhibit List, No. 23. Four days later,
appellant Titus replied by readily agreeing to remove the files and by
requesting permission to enter the 20th floor space to remove additional
files. Record, No. 187, Exhibit List, No. 50

8 On July 28, 2000, allegedly having not yet received rental payments
for March through July of 2000, Trizechahn filed a written complaint seeking
all sums still due under the lease. Record, No. 1. The complaint
subsequently was amended twice to add additional parties and a third time
to raise a claim for re-letting and alteration expenses. Record, Nos. 18, 25,
75.

9 By August 3, 2000, T&M had vacated the storage lease space pursuant
to Trizechahn's decision to terminate. Record, No. 187, Exhibit List, No. 52. Trizechahn then utilized a portion of the recovered master lease storage
space and storage lease space to construct an egress from the basement of
Four Gateway Center for the benefit of a new tenant. Trial Court Opinion at
12.

10 On March 18, 2001, Trizechahn re-let the 21st floor space under the
master lease to Copperweld Corporation. Record, No. 187, Exhibit List, No.
8. Copperweld did not take possession of the 21st floor space, however,
until March 1, 2003, and, pursuant to the terms of its lease with Trizechahn,
did not begin paying rent until that time. Trial Court Opinion at 6.
Copperweld took the space "as is," and Trizechahn did not, therefore, incur
any expenses for re-letting this portion of the premises. Id.

11 By lease dated January 17, 2003, Trizechahn re-let the 20th floor space
to DMJM + Harris, Inc. (DMJM). Record, No. 187, Exhibit List, No. 9. The
term of the lease commenced on March 1, 2003, with the first six months of
the lease term being rent free. Id. In re-letting the 20th floor space,
Trizechahn incurred a total of $574,216.965 for repairs, alterations,
additions, and redecorating of the space. Trial Court Opinion at 7.

12 On June 28, 2004, after the trial court had issued a series of Orders
granting summary judgment to cross-appellees Dulac, Watkins, Johnson,
DeWalt, Hardiman, Parrish, and Kaufmann, the trial court issued an Opinion
outlining its rationale for dismissing these parties. Trial Court Opinion,
Friedman, J., 6/28/04, at 4-6.

13 On June 27, 2005, the trial court entered the Order subject of this
appeal. A few days later, all of the defendants filed a joint motion for posttrial
relief seeking, in relevant part, a modification of the amount of damages
awarded. Record, No. 135. The trial court denied the motion in part by
Order of May 30, 2006, but also granted the motion in part by reducing the
interest award. Record, No. 148. The court entered an additional Order on
June 6, 2006, amending its prior Order by accurately outlining which
defendants were to be held individually liable.

14 Appellants responded by perfecting this timely appeal.5 Trizechahn
then perfected its timely cross-appeal. The trial court ordered both
appellants and Trizechahn to file statements of matters complained of on
appeal. See Pa.R.A.P. 1925, Opinion in Support of Order, (b) Direction
to file statement of matters complained of. Thereafter, the trial court
issued an Opinion which referred the disposition of the various issues raised
back to a prior Memorandum issued by the court on May 30, 2005. Record,
No. 181.

15 Although the operative factual nucleus of the appeal and cross-appeal
is clearly intertwined, the legal issues raised by the appeal vary significantly in comparison with the legal issues raised in the cross-appeal. As such, we
will analyze the appeals and cross-appeal separately.

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