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Movement Workshop, Inc. v. FFT Properties, Inc.

Court of Common Pleas of Delaware, New Castle

January 22, 2018

THE MOVEMENT WORKSHOP, INC. and SUSAN THOMAS, Appellants/Defendants,
v.
FFT PROPERTIES, INC., Appellee/Plaintiff.

          Submitted: December 15, 2017

          Anthony A. Figliola, Jr., Esq. Attorney for Appellee

          James W. Owen, Esq. Greto Law James W. Owen, P.A. Attorney for Appellant

          MEMORANDUM OPINION & ORDER

          JOHN K. WELCH, JUDGE

         This case concerns the interpretation of a commercial lease agreement. On January 13, 2017, Appellants/Defendants The Movement Workshop, Inc. ("TMW Inc.") and Susan Thomas ("Ms. Thomas"), owner/president of TMW Inc., (collectively "Tenant") filed a Notice of Appeal from a Justice of the Peace Court ("JP Court") decision.[1] The JP Court's December 30, 2016 decision found in favor of Appellee/Plaintiff FFT Properties, Inc. (the "Landlord"), awarding $6, 368.68 plus 12% post-judgment interest per annum.[2]

         On November 14, 2017, trial was convened in the Court of Common Pleas and this Court reserved its decision. The Court ordered cross-supplemental briefing, which was completed on December 15, 2017. This is the Court's Final Memorandum Opinion and Order after consideration of the oral and documentary evidence submitted at trial, arguments made at trial, supplemental briefing, and the applicable law. For the reasons discussed below, the Court finds in partial favor of the Landlord.

         I. FACTUAL HISTORY

         Based on the testimony and evidence presented at trial, the Court finds the relevant facts to be as follows.

         In 2008, the Landlord acquired 408 Philadelphia Pike, Wilmington, Delaware 19809 (the "Property"). The Property is a commercial rental space comprised of Suites A and B.[3] On August 20, 2013, Tenant signed a lease agreement for Suite B.[4] Ms. Thomas also signed a personal guaranty of the lease ("Guaranty") on the same day.[5] The terms of the lease were for five (5) years, spanning from September 1, 2013 to August 31, 2018.[6] The first monthly rental payment of $2, 000 was not due until December 1, 2013.[7]

         When Tenant first entered into the lease agreement, Suite B consisted of two large units divided by a partitioning concrete wall (the "Wall").[8] The Wall failed to extend the length of the room and contained apertures comparable to large window openings.[9] Suite B also contained a water heater in each unit; however, only one heater was functional.[10] In July 2013, prior to the beginning of the lease term, the Landlord expressly allowed Tenant to prepare Suite B for its business needs. Tenant hired John A. Verbanc ("Mr. Verbanc"), a contractor she had employed for approximately thirty (30) years, to: (1) remove counter, cabinets, rug, plywood floor, and floor joists in Studio B, (2) frame the Wall to accept 1/2" drywall, and (3) add framework to the opening at the end of the Wall to accept a door.[11] Mr. Verbanc testified that he investigated Suite B prior to beginning the remodeling, but did not investigate the heating system.[12] He testified that he was an unlicensed home improvement contractor when he performed this remodeling on July 25, 2013. He did not acquire a permit prior to remodeling Suite B because he did not consider his alterations "structural."[13]

         After completion of the remodel, Tenant complained to the Landlord multiple times regarding the frigid temperature that persisted on one side of Studio B. While the Landlord hired an individual to inspect the inoperable heater in Studio B, the Landlord ultimately decided against repairing the inoperable heater.[14] Instead, ductwork was fashioned to draw heat from the operational heater to the cold partition of Suite B.[15] This innovation failed to cure the temperature problem.

         Beginning in July 2015, the parties' relationship began to deteriorate.[16] In November 2015, Tenant complained to New Castle County (" N.C. C.") about the frigid character of Suite B during morning and afternoon dance classes.[17] On November 23, 2015, Officer Frank Walsh ("Officer Walsh"), from the Department of Land Use Office of Code Enforcement ("Enforcement Office"), inspected Suite B for violations of the N.C. C. Property Maintenance Code and Building Code.[18]Officer Walsh cited the Landlord for failure to properly maintain a water heating appliance in safe working condition, in violation of N.C. C. Property Maintenance Code 603.1; failure to have an operable heating unit in each subdivision of Suite B, in violation of N.C. C. Property Maintenance Code 602.3; and failure to acquire a permit, in violation of N.C. C. Building Code 6.03.012(A).[19] The Landlord was advised to "[discontinue work, obtain valid permit, and pay required double permit fee" as well as hire a N.C. C. licensed Heating, Ventilation, and Air Conditioning ("HVAC") contractor for required service and/or to replace the heating system.[20] The Landlord was also advised that he could request an extension to complete these requirements if needed.[21] Officer Walsh later changed his 602.3 citation to N.C. C. Property Maintenance Code 602.4, as 602.3 is not applicable to commercial rental space.[22]

         On January 6, 2016, the Enforcement Office notified both parties that a "Pre-Deprivation Hearing" would occur on January 27, 2016.[23] The hearing was conducted on January 27, 2016 and an Administrative Hearing Officer from the Enforcement Office ("Officer") reserved decision.[24] On February 2, 2016, the Officer rendered a decision and found the Landlord liable.[25]The Officer's directives to the Landlord were to obtain the proper permits, acquire a "Certification of Completion for the required hot water heater installation" and "[r]eceive a Certificate of Completion for the wall and HVAC permit(s) before the expiration of said permit(s) or [r]emove the wall in its entirety no later than March 1, 2016."[26]

         On February 22, 2016, the Landlord emailed Tenant asking what it wanted "to do about the wall."[27] The Landlord informed Tenant that it needed a "quick" response and if it failed to "participate in the process, " then it would proceed without Tenant's input.[28] On February 23, 2016, the Landlord requested an extension of time from the Enforcement Office to complete the Officer's directives.[29] The Landlord noted in its request that Tenant had asked the county to rescind the violation.[30] On February 25, 2016, Tenant informed the Landlord that it "need[ed]" the Wall.[31] The Landlord hired R.W. Greer, Inc. to perform the removal of the inoperable heater and installation of a new heater.[32] The Landlord paid R.W. Greer, Inc. $3, 850.00 to complete this project.[33]

         On March 15, 2016, the Landlord was also required to pay The Glass Guy, LLC $450.00 to replace a paned glass window section in the Property's storefront.[34] It is unclear when, or how, this glass shattered.

         II. STANDARD OF REVIEW

         As trier of fact, the Court is the sole judge of the credibility of each fact witness and any other documents submitted to the Court for consideration.[35] If the Court finds that the evidence presented at trial conflicts, then it is the Court's duty to reconcile these conflicts-if reasonably possible-in order to find congruity.[36] If the Court is unable to harmonize the conflicting testimony, then the Court must determine which portions of the testimony deserve more weight in its final judgment.[37] In ruling, the Court may consider the witnesses' demeanor, the fairness and descriptiveness of their testimony, their ability to personally witness or know the facts about which they testify, and any biases or interests they may have concerning the nature of the case.[38]

         In civil actions, the burden of proof is by a preponderance of the evidence.[39] "The side on which the greater weight of the evidence is found is the side on which the preponderance of the evidence exists."[40]

         III. DISCUSSION

         This case understandably devolved into a contentious dispute as it involves a rift between occupational pursuits. Nevertheless, the dispute has enveloped concerns that are not pertinent to this Court's present adjudication. As such, the Court will briefly address and dismiss these concerns.

         First, the parties spent considerable time at trial referencing the Officer's decision. Yet, neither party has cited case law to support even the minimal assertion that the Officer's decision is persuasive authority. Because this matter is plainly not an administrative appeal before the Delaware Superior Court, where administrative findings are granted deference, this Court views the decision as irrelevant to its adjudication.[41] This Court recites the administrative procedures above merely to provide background to the present dispute. Thus, Tenant's express belief that the Officer's findings are particularly controlling here is misplaced; and, accordingly, these findings were not considered in this analysis.[42]

         Second, the Landlord's focus on Tenant hiring an unlicensed contractor-who failed to acquire a permit prior to remodeling Suite B-is similarly misplaced. Certainly, the lease agreement requires Tenant to abide by the county code;[43] however, a violation of a regulation is not automatically a material breach.[44] In fact, the violation here is not even material since it does not concern the " 'root' " of the contract.[45] For these reasons, the assertion that Tenant's ill-advised employment of Mr. Verbanc absolves the Landlord in this case is a non sequitur.

         Third, ancillary disputes regarding rental payments or termination of the lease between the parties are not material to the present adjudication. There are no claims regarding rental payments. Germane to the present case is: (A) whether the Landlord or Tenant is responsible to replace the broken paned glass window in Suite B, and (B) whether the Landlord or Tenant is responsible to pay for the replacement of the inoperable heater in Suite B. Because this is a commercial lease agreement, general contract principles apply in this dispute rather than the Residential Landlord-Tenant Code.[46] The Delaware Supreme Court has stated:

According to such principles, contracts must be construed as a whole, to give effect to the intentions of the parties. Where the language of the contract is clear and unambiguous, the parties' intent is ascertained by giving the language its ordinary and usual meaning. A contract is ambiguous only when its provisions are reasonably or fairly susceptible of different interpretations or may have two or more different meanings.[47]

         Importantly, a "contract is not rendered ambiguous merely because the parties disagree on the proper construction."[48]

         The relevant language of the lease agreement is unambiguous. The lease agreement states:

         Services

4. The parties agree that each shall, subject to the further provisions hereof, furnish and pay for the services and items assigned to them below, in addition to the ...

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