Frank Kosir Jr. of Meyer Unkovic & Scott.

The following are recent Pennsylvania appellate court cases of note.

Statute of Limitations and Rent Collections

In Tsung Tsin Association v. Luen Fong Produce, (2019), the Pennsylvania Superior Court was asked to address the issue of whether the statute of limitations applies where a landlord attempts to collect past due rents in a still-operative commercial lease.

In 1995, Tsung Tsin Association (landlord) entered into a commercial lease (lease) with Luen Fong Produce (tenant.) The lease was renewed and extended several times thereafter, with the last renewal occurring in 2003. In 2015, the landlord brought suit against the tenant in the Philadelphia Court of Common Pleas for rents owed dating back to 2003, alleging that while the tenant had paid its base rent, it had failed to pay certain additional rents to account for increases in real estate taxes, utilities and other costs. In response, the tenant asserted that the four-year statute of limitations applied, and that the landlord could only recover amounts owed for the last four years.

The trial court agreed with the landlord and limited its recovery to all claims arising within four years of its commencement of the action. The tenant appealed, asserting that the landlord's action had to be brought within four years of the last renewal of the lease, and thus was too late.

On appeal, the Superior Court affirmed the trial court's decision. In issuing its ruling, the court noted that the Pennsylvania law plainly establishes a four-year statute of limitations for breach of contract actions. However, there is no support for the tenant's argument that the statute of limitations on a claim for commercial rent begins to run on the date that the lease is executed. In fact, such a conclusion would be unreasonable as it would in essence permit a tenant to cease paying rent four years after executing a lease.

In this case, the landlord had produced evidence that the tenant owed additional rents as far back as 2003. However, since the suit was not commenced until 2015, the four-year statute of limitation applied and, as such, the landlord was limited to collecting all amounts owed from 2011 forward.

School District's Assessment Dispute

In Punxsutawney Area School District v. Broadwing Timber, 1209 C.D. 2018 (2019), the Commonwealth Court was asked to address the issue of whether a school district's appeal of the real estate tax assessment for a parcel of real property constituted a spot appeal in violation of the uniformity clause of the Pennsylvania Constitution.

Broadwing Timber (Broadwing) is the owner of approximately 2,600 acres of land (property) situated in Jefferson County. The property is used for investment purposes with Timberland Investment Resources (Timberland), which, on Broadwing's behalf, is charged with planting and harvesting timber, and leasing the Property for recreational purposes. In 2015, the Punxsutawney Area School District appealed the real estate tax assessment for the property, asserting that the property was under-assessed.

The Jefferson County Board of Property Assessment Appeals held a hearing and, concluding that there was no basis to change the assessment, denied the appeal. On appeal, the Jefferson County Court of Common Pleas reversed the decisions, concluding the district had established that the property was under-assessed, and that the practice that the district employed in deciding which properties to file tax appeals on did not violate the uniformity clause. On appeal, the Commonwealth Court affirmed.

In issuing its ruling, the court concluded that the district had established that the process by which it chose which properties to file assessment appeals against was based upon the current assessment of that property compared to its sale price. Furthermore, this process did not take into account the type of property, where it was located or who the owner was. For these reasons, the district's process did not create a separate subclass of properties against which appeal was brought and was not in violation of the uniformity clause.

Frank Kosir Jr. is an attorney at Pittsburgh-based law firm Meyer, Unkovic & Scott. He has significant civil litigation and general practice experience in all areas of real property law. Contact him at [email protected].