Overland Enterprise v. Gladstone Partners

950 A.2d 1015

OVERLAND ENTERPRISE, INC., c/o Kyle Knosp, Appellee v. GLADSTONE PARTNERS, LP as Successor in Interest to PCA Corporation, Appellant.

No. 339 MDA 2007.

Superior Court of Pennsylvania.

Argued February 27, 2008.

Filed June 2, 2008.

Jonathan A. Lang, Drums, for appellant.

James R. Scallion, Drums, for appellee.

BEFORE: FORD ELLIOTT, P.J., DONOHUE, and POPOVICH, JJ.

OPINION BY POPOVICH, J.:

¶ 1 Gladstone Partners, successor to PCA Corporation, (Gladstone), appeals the order entered on February 7, 2007, in the Court of Common Pleas of Luzerne County, that enjoined it from exercising possession over real estate which it obtained via judgment against its former lessee, Overland Enterprise, Inc., c/o Kyle Knosp. Upon review, we reverse.

¶ 2 The relevant facts and procedural history of this case are as follows: On June 30, 2006, Gladstone, lessor of a commercial lease held by Overland, initiated suit against Overland in magisterial district court to obtain monies owed for back rent and to obtain possession of the leased property. The magisterial district court found in favor of Gladstone as to both damages and possession and issued a judgment in favor of Gladstone on August 4, 2006. Thereafter, Overland filed a praecipe for writ of certiorari of the magisterial district court's decision with the Luzerne County Court of Common Pleas and a petition for special relief.¹

¶ 3 Upon certiorari review, the trial court found in Overland's favor and reduced the monetary damage award to Gladstone entered by the magisterial district court. Importantly, the trial court's order did not disturb the magisterial district court's judgment of possession in favor of Gladstone. Overland did not seek reconsideration of the trial court's order, and it did not appeal the trial court's order to this Court. Instead, on November 17, 2006, Overland sought review of the magisterial district court's August 4, 2006 judgment a second time by filing an appeal de novo from the judgment to the Luzerne County Court of Common Pleas. Gladstone responded to Overland's appeal by filing a motion to strike Overland's appeal as untimely. During the pendency of Gladstone's motion, Gladstone also successfully petitioned the court to terminate the stay pending appeal de novo as a result of Overland's failure to continue to pay rent to Gladstone during the pendency of the appeal. See Pa.R.C.P.M.D.J. 1008B. Thereafter, Gladstone obtained an order of possession, and an eviction notice was posted on the property, which indicated that eviction was to take place on February 5, 2007.

¶ 4 The trial court conducted a hearing on Gladstone's motion on January 31, 2007, and, at the conclusion of the hearing, the trial court struck off Overland's appeal as untimely. After entry of the trial court's January 31, 2007 order, Overland filed a praecipe to reinstate the writ of certiorari and a motion to quash the order of possession. In response, Gladstone filed a motion to quash Overland's praecipe.²

¶ 5 While these motions were pending before the trial court, Gladstone executed its judgment of possession on February 5, 2007, and Overland was evicted from its former leasehold. On February 6, 2007, Overland filed a petition for preliminary injunction to enjoin Gladstone from exercising possession over the property, despite the fact that eviction had already occurred. In turn, the matter was assigned to Judge Ann H. Lokuta of the Luzerne County Court of Common Pleas for disposition. A hearing on the matter was conducted on February 6, 2007, whereat Gladstone, through its attorney, Jill A. Moran, Esquire, requested orally that Judge Lokuta recuse herself from the case due to the fact that Attorney Moran was subpoenaed to testify at Judge Lokuta's pending action before the Judicial Conduct Board. Judge Lokuta denied Gladstone's request. Thereafter, Judge Lokuta issued a rule to show cause and temporary injunction in favor of Overland and scheduled a second hearing to be held on February 7, 2007, the following day.

¶ 6 Gladstone sought Judge Lokuta's recusal at the February 7, 2007 hearing via written motion, which Judge Lokuta denied. Following argument on the merits of the preliminary injunction, Judge Lokuta granted the petition for preliminary injunction, conditioned on Overland's filing of bond with the prothonotary. The order indicates that the basis for the granting of the preliminary injunction was that a "final and unappealable Order" was not yet entered in the action involving the parties at civil docket 12648 of 2006.³ Thereafter, on February 8, 2007, the trial court, presided by Judge Clinton W. Smith, ruled that certiorari review and relief had been granted in Overland's favor previously by virtue of the trial court's October 25, 2006 order, and it denied Overland's praecipe to reinstate its writ of certiorari. The trial court also denied Overland's motion to quash Gladstone's order of possession.

¶ 7 Based on Judge Smith's ruling, Gladstone sought reconsideration of the preliminary injunction granted in Overland's favor. Following a hearing, Judge Lokuta denied Gladstone's motion for reconsideration. Gladstone, in turn, filed a timely notice of appeal to this Court. The trial court ordered Gladstone to file a concise statement of matters complained of on appeal, and it complied. Thereafter, the trial court authored an opinion that addressed the issues presented in Gladstone's concise statement.

¶ 8 Gladstone presents the following issues for our review:

1. Did the trial court abuse its discretion in granting the preliminary injunction on February 7, 2007, when [Overland] failed to establish the elements necessary for a preliminary injunction?

2. Did the trial court abuse its discretion in denying [Gladstone's] motion for recusal, where the record clearly demonstrated an appearance of impropriety and that Judge Lokuta's presiding over the case undermined the public's confidence, where [Gladstone's] counsel stated on the record that she expects to testify against Judge Lokuta in a proceeding before the Judicial Conduct Board[?]

Gladstone's brief, at 4.

¶ 9 Preliminarily, we note that we are authorized to exercise jurisdiction over this appeal by virtue of Pa.R.A.P. 311(a)(4), which provides that a party aggrieved by an order granting a preliminary injunction may appeal the order as of right. Inasmuch as possession of the former leasehold had passed to Gladstone as a result of the eviction process, the present injunction constitutes a mandatory preliminary injunction in that it requires Gladstone to surrender its possession of the former leasehold to Overland for its business use. See, e.g., Greenmoor, Inc. v. Burchick Constr. Co., 908 A.2d 310, 312-13 (Pa.Super.2006) (mandatory preliminary injunctions require positive acts on part of respondent to preserve status quo between parties). We have summarized the nature of our standard of review from the grant or denial of a mandatory preliminary injunction in the following fashion:

Generally, appellate inquiry is limited to a determination of whether an examination of the record reveals that "any apparently reasonable grounds" supports the trial court's disposition of a preliminary injunction request. [Summit Towne Centre, Inc. v. Shoe Show of Rocky Mt., Inc., 573 Pa. 637, 646, 828 A.2d 995, 1001 (2003)]. The standard of review differs, however, where, as here, the trial court has granted a mandatory preliminary injunction. See id., note 7. Such a remedy is extraordinary and should be utilized only in the rarest of cases. See id., note 13. Our Supreme Court has deviated from the general standard applicable to review of preliminary injunctions, only when reviewing the grant of a mandatory preliminary injunction. See [Mazzie v. Commonwealth, 495 Pa. 128, 134, 432 A.2d 985, 988]. The Mazzie Court explained:

Generally, preliminary injunctions are preventive in nature and are designed to maintain the status quo until the rights of the parties are finally determined. There is, however, a distinction between mandatory injunctions, which command the performance of some positive act to preserve the status quo, and prohibitory injunctions, which enjoin the doing of an act that will change the status quo. This Court has engaged in greater scrutiny of mandatory injunctions and has often stated that they should be issued more sparingly than injunctions that are merely prohibitory. Thus, in reviewing the grant of a mandatory injunction, we have insisted that a clear right to relief in the plaintiff be established. [...].

Id. (citations omitted and emphasis supplied.)

As the above elucidates, in reviewing the grant of a mandatory preliminary injunction we must examine the merits of the controversy and ensure that "a clear right to relief in the plaintiff [is] established." See Id.

Greenmoor, 908 A.2d at 313 (citing Kessler v. Broder, 851 A.2d 944, 946-47 (Pa.Super.2004)). Therefore, the law of this Commonwealth requires that a petitioner seeking a preliminary injunction must establish every one of the following prerequisites:

First, a party seeking a preliminary injunction must show that an injunction is necessary to prevent immediate and irreparable harm that cannot be adequately compensated by damages. Second, the party must show that greater injury would result from refusing an injunction than from granting it, and, concomitantly, that issuance of an injunction will not substantially harm other interested parties in the proceedings. Third, the party must show that a preliminary injunction will properly restore the parties to their status as it existed immediately prior to the alleged wrongful conduct. Fourth, the party seeking an injunction must show that the activity it seeks to restrain is actionable, that its right to relief is clear, and that the wrong is manifest, or, in other words, must show that it is likely to prevail on the merits. Fifth, the party must show that the injunction it seeks...