The Pennsylvania Superior Court has another case pending that illustrates the perils of Pennsylvania appellate practice.

In the Smaling Estate case, an Orphans’ Court appeal in the Superior Court, in which that Court recently granted re-argument en banc on September 7, 2012. The panel decision was issued July 10, 2012. Like Newman Development v. Genuardi’s Family Market, 2012 which the Pennsylvania Supreme Court decided on September 28, Smaling involves waiver of issues on appeal for failure to file post trial objections to the trial court decision — in Newman it was post trial motions in a civil case; in Smaling, it was exceptions to an Orphans’ Court decision.

Both cases are illustrations of the Superior Court’s inclination to throw out appeals because one party or another has failed to comply strictly with the increasingly complex web of procedural rules that a party must navigate to successfully prosecute an appeal.

More specifically, in its Smaling decision, the Superior Court found that the Appellant had waived all her issues on appeal by not filing exceptions to the Orphans’ Court decree, notwithstanding the clear language of Orphans’ Court Rule 7.1 that appears to compel the opposite conclusion (“Failure to file exceptions shall not result in waiver if the grounds for appeal are otherwise properly preserved.”), and the Comment to that Rule (“Rule 7.1 permits but does not require exceptions to orders pursuant to Pa.R.A.P. 341(b) and Pa.R.A.P. 342.  The election of an aggrieved party not to file exceptions will not result in waiver of issues on appeal.”)

The Superior Court’s reading in Smaling doesn’t work because it requires exceptions any time there is a quarrel with the Orphans’ Court decision itself as opposed to evidentiary or other trial or pretrial rulings.   So, if the Orphans’ Court cites the wrong law in its decision, applies the facts to the law incorrectly or if the issue is weight of the evidence, exceptions would always be required. In fact, the natural result of Smaling will be that cautious practitioners will file exceptions in all cases — almost exactly the opposite of what OC Rule 7.1 clearly contemplates (that exceptions will be the “exception” and not the norm).

Newman Development is likely to have some impact on the en banc re-argument in Smaling. Newman involved a retail store lease in a commercial shopping center that was planned to be built south of Pottsville, Pennsylvania.  Genuardi’s had entered into the lease, but then was acquired by Safeway. Safeway assumed the lease, but when the shopping center was not constructed on schedule, sent Newman a cancellation notice. After a bench trial in Chester County Pennsylvania, the trial court found that Genuardi’s/Safeway had breached the lease, and awarded Newman $131,277 in damages representing the difference between the rents that Genuardi’s/Safeway would have paid versus the rents paid by replacement retail stores (PetSmart and Michael’s).

Both parties filed post trial motions, and the trial court found it had miscalculated lost rent and revised its damage award upward to $316,889.92. Both parties then appealed. The Superior Court ruled in Newman’s favor — holding that the trial court had not correctly calculated damages under the lease. The Superior Court remanded to the trial court for a re-calculation of damages.

On remand both parties submitted briefs and argument, but agreed “there is no need nor is it appropriate to take additional evidence in this matter.”* The trial court then recalculated damages as $18,489,221.60.   Genuardi’s/Safeway filed court an appeal without filing post-trial motions, believing that post-trial motions were not necessary, since there had been no “trial” on remand, and no evidence taken, only a recalculation consistent with the Superior Court Opinion.

Before the Superior Court a second time that Court held that Genuardi’s/Safeway had waived all appellate issues by not filing post trial motions — a draconian result that of course directly called into question the judgment of Genuardi’s/Safeway’s counsel in not filing post trial motions and denied Genuardi’s/Safeway merits review of the trial court decision.

In its September 28 decision, the Supreme Court reversed the Superior Court.  The issue before both Courts was the proper application of Pa.R.P.C. 227.1(b)(2), which provides that post trial relief may not be granted unless the “…grounds therefor…are specified in the motion….Grounds not specified are deemed waived unless leave is granted upon cause shown to specify additional grounds.”  In the Note to the Rule it is provided: “A motion for post-trial relief may not be filed to orders disposing of preliminary objections, motions for judgment on the pleadings or for summary judgment, motions relating to discovery or other proceedings which do not constitute a trial.”

As a practical matter, because both parties had filed post trial motions before the first appeal raising issues concerning construction of the lease and calculation of damages for breach, because both parties had fully briefed and argued the prior appeal and on remand, and because the remand was for no purpose other than recalculation of damages within the existing factual and contractual framework established in the prior trial, all issues that Genuardi’s/Safeway wanted to raise on the second appeal were well  known.

The appeal to the Supreme Court (in which various Amici appeared, including the undersigned) focused on whether the remand was in the nature of “proceedings which do not constitute a trial.”  After considering the case law that the Superior Court had cited, the Supreme Court concluded that remand in this case had not been a trial, hence no post trial motions were required.  The Court held: “…the remand proceedings in this instance, where the trial judge merely reached a different damage calculation based upon facts and contract terms already in the record, was not a “trial,” and Rule 227.1 does not apply.” *

The Supreme Court remanded the case to the Superior Court for a decision on the merits of Genuardi’s/Safeway’s appeal.

*Legal References:

• In re Smaling Estate, 2012 PA Super 139, __ A 3d ____ (2012)

• Newman Development v. Genuardi’s Family Markets, ___ Pa ___, 2012 Pa. LEXIS 2262 (2012)

• Application of Pa.R.P.C. 227.1(b)(2), which provides that post trial relief may not be granted unless the “…grounds therefor…are specified in the motion…

• “there is no need nor is it appropriate to take additional evidence in this matter.” (Slip Op. 1/25/2012 at 1).

• …was not a “trial,” and Rule 227.1 does not apply.” __ A 2d___, ___ 2012 Pa. LEXIS, *50.