Opinions of the United
2009 Decisions States Court of Appeals
for the Third Circuit
6-4-2009
Pae Chung v. Byong Choi
Precedential or Non-Precedential: Non-Precedential
Docket No. 08-3932
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"Pae Chung v. Byong Choi" (2009). 2009 Decisions. Paper 1234.
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NOT PRECEDENTIAL
UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT
No. 08-3932
PAE YOUNG CHUNG;
SUK CHUNG,
Appellants
v.
BYONG JIK CHOI;
IN SOK CHOI
On Appeal from the United States District Court
for the Eastern District of Pennsylvania
(D.C. Civ. No. 07-02187)
Honorable Harvey Bartle, III, District Judge
Submitted under Third Circuit LAR 34.1(a)
June 2, 2009
BEFORE: MCKEE, HARDIMAN, and GREENBERG, Circuit Judges
(Filed: June 4, 2009)
OPINION OF THE COURT
GREENBERG, Circuit Judge.
This matter comes on before this Court on an appeal from a final judgment entered
on August 19, 2008, in this contract and tort action in which Pae Young Chung and Suk
Chung sued Byong Jik Choi and In Sok Choi. The Chungs set forth their claims in two
counts, one predicated on the Chois’ alleged breach of contract and the second predicated
on their alleged tortious interference with the Chungs’ contract for the sale of their
business.
The dispute arose out of a landlord-tenant relationship between the Chois as
landlords and the Chungs as tenants in a property located at 35 South 52nd Street in
Philadelphia in which the Chungs operated a restaurant. In particular, the action’s roots
were in 2006 when the Chungs contemplated selling the business and, after negotiations
between the Chungs and the Chois, they either entered into or came close to entering into
an agreement specifying the terms pursuant to which a purchaser of the business could
rent the property. At that time the Chungs had not yet found a purchaser for the business.
Ultimately, however, after the Chungs found a purchaser, when the Chois advised the
purchaser that they wanted terms materially less favorable to a tenant than those the Chois
and the Chungs had discussed, the sale collapsed because the purchaser would not accept
those terms. The Chungs then brought this action, asserting that the loss of the sale
caused them a financial loss for which the Chois were responsible.
The case was tried to the District Court sitting without a jury and thus the Court
explained its determinations in an opinion dated August 18, 2008, making comprehensive
findings of fact and reaching conclusions of law. Consequently, we only have
summarized the facts of the case in our opinion. The crucial conclusions the District
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Court reached were that the parties ultimately did not enter a binding agreement with
respect to the rental terms to be offered a purchaser of the restaurant, and that, even if
they did so, the terms were to be binding on the Chois only for a reasonable length of time
and the Chungs did not find a purchaser within that reasonable time. Accordingly, the
Court held that the agreement, if there was one, had expired before the Chungs found a
purchaser for the restaurant. Thus, the Court held in the Chois’ favor and the Chungs
appealed.
The District Court had diversity of citizenship jurisdiction pursuant to 28 U.S.C. §
1332 and we have jurisdiction pursuant to 28 U.S.C. § 1291. The parties dispute our
standard of review. The Chungs contend that this case involves only errors of law caused
by the formulation of erroneous legal precepts and thus our review is plenary. See
Barclays Invs., Inc. v. St. Croix Estates, 399 F.3d 570, 576 (3d Cir. 2005) (court of
appeals makes de novo review of state law).
On the other hand, the Chois see this appeal as involving a review of the District
Court’s factual findings and thus contend that we should use the clearly erroneous
standard in adjudicating this appeal. See Berg Chilling Sys., Inc. v. Hull Corp., 369 F.3d
745, 754 (3d Cir. 2004). We have no need to resolve this dispute over our standard of
review as, regardless of which we apply, we are in complete agreement with the District
Court and will affirm substantially for the reasons it set forth.
We, however, do comment on one point in the Chungs’ brief. In the District
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Court’s opinion it explains that on April 20, 2006, the Chungs through their attorney
submitted a counteroffer to the Chois in response to an earlier offer from them. On April
29, 2006, the Chois, through their son who was negotiating on their behalf, wrote the
Chungs’ attorney that “all the terms [of the April 20, 2006 counteroffer] look fine . . . .”
App. at 207. He then added the following new consideration to the negotiations in his
April 29, 2006 correspondence: “let’s look at the new tenant’s credit report before we
accept the offer in it’s [sic] entirety however.”
In their brief the Chungs indicate that “[t]he choice of words [with respect to the
new tenant’s credit] assumes incorrectly that the email dated April 29, 2006, was not an
acceptance of the previous email offer for a lease” containing specific terms for the new
lease. Appellants’ br. at 14. Then the Chungs go on to say that the provisions with
respect to the new tenant’s credit status “are not intended as a condition of acceptance.
The terms had already been negotiated.” Id. at 17.
Clearly the Chungs’ approach is flawed. The provision with respect to the
tenant’s credit was a portion of the Chois’ acceptance of the Chungs’ terms which the
Chois did not accept until April 29, 2006. Thus, the provision added a subject to the
parties’ negotiations by setting forth that prior to the Chois accepting the Chungs’ offer
they wanted to look at the purchaser’s credit report. We are well aware that contractual
provisions for assignments and subleases frequently provide that the landlord has the right
to review a proposed assignee or subtenant and can withhold consent to an assignment or
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sublease but that he cannot do so unreasonably. The credit report reference in the April
29, 2006 letter, however, did not state that the Chois would not unreasonably reject a new
tenant on the basis of his credit. Accordingly, the Chungs’ contention that “[t]he buyers
had excellent credit,” appellants’ br. at 20, even if true, does not help their case. Our
point is that if the Chungs wanted to negotiate for a reasonable consent provision with
respect to the new tenant they should have done so. Instead, they left the Chois with the
unfettered right to look at the credit report “before we accept the offer.” Thus, the Chois
made it clear that there was not to be an agreement until they saw the credit report on the
purchaser and accepted him to be their tenant. The provision does not set forth a standard
to govern the Chois’ acceptance or rejection of the new tenant. Clearly, inasmuch as the
Chungs did not express their agreement to the open-ended credit report provision in the
April 29, 2006 letter, the Chungs and the Chois never entered into a binding agreement
obliging the Chois to accept a new tenant.
For the foregoing reasons and for the reasons the District Court set forth, the
judgment of August 19, 2008, will be affirmed.
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