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NON-PRECEDENTIAL DECISION - SEE SUPERIOR COURT I.O.P. 65.37
PR METROPLEX WEST LLC IN THE SUPERIOR COURT
OF
PENNSYLVANIA
Appellant
v.
MW GENERAL, INC.
Appellee No. 3139 EDA 2016
Appeal from the Order Entered October 4, 2016
In the Court of Common Pleas of Montgomery County
Civil Division at No(s): 2016-13230
BEFORE: BOWES, J., LAZARUS, J., and PLATT, J.*
MEMORANDUM BY LAZARUS, J.: FILED OCTOBER 24, 2017
PR Metroplex West, LLC (“Metroplex”), appeals from the trial court’s
order, entered in the Court of Common Pleas of Montgomery County, denying
its emergency motion for a preliminary injunction.1 After careful review, we
dismiss the appeal as moot.
This action involves a dispute over the proposed sale of a large shopping
center (“the Center”) located in Plymouth Meeting. Metroplex and Appellee,
MW General, Inc. (“MW”), jointly own and operate the Center.2 The parties’
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* Retired Senior Judge assigned to the Superior Court.
1We note that an interlocutory order that denies an injunction is appealable
as of right. See Pa.R.A.P 311(a)(4).
2Metroplex West Associates, L.P. a Pennsylvania limited partnership, owns,
operates and maintains the Center. Metroplex General, Inc., is the sole
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business relationship and ownership of the Center is memorialized in a 1999
Partnership Agreement (“Agreement”) and a 2001 Stockholders’ Agreement
(Stockholders’ Agreement).
Section 4.4.2 of the parties’ Stockholders’ Agreement states:
If either Stockholder (herein the 'Selling Stockholder') shall
receive from a third party which is not an Affiliate, a bona fide
written offer acceptable to it for the purchase of all but not less
than all of the Partnership Property, and provided such offer if
accepted shall provide for a deposit by a certified check of the
prospective purchaser for a sum at least equal to ten (10%)
percent of the purchase price, and shall provide for the closing of
title not less than ninety (90) days nor more than one hundred
twenty (120) days after the date of such offer, and such offer has
sufficient information on which a reasonable judgment may be
made as to the ability of the prospective purchaser to perform,
such offer shall be delivered to the other Stockholder (herein the
‘Other Stockholder’) within fifteen (15) days after its receipt,
together with a request by the Selling Stockholder to the Other
Stockholder to authorize the Corporation to sell the Property in
accordance with said offer.
Stockholders’ Agreement, § 4.4.2 (emphasis added). When a party under the
Stockholders’ Agreement receives proper notice from the other party of a
“bona fide written offer” for the Center, the other party must then make an
election to authorize the Corporation, or agree within thirty days after receipt
of the selling Stockholder’s notice, to purchase the selling Stockholder’s
interest in the Partnership. Id. However, if the other party who receives
notice of a “bona fide written offer” fails to make a timely election regarding
the offer, then that party will be deemed to have elected to authorize the sale
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general partner of Metroplex West. Metroplex General is owned and controlled
by Metroplex and MW.
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of the Partnership Property pursuant to the offer and must participate in the
sale. Id.
In January 2016, Metroplex began seeking a purchaser for the Center
in an effort to divest its parent company, Pennsylvania Real Estate Investment
Trust (“PREIT”), of its noncore assets. On May 27, 2016, Metroplex received
a Letter of Intent (“LOI”) from a third party, DDR Corporation (“DDR”),
indicating its interest in purchasing the Center. The May 27, 2016 LOI
stipulated that it was “open for acceptance until July 15, 2016 at 5:00 p.m.
EST and will automatically expire if not accepted in writing prior to such time
and date.” See May 27, 2016 LOI, Exhibit B to Ioannou Affidavit. On May
31, 2016, Metroplex sent a letter to MW giving it notice of its intention to sell
the Center to DDR pursuant to the terms and conditions set forth in DDR’s
LOI. In the letter, Metroplex requested that MW make its required election
under section 4.4.2 of the Stockholders’ Agreement and also indicated that if
MW failed to deliver an election notice to Metroplex by a given response date,
that it would deem MW to have authorized the sale of the Center. On June 7,
2016, MW responded to Metroplex’s letter, stating that DDR’s May 27 offer
was not a “bona fide offer” under section 4.4.2, but merely an expression of
intent and a negotiation aid for the discussion of a potential sale of the Center,
and, therefore, DDR’s LOI did not trigger any obligation on MW’s part under
the Shareholder Agreement.
On June 13, 2016, DDR revised its offer for the Center, clarifying that
the terms of the LOI are binding upon the parties, that the LOI is subject to
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certain rights held by MW to elect to purchase the Center, and that if MW does
exercise such rights then DDR acknowledges that Metroplex will be unable to
convey the Center to DDR. On June 14, 2016, Metroplex notified MW of DDR’s
revised LOI and its continued intention to sell the property, subject to MW’s
right of first refusal. On June 24, 2016, MW responded to Metroplex’s letter
by again contending that DDR’s LOI did not constitute a “bona fide offer” but
was merely a conditional offer that does not obligate DDR to purchase the
Center and, accordingly, does not trigger any obligation for it to comply with
section 4.4.2 of the Stockholders’ Agreement.
On June 30, 2016, Metroplex filed a complaint against MW seeking
specific performance/injunctive relief and declaratory relief. On that same
date, Metroplex filed an emergency motion seeking a mandatory preliminary
injunction.3 In its complaint Metroplex claimed that it received a “bona fide
offer” from DDR to purchase the Center and that MW had breached the parties
Stockholders’ Agreement by failing to comply with section 4.4.2. On August
23, 2016 and September 12-14, 2016, the trial court held a hearing on
Metroplex’s emergency motion for a preliminary injunction. At the hearing,
Metroplex sought the court’s approval to sign DDR’s letter of intent and
proceed with the sale. On October 3, 2016, the court denied the motion.
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3 Mandatory injunctions command the performance of some positive act to
preserve the status quo, where prohibitory injunctions enjoin a party from
doing an act that will change it. Mazzie v. Commonwealth, 432 A.2d 985
(Pa. 1981).
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Metroplex filed a timely notice of appeal,4 presenting the following issues for
our consideration:
(1) Whether the trial court erred by denying [Metroplex’s]
emergency motion for preliminary injunction on the basis
that [Metroplex] failed to demonstrate a clear right to relief
where [Metroplex] manifestly established that it was
entitled to an injunction under section 4.4.2 of the parties’
Stockholders’ Agreement.
(2) Whether the trial court erred by denying [Metroplex’s]
emergency motion for preliminary injunction on the basis
that [Metroplex] failed to demonstrate it lacked an adequate
remedy at law where [Metroplex] proved that without the
requested injunction it would be unable to sell the Metroplex
and would lose an irreplaceable business opportunity.
(3) Whether the trial court erred by denying [Metroplex’s]
emergency motion for preliminary injunction on the basis
that [Metroplex] failed to establish the remaining
requirements for a preliminary injunction where [Metroplex]
in fact proved all of the necessary requirements for issuance
of its requested preliminary injunction.
Before we address the merits of the instant appeal, we must discuss
MW’s claim that this appeal is rendered moot by the fact that the expiration
date of DDR’s LOI has passed. 5
Our Supreme Court explained the circumstances which invoke the
mootness doctrine as follows:
[C]ases presenting mootness problems involve litigants who
clearly had standing to sue at the outset of the litigation. The
problems arise from events occurring after the lawsuit has gotten
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4The trial court did not order Metroplex to file a Pa.R.A.P. 1925(b) statement
of errors complained of on appeal.
5The trial court did not address the issue of mootness in its Rule 1925(a)
opinion.
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underway[,] changes in the facts or in the law[,] which allegedly
deprive the litigant of the necessary stake in the outcome. The
mootness doctrine requires that “an actual controversy must be
extant at all stages of review, not merely at the time the complaint
is filed.”
In re D.A., 801 A.2d 614, 616 (PA. Super. 2002), citing In re Gross, 382
A.2d 116, 119 (Pa. 1978). An issue can become moot during the pendency
of an appeal due to an intervening change in the facts of the case. In re
Cain, 590 A.2d 291 (Pa. 1991). “Where changes in the facts of a pending
case occur that eliminate an actual controversy and make it impossible for the
court to grant the requested relief, the case will be dismissed as moot.” J.S.
and C.S. v. Whetzel, 860 A.2d 1112, 1118 (Pa. Super. 2004).
There are two well-established exceptions to the mootness doctrine: (1)
when the issue presented is one of great public importance or (2) is one that
is capable of repetition yet escaping judicial review. Ass’n of Pa. State
College & Univ. Faculties v. Pa. Labor Rels. Bd., 8 A.3d 300, 305 (Pa.
2010).
Instantly, DDR’s revised June 13, 2107 LOI indicated that its offer
would automatically expire on July 15, 2016 at 5:00 p.m. EST if not accepted
in writing prior to that date and time. At the preliminary injunction hearing,
Metroplex stated that DDR extended this deadline, first through September 1,
2016, and then again until September 30, 2016. N.T. Preliminary Injunction
Hearing, 8/23/16, at 144-45. As of the date of the preliminary injunction
hearing, counsel for Metroplex confirmed that the expiration date had been
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extended to September 30, 2016. Id. at 145 (“Okay. So right now, that date
has been extended to September 30th? Yeah.”).
Without evidence to the contrary, the record supports the fact that
DDR’s LOI expired on September 30, 2016. Instantly, Metroplex’s proposed
order for injunctive relief states the following, “IT IS HEREBY FURTHER
ORDERED AND DECREED THAT pursuant to section 4.4.2 of the Stockholders'
Agreement, [MW] is required forthwith to authorize Metroplex General, Inc.
to sign the June 13 bona fide written offer.” Metroplex’s Proposed Order
Granting Preliminary Injunction, at 3. Based upon this language, any order
granting injunctive relief entered after September 30, 2016 would have had
no force or effect on the sale of the Center to DDR where DDR’s LOI had
already expired. See Burke v. Independence blue Cross, 103 A.3d 1267,
1271 (Pa. 2014) (“The claim of mootness, by contrast, stands on the predicate
that a subsequent change in circumstances has eliminated the controversy so
that the court lacks the ability to issue a meaningful order, that is, an order
that can have any practical effect.”).
Metroplex claims that the issue presented to this Court is capable of
repetition and apt to elude appellate review since it “would seek to obtain a
new offer to purchase the [Center]” and the issue regarding what constitutes
a “bona fide offer” under section 4.4.2 would arise again. Appellant’s Reply
Brief, at 8. However, the relief requested in Metroplex’s motion for injunctive
relief was specifically tailored to the July 13, 2016 offer extended by DDR to
buy the Center. Because that offer expired on September 30, 2016, the court
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could no longer order the injunctive relief Metroplex sought. Thus, we find
that this interlocutory appeal is moot.6 See Strassburger v. Philadelphia
Record Co., 6 A.2d 922 (Pa. 1939) (appeal was from refusal of request for
preliminary injunction to prevent annual meeting of shareholders from
transpiring on certain day; appeal rendered moot due to fact that annual
meeting took place).
We do not classify this case as one that involves an issue of great public
importance or one that is capable of repetition and apt to elude judicial review.
Cf. Burke, supra, (even though issue moot, controversy was of great public
importance due to prevalence of autism-spectrum-disorder diagnoses and
significant amount of time that ordinarily elapses between when insurer
originally denies coverage and when court rules on whether denial permissible
under Act 62). Metroplex will have the opportunity to solicit more potential
buyers for the Center. Moreover, we decline to speculate as to whether the
parties will come to a stalemate on the interpretation of section 4.4.2 in the
event of future sale of the Center.7
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6We recognize that Metroplex’s remaining claims pled in its civil action-equity
complaint, specific performance and declaratory judgment, are still viable.
Mootness only applies to Metroplex’s emergency motion for injunctive relief
which is the sole issue on appeal.
7 Moreover, in the preliminary injunction/equity context, MW aptly points out
that Metroplex could have prevented the lapse of DDR’s offer by making it
contingent on the final resolution of the pending motion or could have been
more diligent in moving the matter along.
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Appeal dismissed as moot.8
Judgment Entered.
Joseph D. Seletyn, Esq.
Prothonotary
Date: 10/24/2017
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8 However, even if we were to find that the current appeal was not moot, we
would affirm the trial court’s denial of Metroplex’s emergency motion for a
mandatory preliminary injunction where Metroplex did not present evidence
to establish that it was likely to prevail on the merits. See Greenmoor, Inc.
v. Burchick Constr. Co., 908 A.2d 310 (Pa. Super. 2006). DDR’s LOI is
simply not a “bona fide offer” as is specifically required under section 4.4.2.
The LOI lacked explicit terms delineated in the Shareholder Agreement.
Summit Towne Ctr., Inc. v. Shoe Show of Rocky Mt., Inc., 828 A.2d 995
(Pa. 2003) (on appeal from denial of preliminary injunction, appellate court
only examines record to determine if there were any apparently reasonable
grounds for action of trial court; ruling will be reversed only if it is plain that
no grounds exist to support decree or that rule of law relied upon was palpably
erroneous or misapplied). DDR’s letter of intent did not equate to an “offer”
under the terms of the parties’ Shareholder Agreement where there was no
accompanying 10% deposit; no confirmed purchase price; no settlement date;
and no financial information provided. The court found that DDR’s proposal
was merely “an agreement to negotiate.” Trial Court Opinion, 12/8/16, at 6.
Because DDR’s purchase price was subject to change and further negotiations,
Metroplex’s “clear right to relief and reasonable likelihood of success on the
merits,” was lacking.
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