GIRARD ESTATE AREA RESIDENTS et al v. DEFENSE REALTY, LLC

Filing 50

MEMORANDUM AND/OR OPINION. SIGNED BY HONORABLE LAWRENCE F. STENGEL ON 9/30/09. 10/1/09 ENTERED AND COPIES E-MAILED. (jpd)

IN THE UNITED STATES DISTRICT COURT F O R THE EASTERN DISTRICT OF PENNSYLVANIA G IR A R D ESTATE AREA R E S I D E N T S , et al., P l a i n t i f fs vs. D E F E N S E REALTY, LLC, et al., D e fe n d a n t : : : : : : : : C IV IL ACTION

N O . 08-2456

MEMORANDUM S T E N G E L , J. September 30, 2009

P la in tif f s Girard Estate Area Residents and Broad Street West Civic Association (" C iv ic Associations") filed this action for declaratory and injunctive relief. Defendants th e United States of America and Defense Realty, LLC ("Defense Realty") filed motions f o r summary judgment on February 2, 2009 and February 4, 2009, respectively.1 For the re a so n s set forth below, their motions will be granted.

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Defense Realty's motion joined the motion and memorandum filed by the United

States. The Civic Associations filed an initial response on March 17, 2009, titled "Plaintiffs Girard Estate Area Residents and Broad Street West Civic Associations's Joint Answers to the Motions of the United States and Defense Realty, LLC for Summary Judgment, and Plaintiffs' Cross Motion for Summary Judgment," see Docket at 29, Girard Estate Area Residents, et al. v. Defense Realty, LLC, et al, No. 08-2546 (E.D. Pa. filed March 17, 2009), and a reformatted response on March 31, 2009, see Docket at 38, Girard Estate Area Residents, et al. v. Defense Realty, LLC, et al, No. 08-2546 (E.D. Pa. filed March 31, 2009) [hereinafter "Plaintiffs' March 31, 2009 Memorandum"].

I.

BACKGROUND T h is is an action for declaratory and injunctive relief and for a decree of specific

p e rf o rm a n c e to enforce a written agreement between the parties and a declaration of deed re stric tio n s . The Civic Associations are located in South Philadelphia and organized for th e purpose of preserving the quality of life in, and character of, their neighborhoods. Plaintiff's March 31, 2009 Memorandum at Ex. 1, at ¶ 3. This controversy involves a la rg e section of land around 20 th & Johnson Streets containing six buildings, which used to be the local headquarters of the Department of Defense. See Plaintiff's March 31, 2 0 0 9 Memorandum at Ex. P, at ¶ 60-61, 123; Ex. 1, at ¶ 96. Defense Realty purchased the property, which was zoned "general industrial." See C o m p la in t at ¶ 3; Defense Realty's Answer at ¶ 3, 5. Defense Realty wanted to use the p ro p e rty for commercial development, a use not permitted under the general industrial z o n in g classification. See Complaint at ¶ 6; Defense Realty's Answer at ¶ 5-6. Defense R e a lty went before the Philadelphia City Council to request the re-zoning of the property to commercial classification. Id. D ef en se Realty sought the support of the Civic Associations. See Plaintiff's M a rc h 31, 2009 Memorandum at Ex. 1, at ¶51. Defense Realty and the Civic A ss o c iatio n s entered into negotiations. The Civic Associations informed Defense Realty th e y did not want the site used as another school because the elementary and high schools in the area caused noise and traffic congestion, and they were concerned about a school's im p a c t on the community's quality of life. See Plaintiff's March 31, 2009 Memorandum a t Ex. 1, at ¶ 57-64; see, e.g., Plaintiffs' March 31, 2009 Memorandum at Ex. G, at 65-66.

D e f e n se Realty spoke about their desire to work with the community and their hopes to e sta b lis h a retail complex. Id., at Ex. 1, at ¶ 72-73; Plaintiffs' March 31, 2009 M e m o r a n d u m at Ex. J, at 7-8, 9-10. To get the support of the civic associations, Defense R e a lty entered into an agreement dated June 10, 2005, in which the plaintiffs agreed to s u p p o rt the re-zoning subject to certain conditions. See Plaintiff's March 31, 2009 M e m o ra n d u m at Ex. A. The civic associations were concerned the property would be used in ways which w o u ld bring more problems into their neighborhoods. Therefore, they attached a d e c la ra tio n of deed restrictions to the June 10, 2005 agreement. Id. This declaration p la c ed restrictions on the use of the property which would have otherwise been permitted u n d e r commercial zoning. For example, it prohibited elementary schools and high s c h o o ls , fast food and take-out restaurants, counter service restaurants, buffet restaurants, a n d drive-in restaurants. See Defendant's Memorandum at Ex. L, at 1. Restaurants at the p ro p e rty are limited to restaurants with "dine-in table service" and "wait-staff." See D e f e n d a n t's Memorandum at Ex. L, at 2. Residential use of the property was limited to s in g le -o w n e r occupancy use. In consideration of this agreement and declaration, the p la in tif f s supported the proposed change in zoning which was passed on June 16, 2005. See id. The declaration was recorded with the Commissioner of Records in Philadelphia o n July 13, 2005. See Plaintiffs' March 31, 2009 Memorandum at Ex. 1, at ¶ 82. O n October 22, 2007, Defense Realty entered into a twenty-year lease with the D e p a rtm e n t of Labor to use three floors of one of the sites' buildings as Philadelphia Job 3

C o rp s Center ("Job Corps"). See Plaintiffs' March 31, 2009 Memorandum at Ex. C, at ¶¶ 1 , 2, 6. Prior to executing the lease, Defense Realty did not consult or provide notice to th e Civic Associations regarding its lease with the Department of Labor, or the intended u s e of the property. See Plaintiffs' March 31, 2009 Memorandum at Ex. G. Job Corps h a s classes for obtaining a General Educational Development ("GED") certificate, and c la s s e s to prepare enrollees for vocation, college, and entry into the armed forces. See id., a t ¶¶ 97-98. Job Corps also has an institutional kitchen, where enrollees are trained in n u tritio n , meal planning, and food preparation for health care institutions. Job Corps e n ro lle e s are provided with the prepared meals free of charge. Faculty members may p a rta k e in the prepared meals for a nominal fee of $2.00. T h e Civil Associations filed a complaint in the Court of Common Pleas, which D e f en s e Realty removed here. They claimed Defense Realty breached the agreement by e n te rin g into a long-term lease with the U.S. Department of Labor to use one of the b u ild i n g s on the property for Jobs Corps, which, they allege, is a high school, contains a r e sta u r a n t, and has an impermissible residential use. They demanded the defendant cease a n d desist. On June 26, 2008, pursuant to a stipulation by the parties, the United States of A m e ric a intervened as an additional defendant pursuant to Federal Rule of Civil P ro c e d u re 24(a).

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II.

S T A N D A R D OF REVIEW S u m m a ry judgment is appropriate "if the pleadings, depositions, answers to

in ter ro g a to rie s, and admissions on file, together with affidavits, if any, show that there is n o genuine issue as to any material fact and that the moving party is entitled to judgment a s a matter of law." FED. R. CIV. P. 56(c). An issue is "genuine" when a reasonable jury c o u ld return a verdict for the non-moving party based on the evidence in the record. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). A factual dispute is " m a te ria l" when it could affect the outcome of the case under the governing law. Id. A party seeking summary judgment initially bears responsibility for informing the c o u rt of the basis for its motion and identifying those portions of the record that it b e lie v e s demonstrate the absence of a genuine issue of material fact. Celotex Corp. v. C a tre tt, 477 U.S. 317, 322 (1986). Where the non-moving party bears the burden of proof o n a particular issue at trial, the moving party's initial Celotex burden can be met simply b y demonstrating "to the district court that there is an absence of evidence to support the n o n -m o v in g party's case." Celotex, 477 U.S. at 325. After the moving party has met its in itia l burden, "the adverse party's response, by affidavits or otherwise as provided in this r u le , must set forth specific facts showing that there is a genuine issue for trial." FED. R. C IV. P. 56(e). Summary judgment is therefore appropriate when the non-moving party f a ils to rebut by making a factual showing that is "sufficient to establish the existence of a n element essential to that party's case, and on which that party will bear the burden of p ro o f at trial." Celotex, 477 U.S. at 322. 5

U n d e r Rule 56 of the Federal Rules of Civil Procedure, the court must view the e v id e n c e in the record in the light most favorable to the non-moving party and draw all r e a so n a b l e inferences in favor of that party. Anderson, 477 U.S. at 255. The court must d ec ide not whether the evidence unmistakably favors one side or the other, but whether a f a ir-m in d e d jury could return a verdict for the plaintiff on the evidence presented. Id. at 2 5 2 . If the non-moving party has produced more than a "mere scintilla of evidence" d e m o n s tra tin g a genuine issue of material fact, then the court may not credit the moving p a rty's version of events against the opponent, even if the quantity of the moving party's e v id e n c e far outweighs that of its opponent. Big Apple BMW, Inc. v. BMW of N. Am., Inc ., 974 F.2d 1358, 1363 (3d Cir. 1992).

III.

D IS C U S S IO N D e f en d a n ts maintain the Civic Associations' complaint should be dismissed

b e c au s e the Civic Associations lack standing to bring the action and, in the alternative, th e defendants are entitled to judgment as a matter of law. Regardless whether the Civic A ss o c ia tio n s have standing, their complaint will be dismissed because, as matter of law, th e Defendants' use of the property is not prohibited by the deed restrictions. B. C o n tra c t Law

T h e Civic Associations contend the defendants are in violation of the deed re stric tio n s prohibiting use of the property as a high school, and limiting the restaurant

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a n d residential uses of the property.2 The defendants are entitled to judgment as a matter o f law because Job Corps is not a high school or a restaurant prohibited by the deed re s tric tio n s , and does not involve an impermissible residential use. In Pennsylvania, covenants limiting property use, "although not favored by the la w , are legally enforceable," Fey v. Swich, 454 A.2d 551, 554 (Pa. Super. Ct.1982) (c itin g Rieck v. Virginia Manor Co., 380 A.2d 375, 377 (Pa. Super. Ct. 1977)), and may b e enforced by granting injunctive relief, Perrige v. Horning, 654 A.2d 1183, 1187 (Pa.
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The relevant deed restrictions at issue are as follows:

(a) The Property shall not be used for any of the following either alone or in any combination: bowling alley; fast food type or take-out restaurant, including, but not limited to, restaurant where patrons order food from a service counter only, and/or restaurant where patrons are served in their automobiles: restaurant in which food is only served with self-service buffet; dollar type store and similar stores selling all merchandise at a uniform price; public medical center or clinic, or public health facility; public morgue and/or medical examiner's office; elementary or high school; regularly scheduled casino bus service; taxidermist; hand laundry,- laundry pick up and/or dry cleaning pick-up agency, water booster or sewer substations, railroad passenger stations, electric transforming or gas regulating substations; laundromat; automobile sales; automobile repair shop; installation of automobile, boat, motorcycle or truck parts; bath house or indoor or outdoor swimming pool as a main use; billiards or pool; bottling and/or distribution of liquids for human consumption; central heating plant; garages and parking as a main use; penal and/or correctional institution; sales of live fish, live poultry or live animals for human consumption; selfservice dry cleaning establishment; trolley and cab stations, bus terminals, car and bus barns; This restriction shall not prevent the Property from being used as an indoor farmer's market, cafe, or coffee bar which has outdoor seating. **** (c) Any restaurant use at the Property must operate with dine-in table service with waitstaff. (d) Any residential use at the Property shall be for owner occupied use only. See Defendant's Memorandum at Ex. L, at 1, 2. 7

S u p e r. Ct. 1995) (citing Gey v. Beck, 568 A.2d 672, 675 (Pa. Super. Ct. 1990)). When in te rp re tin g a contract, a court should "ascertain and give effect to the intent of the parties a s reasonably manifested by the language of their written agreement." County of D e la w a re v. J.P. Mascaro & Sons, Inc., 830 A.2d 587, 591 (Pa. Super. Ct. 2003) (citing L id d le v. Scholze, 768 A.2d 1183, 1185 (Pa. Super. Ct. 2001)). Where the agreement is re d u c ed to writing, the writing shall be "the sole evidence of [the parties'] agreement, and p a ro l evidence may not be admitted to vary the terms of the contract in the absence of f ra u d , accident or mistake." Hershey Foods Corp. v. Ralph Chapek, Inc., 828 F.2d 989, 9 9 4 (3d Cir. 1987). The parol evidence rule precludes evidence of negotiations prior to th e execution of the written document to show an intent that varies from the written d o cu m en t. See McGuire v. Scheider, Inc., 534 A.2d 115, 117-18 (Pa. Super. Ct. 1987); W ilm in g to n Trust Co. v. County of Allegheny, No. 05-1737, 2009 WL 904698, at *13-14 (W .D . Pa. Mar. 31, 2009). B e c au s e parole evidence is not permitted where the parties have executed an a g re e m e n t, I will not consider evidence concerning events or discussions prior to the e x e c u tio n of the contract.3 The Civic Associations contend the deed restriction prohibiting a high school was added because the civic leaders believed the community would have too many schools. They allege their "major concern was a school would increase congestion, noise, vandalism, littering, disrespect to the residents and other `quality of life' crimes from elementary and high school age children." See Plaintiff's Reply at 7. The Civic Association alleges this is "surrounding circumstances" not prior "course of dealings." Id. However, even if this was the intent of the Civic Associations, they presented no evidence this was the intent of the Defense Realty. Moreover, even considering the Civic Associations' intent, that intent does not mean Job Corps is a high school. As discussed below, Job Corps does not meet the definition of a high school. See infra Part II.B.1 8
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1.

J o b Corps is not a High School

T h e deed restriction prohibits use of the property as an elementary or high school. It does not prohibit a college or career training center, and does not prohibit use for e d u c a tio n a l purposes, teaching, lecturing, or training. The Pennsylvania legislature, through the Pennsylvania School Code, establishes a n d regulates elementary and secondary education in Pennsylvania. See 24 P.S. 1-101, et s e q .; see also Combs v. Homer-Center School District, 468 F.Supp. 2d 738, 743 (W.D.Pa. 2 0 0 6 ); Pennsylvania Federation of Teachers v. Bd. of Ed. of the School District of P h ila d e lp h ia , 414 A.2d 424, 426 (Pa. Cmwlth. 1980). Local school districts are agents of th e Commonwealth to which the state has delegated the responsibility to provide public e d u c a tio n . Pennsylvania Federation of Teachers, 486 A.2d at 753. The Pennsylvania School Code provides: High schools shall be designated either as junior high schools or senior high sc h o o ls by the Department of Public Instruction when they conform to re g u latio n s promulgated by the Department of Public Instruction in a c c o rd a n c e with standards approved by the State Board of Education. 24 P.S. § 16-1601. In addition, the Pennsylvania School Code regulates the education p ro v id e d by high schools, the curriculum required for graduation, and the professionals p e rm itte d to educate at a high school. The Civic Associations contend Job Corps is a high school because Job Corps' age ra n g e , young adults ages 16 to 24, overlaps with the high school student age range.

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H o w e v e r, many Job Corps enrollees are too old for high school.4 In addition, the P e n n s ylv a n ia School Code prescribes courses of study for high school students and a u th o riz e s the board of school directors in each school district to grant high school d ip lo m a s to students who satisfactorily complete a four year high school program. 24 P .S . § 16-1613. This program includes four years of English, three years of mathematics, th re e years of science, three years of social studies, and two years of arts and humanities. Id. Job Corps does not provide the required four years of English, three years of m a th e m a tics , three years of science, three years of social studies, and two years of arts a n d humanities. In addition, no one at Job Corps is authorized to grant diplomas. The P e n n s ylv a n ia Department of Education does not recognize Job Corps as a high school a n d , even though some of the enrollees are high school age, Job Corps does not meet the re q u ire m e n ts of a high school. T h e Civic Associations also maintain the term "high school" includes facilities s u c h as Job Corps because some attendees are attempting to get their GED, and Job Corps p ro v id e s assistance and classes in this pursuit.5 See Plaintiffs' March 31, 2009 The Civic Associations cite a United States Census Bureau survey of school enrollment which reported 242,000 students from age 20 to 24 were enrolled in school in grades 9 through 12. See Plaintiffs' March 17, 2009 Memorandum at 57 n.3. Regardless, these students apparently were enrolled in high schools as defined above, with a high school curriculum covering all courses required for grades 9 through 12. The Civic Associations maintain the Agreement does not incorporate regulations, and, therefore, the common usage of the term "high school" should apply. Even if I did not consider the regulations, the use still would not be considered a "high school." The Civic Associations cite Webster's Third New Int'l Dictionary 1069 (1993), which defined "high school" as a "secondary school providing academic education or vocational training, and includes schools specializing in adult education that is professional, technical or liberal" and notes the term has been interpreted to include schools which prepare for the GED test. See Hahn, 754 NE.2d at 463 10
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M e m o r a n d u m at 25-26. Although some enrollees take GED courses at the facility, and u se the facility's computers to work on GED materials, Job Corps does not provide all c u rric u lu m courses required of a high school. In addition, the cases relied on by the Civic A s s o c ia tio n s to prove institutions providing GED classes are high schools are not re le v a n t. The cases address when, for the purpose of terminating child support, a high sc h o o l graduation occurs. See Marriage of Mary K. Hahn, 754 N.E.2d 461, 463 (App. Ct. Ill. 2001) (where contract terminated child support when the child graduated from high s c h o o l, and a child received GED when he was eighteen, the court found "graduating f ro m high school" included attaining a GED); Park v. Park, 634 So.2d 83, 86 (La. App. 1 9 9 4 ) (child support obligation continued where major child under 19 years of age was atten d ing a full-time vocational school to attain his high school equivalency diploma); In re Marriage of Copeland, 850 S.W. 2d 422 (Mo. App. 1993) (interpreting statute which c o n tin u e d child support obligations if child enrolls in higher education before the October f o llo w in g the graduation from secondary school, and determining under the statute a tta in in g a GED was equivalent to graduating from a secondary school); L.D. v. K.D., 7 1 6 A.2d 569 (N.J. Super. Ct. 1998) (child support obligation continued for an

(citing Park, 634 So. 2d at 86). In the United States, however, the common usage of "high school" does not include schools "specializing in adult education that is professional, technical or liberal." Rather, Merriam-Webster's Collegiate Dictionary, defines "high school" as "a school esp[ecially] in the [United States usually] including grades [nine through twelve] or [ten through twelve]." Merriam-Webster's Collegiate Dictionary 587 (11th ed. 2005); accord Dictionary.com, High School, available at http://dictionary.reference.com/browse/high+school? from Ask=true&o=100074 (last visited Sept. 25, 2009). 11

u n e m a n c ip a te d nineteen-year old who failed senior year of high school and was in a re sid e n c y drug rehabilitation center earning a GED). They do not discuss whether the in s titu tio n s attended are considered "high schools." A p p ro x im a te ly one-half of the Job Corps trainees received high school diplomas o r GED certificates prior to enrolling at Jobs Corps. Once a person receives a high school d ip lo m a or GED, he or she cannot return to high school. See 22 Pa. Code § 11.27. The C iv ic Associations maintain the enrollees who had obtained their diploma or GED prior to enrolling with Job Corps did not have a high school level education. Therefore, they c o n tin u e d to receive courses in reading, English, math, and science required of those s e e k in g to obtain a GED. See Plaintiff's March 17, 2009 Memorandum at 58. Jobs C o rp s , however, is not a high school merely because it offers some high school level c o u r se s . T h e Civic Associations argue, because the School Code defines "vocational e d u c atio n " as "less than college grade," a school providing vocational education is a high sch o o l. Id. at 59. The vocational schools referenced in the School Code, however, are th o s e established and maintained by school districts.6 See 24 P.S. §§ 18-1806, 18-1807. J o b Corps is a component of the United States Department of Labor, was not established Plaintiffs cite an expert Dr. Matticoli, who compared Job Corps to the curriculum and learning environment of a Comprehensive/Vocational Technical High School and determined Job Corps was a high school because it was designed to achieve the same measures and impart the same level of academic and vocational/technical skills as those promoted in state vocational and technical schools. As discussed above, Job Corps is not a high school merely because it offers some of the same courses offered in high school. In addition, Dr. Matticoli's opinion does not address Job Corps failure to qualify as a high school under the Pennsylvania School Code. 12
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b y the Philadelphia School District, and is neither affiliated with, run by, nor financed by th e Philadelphia School District or the Pennsylvania Department of Education.7 C o n tra ry to the Civic Associations contentions, for the same reasons it is not a h ig h school, Job Corps is not the equivalent of a high school. A use will not be found to v iolate a restriction unless it is "in plain disregard of its express purpose." Jones v. Park L a n e for Convalescents, 120 A.2d 535, 537 (Pa. 1956). The Civic Associations could h a v e sought to prohibit the property's use as a training or career training facility, a v o c a tio n a l educational facility, or other similar uses. The restriction, however, prohibits o n ly use as an "elementary or high school." Because Job Corps' use is not "in plain d is re g a rd of [the restriction's] express purpose," the use does not violate the deed re s tr ic tio n . Interpreting the intent of the parties "as reasonably manifested by the language of th e ir written agreement," J.P. Mascaro & Sons, Inc., 830 A.2d at 591 (citing Liddle, 768 A .2 d at 1185), I find Job Corps is not a "high school" prohibited by the deed restriction. 2. J o b Corps is not a Restaurant

P u rsu a n t to the deed restrictions, restaurants at the property are limited to re sta u ra n ts with "dine-in table service" and "wait-staff." See Defendant's Memorandum a t Ex. L, at 2. The restrictions prohibit fast food and take-out restaurants, counter service re sta u ra n ts , buffet restaurants, and drive-in restaurants. Id., at 1. The deed restrictions do

For certain purposes, such as tort liability, Job Corps enrollees are considered federal employees. See 29 U.S.C. § 2897(a)(4). 13

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n o t prohibit preparing, serving, or eating food. The Civic Associations maintain Job C o rp s' cafeteria and vending area is a restaurant prohibited by the contract. The Civic A ss o c iatio n s maintain a restaurant need not be open to the public, and this cafeteria w o u ld qualify as an "eating house," which is a "restaurant in common parlance." See P la in tif f 's Memorandum at 62 J o b Corps provides a course of study for institutional nutritionists. See D e f en d a n ts ' Memorandum at Ex. M, at ¶ 22. At the facility's institutional kitchen, en rollee s are trained in nutrition, meal planning, and food preparation for health care in s titu tio n s . The food prepared by the enrollees is provided to enrollees free of charge. Faculty members pay a nominal fee of $2.00 to partake in the lunch. The room is not o p e n to the public. Only enrollees and faculty are permitted to eat there. The Philadelphia zoning ordinance defines "restaurant" as: "A use engaged in the p re p a ra tio n and retail sale of food and beverages, including the sale of alcoholic b e v e ra g e s, on non-disposable ware for consumption by patrons on premises, with a m in im u m of thirty (30) seats, and which does not provide live entertainment." Title 14, P h ila. Code, §14-102(d)(114). Webster's II New Riverside University Dictionary (H o u g h to n Mifflin 1988), at 1002, defines a restaurant as "[a] place for serving meals to th e public." MSN Encarta's dictionary defines a restaurant as "a place where meals and d rin k s are sold and served to customers." Http://encarta.msn.com/dictionary_186170147l /re s ta u ra n t.h tm l (last visited September 26, 2009).

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J o b Corps does not provide retail sales of food or beverages, meals are not served to the public, and meals are not sold to customers.8 Although faculty are required to pay $ 2 .0 0 to participate in the lunch, the lunch room is not open to the public. Therefore, Job C o r p s is not a restaurant restricted pursuant to the deed restrictions. C. J o b Corps does not include residences

T h e Civic Associations maintain the defendants also violated the deed re stric tio n prohibiting use of the premises in question for residences other than single f a m ily residences. The Civic Associations, however, do not argue this restriction in their M e m o r a n d u m . In addition, Job Corps does not include dormitories or any other type of re sid e n c es . Defendant's Memorandum at Ex. M. Accordingly, Job Corps does not c o n ta in a prohibited residential use.

IV .

C O N C L U SIO N V ie w in g the facts in the light most favorable to the Civic Associations, and

d ra w in g all reasonable inferences in the Civic Associations' favor, I find, as a matter of la w , the Civic Associations' evidence is insufficient to establish Defendants violated the d e e d restrictions, and no fair-minded jury could return a verdict in their favor. Accordingly, Defendants' Motions for Summary Judgment are granted. A n appropriate order is attached.

The Civic Associations allege the taxpayers pay for the meal. However, even if this is true, a restaurant is a location where people enter expecting to pay for their meal. 15

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