Zaloga et al v. Borough of Moosic et al

Filing 85

MEMORANDUM & OPINION - Plaintiffs' Motion to Amend will be granted, subject to the following instructions to remove certain paragraphs from the Amended Complaint. Plaintiffs shall remove 1m 12732, 147, 149, and 150-52 from the Amended Complaint. With respect to W150-52, only the portions of those paragraphs referring to contractual rights and adverse credit histories are ordered to be removed. With respect to the allegations that Defendants, including Brazil, deliberately failed to notify P laintiffs that he was filing a municipal lien against them, the Court will allow Plaintiffs to assert a First Amendment Retaliation claim on the conditionthat they allege with specificity that Defendants owed them aduty (whether statutory orotherwise) to provide notice of the filing of the lien. A separate Order follows. Signed by Honorable Robert D. Mariani on 12/5/12. (jfg)

THE UNITED STATES DISTRICT COURT
FOR THE MIDDLE DISTRICT OF PENNSYLVANIA
EDWARD ZALOGA and
JEANNE ZALOGA,
Plaintiffs

v.

3:10·CV·2604

(~IUDGE MARIANI)

BOROUGH OF MOOSIC, et al.,
Defendants
MEMORANDUM OPINION

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I. Introduction

Before the Court is Plaintiffs' Motion Amend the Complaint (Doc. 74) with the

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file their Amended Complaint after complying with the below instructions to remove certain

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paragraphs the Court deems as time-barred, previously dismissed, or futile.

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accompanying proposed Amended Complaint (Doc. 74, Ex. A). For the reasons that follow,

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the Court will grant Plaintiffs' Motion in part and deny it in part. Plaintiffs will be ordered to

II. Background

Plaintiffs file this Motion seeking to add Correctional Care, Inc. ("Correctional Care")

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as a Plaintiff, as well as John Brazil ("Brazil"), Solicitor for the Borough of Moosic, and
Willard Hughes ("Hughes"), Borough Code Enforcement Officer, as Defendants. (Doc. 74,
Ex. A, 1m3, 14, 15). Plaintiffs also seek to separate their Quiet Title/Adverse Possession
claims as individual claims and to add further factual allegations in support of their previous

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claims. (ld. at 1m 163-166 and 167-172).
Principally, Plaintiffs wish to add facts arising since January 2011, when:

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• Hughes and Defendants ignored Plaintiffs' complaints about Jack Williams Tire
CO.'s zoning violations from January 2011 to December 2011. (Id. at W106­
114).
• At the request of Scott Williams (of Jack Williams Tire), Hughes issued a violation
notice to Plaintiffs for an in-ground basketball hoop on their property. The hoop
had been on Plaintiffs' property for thirty years, and Plaintiffs' neighbors who had
similar hoops did not receive violation notices in kind. {Id. at W116-118}.
• In February 2008, Brazil, acting on behalf of Defendants, placed a municipal lien
against Plaintiffs without notice (id. at 1f 71), such that Plaintiffs were denied
credit when they applied for a credit card for their daughter in April 2012. (Id. at 1f
119).
• This same lien allegedly prevented Correctional Care from obtaining a
performance bond, which effectively kept Correctional Care from winning a bid to
provide services to the Northampton County Jail in June/July 2012. (Id. at W
120-23).
• The proposed Amended Complaint also offers background facts in support of
Plaintiffs' First Amendment Retaliation and Substantive Due Process claims:
o allegations that Jack Williams Tire acted in concert with Defendants to

request a modification to the then-approved Plans, with knowledge
that Defendants would deny the proposed modification that would
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benefit Plaintiffs and permit the proposed modifications that would

benefit Jack Williams Tire (id. at W77,81,85);
o the allegation that Defendants received no less than $65,865 in fees,

among other remuneration, from Jack Williams Tire for permits and
other favorable treatment (id. at 1f 69);
o the allegation that Defendants permitted their own expert to testify at a
November 13,2007 hearing, but did not allow Plaintiffs' engineering
expert to testify at that same hearing (id. at 1f 66).

III. Analysis
a. Standard on Motion to Amend Pleading
"The court should freely give leave [to amend] when justice so requires." FED. R. CIV.
P. 15(a)(2). "Nevertheless, adistrict court may exercise its discretion to deny leave to
amend a complaint in situations in which the plaintiff has delayed seeking leave to amend if
the delay is undue, motivated by bad faith, or prejudicial to the opposing party. Estate of
Oliva ex reI. McHugh v. New Jersey, 604 F.3d 788, 803 (3d Cir. 2010) (internal citations and

quotation marks omitted). "Delay is 'undue' when it places an unwarranted burden on the
court or when the plaintiff has had previous opportunities to amend." Id. "[S]ubstantialor
undue prejudice to the nonmoving party ... is the touchstone for the denial of an
amendment." USX Corp. v. Barnhart, 395 F.3d 161, 166 (3d Cir. 2004) (internal citations
and quotation marks omitted). The burden is on the non-moving party to show it would be

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prejudiced by an amended pleading. See, e.g., Arlhur v. Maersk, Inc., 434 F.3d 196,206
(3d Cir. 2006); Justofin

V.

Metro. Life Ins. Co., 372 F.3d 517, 526 (3d Cir. 2004). "A mere

claim of prejudice is not sufficient; there must be some showing that [the non-movant] was
unfairly disadvantaged or deprived of the opportunity to present facts or evidence which it
would have offered had the amendments been timely." Dole V. Arco Chern. Co., 921 F.2d
484, 488 (3d Cir. 1990) (internal citations and punctuation marks omitted).
'''Futility is also a sufficient ground to deny leave to amend," and it "'means that the
complaint, as amended, would fail to state a claim upon which relief could be granted." In re

Merck &Co., Inc. Securities, Derivative &ERISA Litigation, 493 F.3d 393, 400 (3d Cir.
2007). "The District Court determines futility by taking all pleaded allegations as true and
viewing them in a light most favorable to the plaintiff." Winer Family Trust v. Queen, 503

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F.3d 319, 331 (3d Cir. 2007).
b. Discussion

Plaintiffs argue that prejudice is the single most critical factor for a district court to

consider when ruling on a motion to amend a complaint. As such, according to Plaintiffs,
Defendants' failure to argue prejudice entitles Plaintiffs to amend their Complaint. However,
while prejudice is an important factor for a district court to weigh, futility can and is a
sufficient independent basis for denying a motion to amend. See In re Merck & Co., Inc.

Securities, Derivative & ERISA Litigation, 493 F.3d at 400. Because Defendants rely on a
futility argument, Plaintiff is not entitled to amendment as a matter of right.

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To the extent that Defendants do not object to the addition of Correctional Care as a

Plaintiff, Willard Hughes as a Defendant, and the separation of Adverse Possession and
Quiet Title as independent counts, the Court will grant Plaintiffs leave to amend. (See Doc.
74, Ex. A, 1Mf 3,14, 15, 163-66, 167-172).

i. Defendants' Objections to Plaintiffs' Amended Complaint
Rather, Defendants object to only portions of the proposed Amended Complaint.
They argue that (1) that Plaintiffs are re-asserting claims that were previously dismissed by
Judge Munley, speci'fically: 1Mf 126-29 (factual allegations in support of First Amendment
Free Speech claim occurring before December 21,2008), 11138 (factual allegations in
support of claim for failure to investigate alleged zoning violations committed by Jack
Williams Tire), and 1Mf 148-50 {factual allegations of Brazil's role in filing a municipal lien
against Plaintiffs occurring before December 21, 2008 in support of Plaintiffs' First
Amendment Retaliation and Substantive Due Process);1 (2) that Brazil's alleged filing of a
municipal lien against Plaintiffs cannot, as a matter of law, be the basis of a Substantive
Due Process claim and that the lien was flied beyond the Statute of Limitations, and finally,
(3) Brazil is entitled to qualified immunity and should not be made a Defendant to the action.

1. Allegations Previously Dismissed
The Court agrees with Defendants that 1Mf 126-29 (factual allegations in support of
First Amendment Free Speech claim occurring before December 21,2008) previously were

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argument overlaps with argument (2), so the Court will address it in Section 2. below.

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dismissed by Judge Munley and may not be re-asserted by Plaintiffs. In addition, the Court
finds that mr 130-32 also claim Free Speech violations that cannot be resurrected. The
paragraphs once again allege violations of Free Speech rights that occurred during 2007,
well before December 21,2008. As to Plaintiffs' claim that Defendants permitted their nonengineering expert to testify at a November 2007 hearing but would not allow Plaintiffs'
engineering expert to testify at that same hearing (mr 66, 127), such an allegation clearly is
precluded by Judge Munley's dismissal of the First Amendment Free Speech claim as
untimely. (Doc. 26, at 15-22). As such, the Court directs that Plaintiffs remove mr 127-132
from their Amended Complaint.

1f 66 may remain for background purposes only.

With respect to Defendants' argument that Judge Munley previously dismissed 1f 138
(failure to investigate reported zoning violations), the Court finds that Plaintiffs may amend
their Complaint to include this factual allegation. Judge Munley dismissed (timely)
allegations that Defendants failed to investigate Plaintiffs' reports of Jack Williams Tire's
violation of zoning ordinances under Plaintiffs' Substantive Due Process claim. Plaintiffs,
however, are now adding this allegation to their First Amendment Retaliation claim. The
Court further notes that the alleged acts took place from January 2011 to December 2011
(Doc. 74, Ex. A, mr 106-114). Thus, they are within the Statute of Limitations.
2. Brazil's Filing of Municipal Lien Against Plaintiffs
Plaintiffs argue that the factual allegations with respect to Brazil's role in filing a
municipal lien without notice against Plaintiffs constitutes retaliatory conduct which

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adversely impacted Correctional Care's bid for a contract with Northampton County Jail.

Though the act took place in February 2008, beyond the Statute of Limitations, Plaintiffs
argue that they discovered the lien only in April 2012 when they applied for credit on behalf
of their daughter or when they were denied or in June/July 2012 when they attempted to
obtain a performance bond to submit a bid on a project to Northampton County Jail. As
such, according to Plaintiffs, they are entitled to rely on this alleged event to support their
First Amendment claim.
The "general rule" is that "a cause of action accrues, and thus the applicable
limitations period begins to run, when an injury is inflicted." Wilson v. EI-Daief, 964 A.2d
354,361 (Pa. 2009). However, the "discovery rule," one exception to the general rule, "may
operate to toll the statute of limitations until the plaintiff discovers, or reasonably should
discover, that she has been injured and that her injury has been caused by another party's
conduct." Id. at 361-62. It is, however, the plaintiffs duty to "exercise [] reasonable
diligence, to know that he is injured and by what cause." Fine v. Checcio, 870 A.2d 850,
858 (Pa. 2005). "Whether the statute of limitations has run on aclaim is a question of law
for the trial court to determine; but the question as to when a party's injury and its cause
were discovered or discoverable is for the jury." Id. at 859. "Where, however, reasonable
minds would not differ in finding that a party knew or should have known on the exercise of
reasonable diligence of his injury and its cause, the court determines that the discovery rule
does not apply as a matter of law." Gleason v. Borough of Moosic, 15 A.3d 479, 485 (Pa.

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2011). "[T]he party asserl:ing application of the discovery rule bears the burden of proof."

Id.
According to the proposed Amended Complaint, Brazil filed a municipal lien without
notice2 against Plaintiffs in February 2008. They did not discover the lien until they were
denied credit in April 2012 or when they were unable to obtain a performance bond to
complete a bid for Northampton County Jail in June/July 2012. Though Defendants claim
that Plaintiffs should have been aware of the lien (and were, in fact, aware of it because the
notice was on public record), and though Defendants are skeptical that Correctional Care
could have operated for four years without knowledge of a lien, the Court cannot conclude
that four years is an unreasonable period of time as a matter of law. Whether it is
reasonable for Plaintiffs to have taken over four years to discover a lien against them in their
credit history is an issue of fact to be resolved after further development of the record.
However, Plaintiffs do not state what obligation Defendants breached by allegedly
failing to give them notice of the lien's filing. Therefore, the Court will permit Plaintiffs to
assert that Defendants, including Brazil, filed a municipal lien against them without notice to
support their First Amendment Retaliation claim on the condition that they first allege, with
specificity and in non-conclusory fashion, when, how, and on what basis they were entitled

2 The lien was for $1,178.65 (see attached). Plaintiffs do not dispute the validity of the lien, only that
Defendants failed to give them notice of the lien's filing.

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to receive notice of the lien (whether pre- or post-filing), which allegedly was filed without

notice to them.3
The same does not hold true for Plaintiffs' Substantive Due Process claim based on
the same factual allegations. For the same reasons Judge Munley gave previously,
Plaintiffs "have not alleged interference with a fundamental interest [in Correctional Care's
contract with Lackawanna County] and have not stated a substantive due process claim."
(Doc. 26, at 33). Plaintiffs' claim is even weaker than the original Complaint; previously,
Judge Munley held that Plaintiffs had failed to show a fundamental interest in an extant
contract with Lackawanna County. Plaintiffs now claim that Defendants' actions, through
Brazil, interfered with a potential contract with Northampton County. Again there is no
fundamental interest implicated. Consequently, the allegation that Brazil filed a municipal
lien against Plaintiffs without notice will support a claim only for First Amendment
Retaliation. Thus, Plaintiffs shall remove ~~ 149-152 (but only to the extent ~~ 150-52
allege violations of contractual rights causing Plaintiffs to suffer adverse credit histories).
In addition, Judge Munley previously dismissed the factual allegations of failure to
investigate zoning ordinance and code violations as insufficient to state a claim for
Substantive Due Process violations. (Doc. 26, at 29) (concluding that "such complaints
3 In pennitting this amendment, the Court notes that Iqbal requires a plaintiffs pleadings to state "plausible
claim[s] for relief." Ashcroft v. Iqbal, 556 U.S. 662, 679, 129 S. Ct. 1937, 1949, 173 L. Ed. 2d 868 (2009)
(emphasis added). Plaintiffs allege that they were unaware of a lien against their property for over four years and
that though they first became aware of it in April 2012, they did not resolve the lien before submitting a bid in
June/July 2012 for a contract that potentially would have yielded "$19.9 million to $26.4 million over a five year
period." (Doc. 74, Ex. A, ~ 123). Though it seems implausible that Plaintiffs would not have paid the lien before
submitting a bid that would have produced millions of dollars to Correctional Care, the Court will reluctantly allow
Plaintiffs to amend their Complaint to add these factual allegations.

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represent the kind of disagreement that is frequent in planning disputes" and determining
that recognizing such a claim "would transform a federal court into a super zoning tribuna!.")
(citations and quotation marks omitted). As such, Plaintiffs shall remove 1f 147 from the
Amended Complaint, as well. Nevertheless, these allegations will suffice to support the
claim of Retaliation.

3. Whether Brazil is Entitled to Qualified Immunity
Lastly, Defendants argue that Brazil, as Solicitor of the Borough, is entitled to
qualified immunity. At this time, the Court will deny without prejudice qualified immunity to
Defendant Brazil.
Qualified immunity is "an entitlement not to stand trial or face the other burdens of
litigation." Mitchell v. Forsyth, 472 U.S. 511, 526, 105 S. Ct. 2806, 86 L.Ed.2d 411 (1985).
The Supreme Court has indicated that, preferably, the issue of qualified immunity "ordinarily
should be decided by the court long before trial." Hunter v. Bryant, 502 U.S. 224, 228, 112
S.Ct. 534,116 L.Ed.2d 589 (1991). However, the Third Circuit has recognized that this
preference sometimes must give way to the realities of a case's development. In response
to Hunter, the Third Circuit said:
That is well and good when there are no factual issues in a case, but often
the facts are intensely disputed, and our precedent makes clear that such
disputes must be resolved by ajury after a trial. As a practical matter, then, in
such cases the immunity becomes no more than a mere defense, and a
sometimes challenging one to establish at that.

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Curley v. Klem, 499 F.3d 199,208 (3d Cir. 2007) (internal citations omitted). Thus, though

this Court also would prefer to resolve the issue of qualified immunity "long before trial," it
cannot do so because at this stage of the case, Plaintiffs have alleged sufficient facts to
prevent a finding at this time that Brazil is entitled to qualified immunity. Plaintiffs have
alleged that Brazil sent the two anonymous men to Plaintiffs' residence to harass and
intimidate them and that he filed the municipal lien against them without notice, all in
retaliation for Plaintiffs' exercise of protected activities.
Defendants rely on Filarsky v. Delia, 132 S. Ct. 1657, 182 L. Ed. 2d 662 (2012) for
the proposition that Brazil is entitled to qualified immunity because Filarsky recognized that
a private individual temporarily retained by the government to perform public services could
seek and obtain qualified immunity. The Court agrees that qualified immunity is available to
Brazil, but at this time, it is premature for the Court to grant such immunity to him. Plaintiffs
have alleged that Brazil directed two anonymous men to harass and intimidate Plaintiffs at
Plaintiffs' residence and in support of that contention, attached two documents to their
motion. (Doc. 74, Ex. C). These documents show, however, only that Brazil received a
letter from Design Consultants and that he forwarded the letter to Defendant Mercatili,
nothing more. If discovery produces no further evidence of Brazil's role in sending these
"anonymous men" to Plaintiffs' residence to harass and intimidate Plaintiffs, the Court will
grant qualified immunity to Brazil and dismiss him 'from the case. At this time, however, the
Court will deny without prejudice qualified immunity for Brazil.

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ii. Final Observation
Finally, the Court notes that the events alleged in 1f1f 21-90 all contain facts
concerning events occurring before December 21, 2008, including, inter alia, the allegation
about Jack Williams Tire paying at least $65,865 to obtain special treatment from
Defendants and Jack Williams Tire's conspiracy to request modification of the Berm when it
knew Defendants would deny the proposed modification that would benefit Plaintiffs and
permit the proposed modifications that would benefit Jack Williams Tire. (Doc. 74, Ex. A, 1m
69,77,81,85). Because Defendants have not objected to these paragraphs specifically,
the Court will permit these amendments. However, the Court will not permit Plaintiffs to rely
on these time-barred allegations to support their remaining claims of Retaliation,
Substantive Due Process, Conspiracy (§ 1983 and civil), Adverse Action, or Quiet Title.
They are for background purposes only.
IV. Conclusion
Plaintiffs' Motion to Amend will be granted, subject to the following instructions to
remove certain paragraphs from the Amended Complaint. Plaintiffs shall remove 1m 127­
32, 147, 149, and 150-52 from the Amended Complaint. With respect to W150-52, only
the portions of those paragraphs referring to contractual rights and adverse credit histories
are ordered to be removed. With respect to the allegations that Defendants, including
Brazil, deliberately failed to notify Plaintiffs that he was filing a municipal lien against them,
the Court will allow Plaintiffs to assert a First Amendment Retaliation claim on the condition

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that they allege with specificity that Defendants owed them a duty (whether statutory or
otherwise) to provide notice of the filing of the lien. A se

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