Summary
holding that Commonwealth Court abused its discretion in exercising its equitable power to enjoin the Pennsylvania Department of Transportation from terminating leases
Summary of this case from Vine Street Concerned Citizens, Inc. v. DoleOpinion
Argued November 20, 1981
January 19, 1982.
Equity — Bidding for leases of condemned property — Standing — Jurisdiction of the Board of Claims — Damage remedy.
1. Tenants on condemned property have standing to challenge in equity bidding procedures established for leaseholds in such property when they assert that under the nebulous wording of the bid offering the required common standard for bidders does not exist, and, as present lessees, they are part of one class of bidders with one set of conditions and another class of bidders, non-tenants, enjoy other conditions. [168]
2. Claims arising out of contract with a department of the Commonwealth of Pennsylvania are within the exclusive jurisdiction of the Board of Claims, and where that adequate remedy exists equity will not entertain a claim for damages. [169]
Argued November 20, 1981, before Judges WILLIAMS, JR., MacPHAIL and PALLADINO, sitting as a panel of three.
Original jurisdiction, No. 1397 C.D. 1981, in case of Ezy Parks, Inc.; Fisch's Parking Co., Inc.; Minnie Granato and Liberata Patrizi, t/a Pat's Parking Lot; Independence Hall Parking, Inc.; Winon Jenkins, a/k/a Winton Jenkins, Joseph Provenzano and Billie H. Thomas v. Thomas D. Larson, Secretary, Pennsylvania Department of Transportation; David C. Sims, Deputy Secretary for Highway Administration, Commonwealth of Pennsylvania, Department of Transportation; James I. Scheiner, Deputy Secretary for Administration, Pennsylvania Department of Transportation; Robert L. Rowland, District Engineer for District 6 of the Pennsylvania Department of Transportation; and Commonwealth of Pennsylvania, Department of Transportation. Petition for review in the Commonwealth Court of Pennsylvania seeking to enjoin bidding for leaseholds and for damages. Respondent filed preliminary objections. Held: Preliminary objections dismissed in part and sustained in part.
Michael Sklaroff, with him, Stanley M. Shingles, Schnader, Harrison, Segal Lewis, for petitioners.
Andrew H. Cline, Assistant Counsel, with him, Alexander V. Sarcione, Assistant Chief Counsel, Ward T. Williams, Chief Counsel, and Jay C. Waldman, General Counsel, for respondents.
This Petition for Review in the nature of a complaint in equity was filed to the original jurisdiction of this Court by lessees of certain properties located along Vine Street in Philadelphia. Petitioners pray that we enjoin the Commonwealth of Pennsylvania, Department of Transportation (PennDOT) from entertaining bids for leases on the premises, and declare the improvements on the properties to be personalty of petitioners, or, in the alternative, award damages to petitioners for the value of their leasehold estates and business accoutrements. Presently before us are preliminary objections to the petition, in which PennDOT (1) raises a question of jurisdiction, asserting that the petitioners have an adequate and exclusive remedy at law, (2) argues that the petitioners lack standing, since they are suing as prospectively disappointed bidders and not as taxpayers, and (3) demurs to the allegations of the petition.
Act of May 20, 1937, P.L. 728, as amended, 72 P. S. § 4651-1 et seq.
In ruling on preliminary objections, we bear in mind that such pleading admits as true all well-pleaded facts, and all inferences which may reasonably be deduced therefrom. Department of Transportation v. Pennsylvania Power and Light Co., 34 Pa. Commw. 594, 383 A.2d 1314 (1978). The facts asserted in the Petition for Review indicate that the properties in question were condemned to prepare for the construction of the proposed Vine Street Expressway. Some petitioners are condemnees-in-possession; others acquired their leaseholds through competitive bidding, negotiations, and/or court settlements.
During the several years that the lessees have rented the premises, which are lucrative downtown parking lots, PennDOT has unilaterally raised the rental amount, and the lessees have paid same, allegedly with the stated understanding that the leaseholds would remain theirs until the purpose for which the land was condemned was undertaken.
The petition further indicates that, although both parties to the leases went through the formality of signing the leasing documents on a regular basis, there were oral agreements, frequently made and often-reaffirmed, by which PennDOT officials assured petitioners that their tenure at the pertinent locations would continue until the proposed construction along Vine Street became imminent. In reliance upon those assurances, the lessees made improvements to the parking lots, listed in Exhibit X, which include the installation of blacktop, bumper blocks, ticket splitters, peripheral boundary walls, electrical fixtures, and shelters for lot attendants.
The bid instructions issued by PennDOT stated that the bid would be
for land only, and that all personal property on the premises is assumed to be owned by the present occupant; whether the same be personalty, improvements to the land, or trade fixtures. However, as between PennDOT and present occupant, PennDOT reserves the right to take the position that certain items affixed to the premises are permanent improvements and therefore, the property of PennDOT.
However, petitioners allege that some PennDOT representatives informed individuals who inquired at the published telephone numbers, prior to bidding, that the improvements on the lots were included in the bid offering.
Assuming, as is required by the procedural posture of this case, that such allegations are true, we turn to the preliminary objections of the respondent. Although the petitioners have alleged that they are Pennsylvania taxpayers, PennDOT argues that the bare allegation of such status is insufficient to confer standing, since the real basis upon which they have brought suit is to forestall the loss of their businesses. A potentially disappointed bidder, PennDOT theorizes, cannot be imbued with the standing to challenge any award of bids, and therefore, petitioners do not have the capacity to sue. In arguing that point to the Court, the respondent directs the Court's attention to the "common standard" required for the effective offer of a public bid. The lack of this common standard, although not expressed in the words of art, is the foundation for petitioners' theory that the nebulous wording of the bid offering, or the conflicting interpretation by PennDOT representatives of that wording, present, at minimum, the appearance that they are one class of bidders, and non-tenants are another. This dichotomy is created because the non-tenant bidders do not have to, in some fashion, make allowance for PennDOT's "reservation" of the right to challenge the ownership interest of the valuable trade fixtures, improvements, and personalty on the properties at issue. Petitioners are thus challenging the award of bids because they are challenging the legal substance of an effectively amorphous bid offering. Their objection to that substance is premised on the obvious fact that they, not as taxpayers, but as present lessees, will be most damaged by an illegal award to another entity of the property upon which they conduct their businesses.
PennDOT notes that, in this instance, the bidding revolves around the production of non-tax revenue, rather than the depletion of the public fisc.
This suit was filed prior to the opening or award of any of the bids.
See Steppacher v. Bradley, 73 Dauph. 373 (1959), cited in Altemose v. The Pennsylvania Higher Educational Facilities Authority, 7 Pa. Commw. 596, 300 A.2d 827 (1973). The common standard applies both to the tangibles encompassed by the bid instructions, and to the prospective bidders.
The position of the Court on this issue might well have been different had the petitioners waited until after the award of bids to contest the application of the offering language.
Having resolved the issue of standing in petitioners' favor, we turn to the question of the jurisdiction of this Court to preside over the case, in light of the alleged adequate and alternative remedy of an action before the Board of Claims. That potential action will not be ripe for litigation until a bid is awarded to someone other than a petitioner in the case presently before the Court. Claims arising out of contract are within the exclusive jurisdiction of the Board of Claims. Vespaziani v. Department of Revenue, 40 Pa. Commw. 54, 396 A.2d 489 (1978). Therefore, insofar as claimant/petitioners seek damages, the Court acknowledges that this is not the proper forum to pursue such a remedy, and dismisses that portion of the complaint. However, insofar as the relief sought is the permanent injunction of the awarding of bids on an offer which is alleged to have no common standard applicable to both tenant/bidders and non-tenant/bidders, the petitioners have sought relief from an appropriate forum, and the preliminary objections to jurisdiction are dismissed.
Other issues raised in respondent's brief, but not stated in the pleading which its brief supports, i.e. the preliminary objections, have not been considered by the Court, as being irrelevant to the procedural level of the case.
ORDER
AND NOW, this 19th day of January, 1982, the preliminary objections of the respondent Commonwealth of Pennsylvania, Department of Transportation, in the nature of a demurrer and an objection to petitioners' capacity to sue are dismissed. The preliminary objection to jurisdiction is dismissed insofar as it relates to the injunctive aspects of the action, and is sustained insofar as it relates to the petitioners' alternative prayer for damages.
Petitioners are hereby given leave to amend their petition to delete the improper portions, in a manner consistent with this Opinion.
This decision was reached prior to the expiration of the term of office of Judge PALLADINO.