Court Opinion

ID: 9387903
Source: CourtListenerOpinion
Date Created: 2023-04-19 14:07:11.16503+00
Date Added: 2024-06-11T17:18:16.169173
License: Public Domain

IN THE COMMONWEALTH COURT OF PENNSYLVANIA

Prestige Design on Germantown LLC              :
and Prestige Design and Construction           :
LLC,                                           :    No. 245 C.D. 2022
                   Appellants                  :
                                               :    Submitted: March 6, 2023
              v.                               :
                                               :
City of Philadelphia                           :

BEFORE:
              HONORABLE PATRICIA A. McCULLOUGH, Judge
              HONORABLE ELLEN CEISLER, Judge
              HONORABLE LORI A. DUMAS, Judge

OPINION NOT REPORTED

MEMORANDUM OPINION
BY JUDGE McCULLOUGH                                          FILED: April 19, 2023

              Prestige Design on Germantown, LLC and Prestige Design and
Construction, LLC (collectively, Prestige) appeal from the March 9, 20221 order of the
Court of Common Pleas of Philadelphia County (trial court), which denied Prestige’s
Motion for Preliminary Injunction and dismissed Prestige’s Complaint. Upon review,
we vacate and remand for further proceedings.

                      I.     FACTS AND PROCEDURAL HISTORY
              The relevant facts of this appeal stem from a procedural challenge to the
public notice of Philadelphia City Council (City Council) Bill number 210667 (Bill).

       1
        We note that the trial court’s order states March 9, 2021; however, the order is timestamped
March 9, 2022.
The Bill was introduced by the City Council on September 17, 2021, and referred to
the Committee on Rules the same day. The Bill sought to amend Section 14-529
(Ordinance) of the Philadelphia Zoning Code2 to prohibit or restrict certain height and
density bonuses, including the mixed income housing bonus. (Reproduced Record
(R.R.) at 55a-56a.)
              On October 7, 2021, the City Council caused notice to be published in the
Philadelphia Inquirer and the Legal Intelligencer notifying the public that the City
Council’s Committee on Rules was considering the Bill. The Bill was voted out of the
Committee on Rules on October 26, 2021. A first reading took place on October 28,
2021, with a second reading on November 4, 2021. The City Council passed the Bill
on November 4, 2021. On November 17, 2021, Mayor James Kenney signed the Bill
into law and per its terms, the ordinance prohibiting or restricting certain height and
density bonuses, including the Ordinance, went into effect immediately.
              On December 1, 2021, Prestige entered into an agreement to purchase two
adjoining parcels located at 2059 and 2061-63 Germantown Avenue (Germantown
Properties). Prestige signed an agreement of sale for a third parcel at 1525 N. 7th Street
on December 10, 2021 (1525 Property). The real estate closings took place on
December 31, 2021, for the Germantown Properties and on January 12, 2022, for the
1525 Property. Prestige alleges that it conducted due diligence before the purchases
and did not become aware of the Bill or the Ordinance. (R.R. at 11a-12a.)
              Prestige submitted a zoning permit application to the Department of
Licenses and Inspections (Department) on January 12, 2022, seeking to use the mixed
income housing bonus. The Department informed Prestige that the bonus was no

       2
         Phila., Pa. Zoning Code (2012), https://codelibrary.amlegal.com/codes/philadelphia (last
visited April 18, 2023).

                                               2
longer available due to the Ordinance and issued a refusal. Prestige did not appeal this
refusal or seek a zoning variance.
              On February 10, 2022, Prestige filed a Complaint in Equity (Complaint)
against the City of Philadelphia (City), alleging inadequate and defective notice of the
consideration and passage of the Bill, which removed Prestige’s ability to develop the
Germantown Properties and the 1525 Property with the mixed income bonus, and other
property rights and due process violations. In its Complaint, Prestige sought permanent
injunctive relief requiring the City to review Prestige’s zoning application under the
Zoning Code as it existed before the Ordinance was enacted. (R.R. at 15a.) Prestige
also filed a Motion for Preliminary Injunction (Motion) on the same day. The City
filed a response to the Motion on March 7, 2022.
             On March 9, 2022, based solely on the filings and without any evidentiary
hearing, the trial court denied the Motion and dismissed the Complaint because “the
entirety of the relief sought in the Complaint is identical to the relief sought in the
Motion.” (R.R. at 177a.) In its Pa. R.A.P (Rule) 1925(a) Opinion, the trial court
concluded that “Prestige’s [Motion] and Complaint suffer from the same fatal defect –
Prestige cannot establish a likelihood of success on the merits or a clear right to relief,
as a matter of law. . . .” (Trial Ct. Rule 1925(a) Op. at 4.) The trial court determined
that under Section 5571.1 of the Judicial Code, 42 Pa.C.S. § 5571.1, any appeal to the
court of common pleas alleging a defect in the process or procedure regarding the
enactment of an ordinance must be brought within 30 days of the effective date of the
ordinance. Because Prestige did not file the Complaint within 30 days of November
17, 2021, the trial court concluded that the Complaint and Motion were untimely.
             Subsequently, Prestige timely appealed to this Court.

                                            3
                                           II.     ISSUES
                On appeal,3 Prestige raises two procedural issues: (1) whether the trial
court erred in denying its Motion without a hearing and (2) whether the trial court erred
in dismissing its Complaint.4

                                       III.      DISCUSSION
    A. Denying Prestige’s Motion without a Hearing
                Prestige first contends that the trial court erred by denying its Motion
without an evidentiary hearing, which the trial court determined “would not aid in the
resolution of the [purely legal] issues.” (Trial Ct. Rule 1925(a) Op. at 6.) Prestige
asserts that without being able to present any evidence, it could not prove irreparable
harm, a necessary element for preliminary injunctions.

        3
        Our scope of review is limited to determining whether constitutional rights were violated,
whether an error of law was committed, and whether findings of fact are supported by substantial
evidence. Ellis v. Unemployment Compensation Board of Review, 59 A.3d 1159, 1162 n.2 (Pa.
Cmwlth. 2013).

        4
         Prestige’s arguments have been condensed and reordered for the sake of clarity and ease of
discussion. In its brief, Prestige lists the following three issues under the statement of questions
involved:
               (1) Whether the trial court abused its discretion and committed an error
                   of law by dismissing Prestige’s entire Complaint and entire action
                   while simultaneously denying Prestige’s Motion without any
                   evidentiary hearing or trial.
               (2) Whether the trial court abused its discretion and committed an error
                   of law in denying Prestige’s Motion without holding any evidentiary
                   hearing or any hearing at all.
               (3) Whether the trial court violated Prestige’s procedural and
                   substantive due process rights under the Pennsylvania and United
                   States Constitutions by dismissing Prestige’s Motion and entire
                   action without any evidentiary hearing at all.

(Prestige’s Br. at 3.)

                                                  4
              To begin, appellate review of a preliminary injunction is “highly
deferential” and is limited to determining whether the trial court abused its discretion.
Summit Towne Centre, Inc. v. Shoe Show of Rocky Mount, Inc., 828 A.2d 995, 1000
(Pa. 2003). The Supreme Court has stated that this means the appellate court will not
inquire into the merits of the controversy, but only examine the record to determine if
there were any apparently reasonable grounds for the action of the court below. Id.
“Only if it is plain that no grounds exist to support the decree or that the rule of law
relied upon was palpably erroneous or misapplied will we interfere with the decision
of the [trial court].” Id.
              The purpose of a preliminary injunction is to “preserve the status quo and
prevent imminent and irreparable harm” until the merits of the underlying complaint
in equity can be decided. Berger by and through Berger v. West Jefferson Hill School
District, 669 A.2d 1084, 1085 (Pa. Cmwlth. 1995). The trial court must not grant a
preliminary injunction unless the petitioning party has satisfied the following elements:

              (1) the injunction is necessary to prevent immediate and
              irreparable harm that cannot be adequately compensated by
              damages; (2) greater injury would result from refusing an
              injunction than from granting it, and, concomitantly, the
              issuance of an injunction will not substantially harm other
              interested parties in the proceedings; (3) the injunction will
              properly restore the parties to their status as it existed
              immediately prior to the alleged wrongful conduct; (4) the
              party seeking the injunction is likely to prevail on the merits;
              (5) the injunction is reasonably suited to abate the offending
              activity; and (6) the injunction will not adversely affect the
              public interest.

Lindeman v. Borough of Meyersdale, 131 A.3d 145, 151 (Pa. Cmwlth. 2015) (citing
Dragoni v. Borough of Ambler, 37 A.3d 27, 31 (Pa. Cmwlth. 2012)).

                                            5
              Additionally, Pennsylvania Rule of Civil Procedure 1531 provides, in
pertinent part:
             A court shall issue a preliminary or special injunction only
             after written notice and hearing unless it appears to the
             satisfaction of the court that immediate and irreparable injury
             will be sustained before notice can be given or a hearing held,
             in which case the court may issue a preliminary or special
             injunction without a hearing or without notice.              In
             determining whether a preliminary or special injunction
             should be granted and whether notice or a hearing should be
             required, the court may act on the basis of the averments of
             the pleadings or petition and may consider affidavits of
             parties or third persons or any other proof which the court
             may require.
Pa.R.Civ.P. 1531(a). Thus, although Rule 1531(a) permits a trial court to grant a
preliminary injunction absent a hearing in certain circumstances, it does not similarly
permit a court to deny a motion for a preliminary injunction without first conducting a
hearing. See Beck Computing Services Inc. v. Anderson, 524 A.2d 990, 992 (Pa. Super.
1987) (holding the trial court erred in denying preliminary injunction without a hearing
when the trial court “lacked a sufficient factual basis for determining whether or not
the other prerequisites for injunctive relief were present”).5 A refusal to grant an
evidentiary hearing on a preliminary injunction will be reversed when it constitutes an
abuse of discretion. Commonwealth v. Schall, 297 A.2d 190, 191-92 (Pa. Cmwlth.
1972).

       5
        Although Superior Court cases are not binding on this Court, such cases may offer persuasive
precedent where they address analogous issues. Commonwealth v. Monsanto Co., 269 A.3d 623, 679
n.20 (Pa. Cmwlth. 2021). The Superior Court cases cited herein are relied on for their persuasive
value.

                                                 6
             Although there is no absolute right to a hearing on a preliminary
injunction, it is the preferred procedure. Sedor v. West Mifflin School District, 713
A.2d 1222 (Pa. Cmwlth. 1998) (citing Bell Fuel Corp. v. Cattolico, 544 A.2d 450, 455
(Pa. Super. 1988)); see also Boyd v. Cooper, 410 A.2d 860 (Pa. Super. 1979) (holding
the trial court erred in denying an injunction without holding an evidentiary hearing to
allow proof of irreparable harm and lack of an adequate remedy at law). The Bell court
stated that “[i]t is the rare preliminary injunction that can correctly be denied
without a hearing . . . .” Bell, 544 A.2d at 455 (emphasis added). In Bell, the Superior
Court noted that the trial court had assumed and found certain facts as the requesting
party had alleged. Id. Then, based on those assumed facts, incorrectly decided several
critical issues and, therefore, the Superior Court found it was necessary to remand for
a hearing. Id.
             Here, the trial court concluded that the Motion before it presented “purely
legal issues” and determined that an evidentiary hearing would not aid in the resolution
of the Motion. (Trial Ct. Rule 1925(a) Op. at 6.) Prestige not only has alleged improper
notice of the pending Bill, but also alleged that even if the City complied with its own
notice requirements, such requirements were still insufficient to satisfy procedural due
process rights under the United States and Pennsylvania Constitutions. Prestige was
not provided an opportunity to present any evidence or testimony regarding the
improper notice of the pending ordinance changes, the irreparable harm, the adverse
impact of its property rights, and the lack of an adequate remedy of law. By not holding
a hearing to ascertain facts and make a record, the trial court had to resolve issues of
fact. Therefore, after reviewing the pleadings and sparse record before the trial court,
we conclude that the trial court abused its discretion in denying the Motion without an
evidentiary hearing.

                                           7
   B. Dismissing Prestige’s Complaint without Hearing
             Prestige argues secondly that the trial court erred in dismissing the entire
Complaint after considering only the Motion. Prestige contends that the trial court’s
statement that “the relief sought in the Complaint is identical to the relief sought in the
Motion” is a mischaracterization, as the Motion requested temporary relief and the
Complaint requested permanent relief. (Prestige’s Br. at 16.) Prestige further asserts
that temporary and permanent relief have different standards of review.
             After a preliminary injunction is awarded or denied, the case proceeds for
a final hearing on the merits. Soja v. Factoryville Sportsmen’s Club, 522 A.2d 1129,
1131 (Pa. Super. 1987). The preliminary injunction proceeding is distinct from the
final hearing on the merits. Kee v. Pennsylvania Turnpike Commission, 743 A.2d 1129,
1131 (Pa. Cmwlth. 1999). A preliminary injunction requires imminent, irreparable
harm, while a permanent injunction is founded on the lack of an adequate remedy. City
of Chester v. Chester Redevelopment Authority, 686 A.2d 30, 35 (Pa. Cmwlth. 2015).
Additionally, whether a preliminary injunction is granted or denied has no effect on
whether a final, permanent injunction will be ultimately issued. Id. Consequently, we
have held that it is inappropriate for a court to treat a hearing for a preliminary
injunction as a final hearing on a request for a permanent injunction unless the parties
stipulate to the contrary. Berger, 669 A.2d at 1084. This is because “[i]t is . . . unfair
to reach a final decision after a preliminary proceeding. A litigant may not prepare as
completely as he would have had he realized that he was not going to receive a second
chance to present his case.” City of Chester, 686 A.2d at 35 (citing Soja, 522 A.2d at
1133).
             Here, there is no information in the record to indicate that Prestige and the
City stipulated to proceed to a final decision on the merits as part of the Motion. In

                                            8
fact, Prestige and the City refer to the proceeding as only a request for preliminary
relief. Nevertheless, the trial court engaged in a substantive analysis on the merits,
regarding the timeliness of the Complaint and the notice requirements of the Bill. By
dismissing Prestige’s Complaint, the trial court inappropriately rendered a final
determination when only the Motion was before it.            The entire purpose of a
preliminary injunction is to preserve the status quo and prevent imminent and
irreparable harm until the merits of the underlying complaint in equity can be
decided. Integrating the Motion with the Complaint without a hearing denied
Prestige the opportunity to prepare and present its case.
             Accordingly, we conclude that the trial court erred by dismissing the
Complaint without a hearing or full consideration on the merits.

                                 IV.    CONCLUSION
             For these reasons, we vacate the trial court’s order, and remand this matter
to the trial court with instructions to reinstate Prestige’s Complaint and conduct a
hearing on Prestige’s Motion in accordance with this opinion.

                                           ________________________________
                                           PATRICIA A. McCULLOUGH, Judge

                                           9
             IN THE COMMONWEALTH COURT OF PENNSYLVANIA

Prestige Design on Germantown LLC         :
and Prestige Design and Construction      :
LLC,                                      :    No. 245 C.D. 2022
                   Appellants             :
                                          :
             v.                           :
                                          :
City of Philadelphia                      :

                                      ORDER

             AND NOW, this 19th day of April, 2023, the March 9, 2022 order of
the Court of Common Pleas of Philadelphia County (trial court) is hereby
VACATED.          This matter is REMANDED to the trial court for proceedings
consistent with this opinion.
             Jurisdiction relinquished.

                                              ________________________________
                                              PATRICIA A. McCULLOUGH, Judge