Court Opinion

ID: 4187726
Source: CourtListenerOpinion
Date Created: 2017-07-20 13:19:36.413309+00
Date Added: 2024-06-11T14:40:07.301107
License: Public Domain

IN THE COMMONWEALTH COURT OF PENNSYLVANIA

Cardinal Crossing GP, LLC t/a         :
Cardinal Crossing Realty              :
Associates, L.P.,                     :
                         Appellant    :
                                      :
                   v.                 :   No. 1741 C.D. 2016
                                      :
Marple Township                       :
                                      :
Cardinal Crossing GP, LLC t/a         :
Cardinal Crossing Realty              :
Associates, L.P.                      :
                                      :
                   v.                 :   No. 1781 C.D. 2016
                                      :   Argued: May 1, 2017
Marple Township,                      :
                        Appellant     :

BEFORE:     HONORABLE MARY HANNAH LEAVITT, President Judge
            HONORABLE RENÉE COHN JUBELIRER, Judge
            HONORABLE MICHAEL H. WOJCIK, Judge

OPINION NOT REPORTED

MEMORANDUM OPINION BY
JUDGE COHN JUBELIRER                      FILED: July 20, 2017

      Cardinal Crossing GP, LLC t/a Cardinal Crossing Realty Associates, L.P.
(Cardinal Crossing) appeals from the Order of the Court of Common Pleas of
Delaware County (common pleas) sustaining the demurrer filed by Marple
Township (Township) and dismissing, with prejudice, Cardinal Crossing’s
Complaint seeking monetary damages from Township. Township has also filed a
cross appeal. At issue is whether a developer who spends substantial funds on a
development, in reliance on statements of support from a committee formed by the
Township which includes Township officials, can recover damages from the
Township when the Board of Commissioners (Board) does not adopt the requested
zoning amendment. Because re-zoning is a legislative act, which requires official
action of a majority of the Board during a public meeting, unofficial action by
Township officials cannot bind the Township to take legislative action; we
therefore affirm.
      Cardinal Crossing filed its Complaint on August 29, 2016, asserting the
following factual averments, which are accepted as true for the purposes of ruling
on a demurrer. Palmer v. Bartosh, 959 A.2d 508, 512 n.2 (Pa. Cmwlth. 2008). In
April 2013, the Catholic Archdiocese of Philadelphia (Archdiocese) met with
Township representatives about its intent to sell approximately 213 acres of
undeveloped land it owns in the Township (Property) for a mixed-use
development. Thereafter, Archdiocese solicited purchase offers to develop the
Property. One type of purchase option, the “Approvals Contingency” option,
provided for cash sale subject to development approval contingencies, but required
a non-refundable deposit of five million dollars. (Compl. ¶¶ 9-10.) Although
Township was aware Archdiocese intended to sell the Property for mixed-use
development, which would require an amendment to the Property’s existing zoning
classification, Township did not express any opposition to the planned mixed-use
development.
      In January 2014, Township created the “Marple Township Economic
Development & Smart Growth Committee” (Development Committee), which was

                                        2
chaired by Commissioner Joseph Ruffo and included as members Commissioners
Robert Fortebuono and John Lucas.       (Id. ¶¶ 14-15.)   The Township’s Board
discussed the Property’s development at its February 10, 2014 meeting and that the
Development Committee was to meet with developers to “consider private issues”
related to proposed development. (Id. ¶ 16.) On July 18, 2014, Cardinal Crossing
met with the Development Committee and other Township representatives and
presented its conceptual layout for the development, which included 1,100,000
square feet of commercial/office space and 375 townhomes. Cardinal Crossing
requested that if the proposed development was not going to be allowed, it should
be told now before it finalized the purchase agreement and put up the substantial,
non-refundable deposit. The various representatives indicated their support and
acknowledged that the zoning would have to be changed. Cardinal Crossing asked
whether the proposed development had the full support of the Board and was told
it did if Commissioner Lucas supported it. Cardinal Crossing executed a sales
agreement for the Property in the amount of $47 million on September 2, 2014.
      Between August 14, 2014, and Spring 2016, Cardinal Crossing met with
various Township representatives to discuss the proposed development and the
necessary amendments to the zoning ordinance and Township’s Comprehensive
Plan. These individuals expressed support even though there was community
opposition, and the Delaware County Planning Commission intended to issue a
review critical of the proposed zoning amendments. On May 21, 2015, Cardinal
Crossing formally submitted the proposed zoning amendments, a zoning map
change, and its fully-engineered preliminary plan application (Application), which
was prepared at the Township’s Solicitor’s request despite Cardinal Crossing’s
concern about doing so before the approval of the zoning change. During this time

                                        3
period, Cardinal Crossing paid the required five million dollar deposit, all of which
became non-refundable on June 8, 2015, and spent more than two million dollars
on the Application and proposed zoning amendments.
      Beginning in late summer and early fall of 2015, community opposition to
the proposed development began to grow.           Cardinal Crossing presented its
Application at Township’s Planning Commission meetings on December 3, 2015,
and January 13, 2016, which was met with community opposition. Following
these meetings, Cardinal Crossing again met with certain Township representatives
who now indicated there were traffic problems and the proposed plan “may[]be too
dense.”   (Compl. ¶ 95.)       The Township’s Planning Commission voted to
recommend denying the proposed zoning amendments and Application. At its
May 11, 2016 meeting, a majority of the Board voted not to recommend rezoning
the Property. Due to the change in Township’s position, Cardinal Crossing did not
have time to submit an alternative plan before its agreement of sale with the
Archdiocese expired on July 1, 2016.
      In the single count of the Complaint, Cardinal Crossing asserts:           the
Township representatives, with whom it met with the authorization of Township,
repeatedly represented that Township wanted the Property developed as proposed;
Township knew or should have known Cardinal Crossing would rely upon these
representations; and it reasonably relied upon these representations to execute the
agreement of sale, pay the deposits, and prepare the Application and zoning
amendments to its detriment. (Id. ¶¶ 102-15.) Cardinal Crossing alleged it spent

                                         4
more than seven million dollars relying on these representations and sought to
recover that amount from Township based on a theory of promissory estoppel.1
       Township filed preliminary objections (POs) to the Complaint, as well as a
Memorandum of Law in support. In its demurrer, Township argued that although
Cardinal Crossing averred it relied upon the statements of various Township
representatives, those representatives had no authority to “opine on land
development applications or zoning code text amendments” because, pursuant to
The First Class Township Code,2 only the Board could take official action on
Township’s behalf through a majority vote at a public meeting. (Township’s POs
¶¶ 5-6, 12-13.) Because there was no allegation a majority of the Board ever told
Cardinal Crossing to act as it did, made any representations or promises to
Cardinal Crossing, or took any official action other than the May 11, 2016 vote,
Cardinal Crossing’s reliance on the alleged unofficial representations was not
reasonable.3     Cardinal Crossing filed a response to Township’s POs and a
Memorandum of Law in support.
       Without holding oral argument, common pleas issued its Opinion and Order
on October 11, 2016, sustaining Township’s demurrer because, based on the facts
pleaded in the Complaint, it was certain under the law that no recovery was

       1
          To state a claim for promissory estoppel, a plaintiff must allege the following: “(1) the
promisor made a promise that would reasonably be expected to induce action or forebearance on
the part of the promise; (2) the promisee actually took action or refrained from taking action in
reliance on the promise; and (3) injustice can be avoided only by enforcing the promise.” Peluso
v. Kistner, 970 A.2d 530, 533 (Pa. Cmwlth. 2009).
        2
          Act of June 24, 1931, P.L. 1206, as amended, 53 P.S. §§ 55101-58502.
        3
          Township asserted several other POs, including that the promissory estoppel claim was
barred by the act commonly known as the Political Subdivision Tort Claims Act, 42 Pa. C.S.
§§ 8541-8542. Cardinal Crossing filed a PO asserting this affirmative defense could only be
raised in New Matter. Common pleas overruled Township’s PO for this reason, which is the
basis for Township’s cross-appeal to this Court.

                                                5
possible. Common pleas explained its decision as follows. Although Cardinal
Crossing received various statements of support from various Township
representatives through the land use development process, no statement of these
representatives could rise to the level of an inducement or promise by Township.
(Common Pleas Op. (Op.) at 4-5.) Cardinal Crossing knew the enactment of a
zoning amendment was a legislative act that would be binding only upon a vote of
the Board. Finding statements of support by municipal officials prior to final
legislative action to constitute inducements that would give an applicant
enforceable rights would effectively remove the decision from the governmental
body charged with enacting the legislation, and common pleas was unaware of any
authority supporting this contention. To find that Cardinal Crossing justifiably
relied upon the statements of support for a proposal as binding promises of
Township “is far beyond where the law and case law can take it.” (Id. at 5.)
Moreover, even if Cardinal Crossing did not know municipal representatives could
not make a binding legal promise, such ignorance would not be reasonable or
justifiable. If it were, “every disappointed zoning or land use applicant would be
able to sue the municipality in a separate [civil] Action to recover for damages and
costs [based] on . . . alleged ‘promises’ made to them during the process by a
variety of township . . . representatives,” a result rejected in Monger v. Upper
Leacock Township, 132 A.3d 585 (Pa. Cmwlth.), petition for allowance of appeal
denied, 141 A.3d 483 (Pa. 2016). (Op. at 5-6.)
      On appeal,4 Cardinal Crossing argues the following. It adequately pleaded a
claim for promissory estoppel and common pleas erred in finding Cardinal

      4
         This Court’s review of an order resolving preliminary objections is limited to
determining whether common pleas committed legal error or abused its discretion. Palmer v.
(Footnote continued on next page…)

                                            6
Crossing’s reliance was not reasonably justified because this is a question of fact
that must be answered by the fact finder, not resolved at the preliminary objection
stage. Toy v. Metro. Life Ins. Co., 928 A.2d 186, 208 (Pa. 2007). Like the
plaintiffs in Lobolito, Inc. v. North Pocono School District, 755 A.2d 1287 (Pa.
2000), and Cornell Companies, Inc. v. Borough of New Morgan, 512 F. Supp. 2d
238 (E.D. Pa. 2007), Cardinal Crossing pleaded it relied upon the continued
promises of municipal actors, and those promises induced it to expend substantial
sums to its detriment, and, as in those cases, its claim should withstand a demurrer.
Additionally, it pleaded that it was justified in relying on the representations of the
Development Committee because that Committee was formed by Township and,
along with other Township representatives, was designated as the Board’s agent
for the development of the Property. Based on the pleadings, it is clear there were
promises made by various Township representatives authorized to act on
Township’s behalf which Township should have reasonably expected to induce
action on the part of Cardinal Crossing, and which did induce such action. Such a
claim is actionable if injustice can be avoided only by enforcing those promises or
awarding damages for breach of the promise. Crouse v. Cyclops Indus., 745 A.2d
606, 610 (Pa. 2000); Matarazzo v. Millers Mut. Group, Inc., 927 A.2d 689, 692
(Pa. Cmwlth. 2007).

_____________________________
(continued…)
Bartosh, 959 A.2d 508, 512 n.2 (Pa. Cmwlth. 2008). “A demurrer can only be sustained where
the complaint clearly is insufficient to establish the pleader’s right to relief.” Id. (citing Cnty. of
Allegheny v. Commonwealth, 490 A.2d 402, 408 (Pa. 1985)). “A preliminary objection in the
nature of a demurrer admits as true all well-pled material, relevant facts and every inference
fairly deducible from those facts,” but does not admit as true any conclusions or averments of
law. Id. “[A] preliminary objection in the nature of a demurrer should be sustained only in cases
that clearly and without a doubt fail to state a claim upon which relief may be granted.” Id.

                                                  7
       Township argues in response as follows. The reasonableness of Cardinal
Crossing’s reliance can be decided at the preliminary objection stage, Peluso v.
Kistner, 970 A.2d 530, 532-34 (Pa. Cmwlth. 2009), and promissory estoppel is not
a legally viable claim under these circumstances. The process of enacting and
amending a zoning ordinance is a legislative function of a municipality’s
governing body, and when the governing body acts in its legislative capacity those
actions are purely within its discretion.          Sections 601 and 909.1(b)(5) of the
Pennsylvania Municipalities Planning Code (MPC), 53 P.S. §§ 10601,
10909.1(b)(5),5 Springwood Dev. Partners, L.P., v. Bd. of Supervisors of
N. Cornwall Twp., 985 A.2d 298, 302-04 (Pa. Cmwlth. 2009). The Board can only
perform a legislative act or enter into an agreement on Township’s behalf through
an official action voted on by a majority of a quorum of its seven commissioners at
an advertised public meeting. Cardinal Crossing has not averred any facts related
to any official action by Township between the creation of the Development
Committee and appointment of three (of seven) Commissioners thereto and its
official vote on May 11, 2016, that could be viewed as a contract-like promise by
Township to enact the zoning code amendment proposed by Cardinal Crossing
upon which Cardinal Crossing could have reasonably relied. Thus, there was no
error in common pleas’ determination that the law will not allow recovery here.

       5
          Act of July 31, 1968, P.L. 805, as amended, 53 P.S. §§ 10601, 10909.1. Section 601
states, in pertinent part, “[t]he governing body of each municipality, in accordance with the
conditions and procedures set forth in this act, may enact, amend and repeal zoning ordinances to
implement comprehensive plans and to accomplish any of the purposes of this act.” 53 P.S.
§ 10601. Section 909.1(b)(5) was added by Section 87 of the Act of December 21, 1988, P.L.
1329, as amended, 53 P.S. § 10909.1(b)(5), and provides that “[t]he governing body . . . shall
have exclusive jurisdiction to hear and render final adjudications in . . . [a]ll petitions for
amendments to land use ordinances, pursuant to the procedures set forth in [S]ection 609” and
“[a]ny action on such petitions shall be deemed legislative acts.” Id.

                                               8
      “Promissory estoppel enables a person to enforce a contract-like promise
that would be otherwise unenforceable under contract law principles.” Peluso, 970
A.2d at 532. To state a claim for promissory estoppel, a plaintiff must allege the
following: “(1) the promisor made a promise that would reasonably be expected to
induce action or forbearance on the part of the promisee; (2) the promisee actually
took action or refrained from taking action in reliance on that promise; and (3)
injustice can be avoided only by enforcing the promise.” Id. at 533. These three
factors must be strictly enforced to prevent the “loose application” of promissory
estoppel.   Id.   Promissory estoppel requires both inducement and detrimental
reliance.   Matarazzo, 927 A.2d at 692.         Whether a plaintiff’s reliance was
reasonable or “justifiable . . . is typically a question of fact for the fact-finder to
decide, and requires a consideration of the parties, their relationship, and the
circumstances surrounding their transaction.” Toy, 928 A.2d at 208. However,
this is not always a question of fact and promissory estoppel claims can be
dismissed at the preliminary objection stage on this basis. Pittsburgh Baseball,
Inc. v. Stadium Auth. of Pittsburgh, 630 A.2d 505, 509 (Pa. Cmwlth. 1993)
(sustaining a preliminary objection to a promissory estoppel claim because, inter
alia, the plaintiff’s reliance on certain oral promises was not reasonable).
      Although we understand why Cardinal Crossing believes it was wronged,
there is no error in common pleas’ conclusion that it is certain under the law that
no recovery is possible in these circumstances. Cardinal Crossing’s Application
sought to re-zone the Property to allow for its development for mixed commercial
and residential uses. A request for re-zoning “requires the governing body . . . to
act in its legislative capacity and determine whether the re-zoning is in the best
interest of the community.” Springwood Dev. Partners, L.P., 985 A.2d at 302-03.

                                          9
The authority to enact zoning amendments rests exclusively with the governing
body, here, the Board, 53 P.S. §§ 10601, 10909.1(b)(5); Springwood Dev.
Partners, L.P., 985 A.2d at 302-04, and requires a vote of the majority of the
Board at a public meeting, see Commonwealth ex rel. Zimmerman v. Kleiman, 402
A.2d 1343, 1344 n.4 (Pa. 1979) (holding that, under The First Class Township
Code, the actions of a majority a governing body made at a public meeting
officially called to order with a quorum present are proper and have lawful effect).
It is well-settled that, as a purely legislative act, a governing body’s consideration
of an application to re-zone is “within the complete discretion of the local
governing body.” Springwood Dev. Partners, L.P., 985 A.2d at 304 (emphasis
added).
      Cardinal Crossing, who agreed to purchase the Property for $47 million in
cash and pay a $5 million non-refundable deposit subject to it receiving the
“standard development contingencies including . . . final and non-appealable
zoning and site plan approvals,” (Compl. ¶¶ 9-10, 38, 40 (emphasis added)), was
aware that, in order to develop the Property as desired, an amendment to the
zoning ordinance was required. As this could only be performed through an
official action of a majority of the Board during a public meeting, we agree with
common pleas that Cardinal Crossing’s reliance on unofficial statements and
representations as being legally binding promises of Township was not
reasonable or justified. This is particularly true where Cardinal Crossing was
aware of the community opposition to the proposed development and expressed its
own hesitation to expend the funds on the Application prior to the Board enacting
the zoning amendments.

                                         10
      Notwithstanding the lack of official action by the Board, Cardinal Crossing
argues it could reasonably and justifiably rely on the alleged representations as
promises of Township because the individuals with whom it met were designated
Township’s agents for the development of the Property. However, there are no
averments that Township authorized these individuals to legally bind it, through
their personal statements at private meetings, to enact the required zoning change.
The Development Committee was intended to “act[] as the conduit between the
[Board] and the developers of the [Property]” “to ‘consider private issues’ related
to the proposed development of the” Property. (Compl. ¶¶ 16-17.) The remaining
individuals were employees and an independent contractor of the Township, who
were responsible for assisting Cardinal Crossing through the process. We have
held that reliance on oral representations by government officials who did not have
the authority to bind a government entity is not reasonable and cannot be used to
assert a claim for promissory estoppel. Pittsburgh Baseball, Inc., 630 A.2d at 509
(potential purchasers of baseball team alleged they relied to their detriment on oral
promises by mayor that city would provide funding to them; court sustained
demurrer to promissory estoppel claim finding reliance not justifiable).        Such
reliance is not reasonable because “it is a general fundamental principle of law that
persons contracting with a municipal corporation must at their peril inquire into
the power of the corporation or its officers to make the contract.” Id. (internal
quotation omitted) (emphasis added). Therefore, the unofficial statements by
those who are not alleged to have been given the authority to bind the Township do
not, as a matter of law, constitute a “contract-like promise” by Township to enact
the requested legislation upon which a claim for promissory estoppel can be based.

                                         11
      In the cases Cardinal Crossing cites, where a promissory estoppel claim
against a governmental entity survived a demurrer, the governing body itself took
official action that was later rescinded or breached. The school board in Lobolito
entered into valid agreements with a developer to construct a new sewage
treatment plant to serve a yet-to-be constructed elementary school and a residential
subdivision, upon which the developer relied to expend monies to obtain permits
and approvals, which were later abrogated by a successor school board. 755 A.2d
at 1288, 1292. Similarly, the borough in Cornell Companies, Inc. entered into
agreements regarding the design, construction, and maintenance of a sewage
facility, under which the plaintiff expended substantial sums to construct the
facility, and the borough subsequently refused to comply with the terms of the
agreements. 512 F. Supp. 2d at 250-51.        Unlike in Lobolito and Cornell
Companies, Inc., here there is no official action by Township that Cardinal
Crossing avers caused it to act to its detriment. Here, Cardinal Crossing relies
upon the representations of support for the proposed development made by a
minority number of the Board and by Township employees or independent
contractors during the land development process.       However, these individuals
cannot bind Township into taking specific official legislative action because such
actions are solely within the discretion of the Board itself. Springwood Dev.
Partners, L.P., 985 A.2d at 302-04.

                                        12
          For these reasons, based on the facts pleaded and alleged in the Complaint,
common pleas did not err in sustaining the demurrer and dismissing the Complaint
with prejudice. Accordingly, we affirm.6

                                               _____________________________________
                                               RENÉE COHN JUBELIRER, Judge

          6
              Because of our disposition, we will not address Township’s assertions in its cross-
appeal.

                                                 13
       IN THE COMMONWEALTH COURT OF PENNSYLVANIA

Cardinal Crossing GP, LLC t/a           :
Cardinal Crossing Realty                :
Associates, L.P.,                       :
                         Appellant      :
                                        :
                   v.                   :   No. 1741 C.D. 2016
                                        :
Marple Township                         :
                                        :
Cardinal Crossing GP, LLC t/a           :
Cardinal Crossing Realty                :
Associates, L.P.                        :
                                        :
                   v.                   :   No. 1781 C.D. 2016
                                        :
Marple Township,                        :
                        Appellant       :

                                     ORDER

      NOW, July 20, 2017, the Order of the Court of Common Pleas of Delaware
County, entered in the above-captioned matter, is hereby AFFIRMED.

                                      _____________________________________
                                      RENÉE COHN JUBELIRER, Judge