Court Opinion

ID: 4950603
Source: CourtListenerOpinion
Date Created: 2021-09-24 12:58:31.782852+00
Date Added: 2024-06-11T08:15:20.001715
License: Public Domain

SMITH, Judge,
dissenting.
I dissent from the majority’s decision to affirm the February 23, 1993 order of the Court of Common Pleas of Philadelphia county which denies scholarships to deserving graduates of Philadelphia schools — public, private and parochial. The scholarships are intended by clear and unambiguous terms of the 1977 ordinances of city council and resulting agreements between the City of Philadelphia and University of Pennsylvania. Objectors have standing as third-party beneficiaries and as taxpayers to seek enforcement of the local ordinances which authorize the agreements between the City and trustees of the University requiring the University to provide scholarships to students from the City’s schools in exchange for authorization to mortgage certain tracts of land the City previously conveyed to the University. A plain reading of the 1977 ordinances and agreements specifically require the University to provide 125 four-year, full-tuition scholarships to be awarded annually, meaning each year, to deserving graduates from Philadelphia schools.
I.
The rule for determining whether a party has standing as a third-party beneficiary to seek enforcement of a contract was set forth in the seminal ease of Spires v. Hanover Fire Ins. Co., 364 Pa. 52, 70 A.2d 828 (1950). The Pennsylvania Supreme Court held in Spires that a third party has standing to seek performance of obligations under a contract when the contracting parties “express an intention that the third party be a beneficiary to whom the promisor’s obligation runs in the contract itself.” Guy v. Liederbach, 501 Pa. 47, 58, 459 A.2d 744, 750 (1983). The Spires Court noted that the contract need not specifically or individually designate a party as a beneficiary so long as the third party was in contemplation when the contracting parties entered into their agreement. Spires, 364 Pa. at 57 n. *, 70 A.2d at 831 n. *. See also Sullivan v. County of Bucks, 92 Pa.Commonwealth Ct. 213, 499 A.2d 678 (1985), appeal denied, 516 Pa. 623, 532 A.2d 21 (1986).
The Supreme Court also adopted Restatement (Second) of Contracts § 302 (1979) in Guy. Section 302 provides, in pertinent part, that “a beneficiary of a promise is an intended beneficiary if recognition of a right to performance in the beneficiary is appropriate to effectuate the intentions of the parties and ... the circumstances indicate that the promisee intends to give the beneficiary the benefit of the promised performance.” The test for third-party beneficiary status set forth in Guy does not require the manifestation of a mutual intention in the contract but bestows discretion on the trial court to determine whether recognition of third-party beneficiary status would be appropriate. See also Scarpitti v. Weborg, 530 Pa. 366, 609 A.2d 147 (1992); Sullivan.
In Scarpitti, the Supreme Court determined that homeowners in a subdivision were the intended third-party beneficiaries to a contract between an architect and a developer regarding uniform enforcement of deed restrictions. The Court reasoned that because the purpose of the agreement was to make the subdivision’s lots more attractive to prospective purchasers and the homeowners are the limited group who have the greatest interest in and benefit from enforcement of the restrictions, the homeowners are intended third-party beneficiaries of the contract. Thus third-party beneficiary status is proper*583ly conferred in Pennsylvania when either the contracting parties express in the contract an intention that the promisor’s obligation benefit the third party or compelling circumstances dictate recognition of third-party beneficiary status to effectuate the intention of contracting parties. Scarpitti; Guy; Spires.
This Court applied the above test in Sullivan to two contracts involving governmental bodies. The Court allowed two water authorities third-party beneficiary status to enforce an agreement between a third water authority and Bucks and Montgomery Counties, and an agreement between the authority and a public utility company. Specifically, the first agreement required the contracting authority to construct a transmission main and Bucks County to cause the authority to construct a pumping station. The second agreement required the contracting authority to construct and maintain the pumping station and transmission main and the public utility company to construct a reservoir and pump house for public use by the two counties.
The Court explained in Sullivan that the non-contracting parties had standing under the Spires test because the contracting parties mutually intended, as manifested in the agreement, that the non-contracting parties would benefit from the promisors’ obligations under the agreements. The non-contracting parties also had standing under the Guy test because the trial court properly determined that the circumstances indicate that the promisees, Montgomery County in the first agreement and the public utility company in the second agreement, intended for the non-contracting parties to receive the benefits of promised performance.
Objectors have established sufficient facts to satisfy the Spires and Guy tests. At trial, Objectors presented the testimony of, among others, Betty Bunn who established that she is the mother of four school children in the City’s public schools, two of whom are “A students” and plan to attend college; Carol Laden who testified that she is a taxpayer in the City and that her son Keith was admitted to the University for the fall 1992 semester and was selected for a mayor’s scholarship but attends Yale University because the University of Pennsylvania did not provide Keith full tuition; and Martin Dias who testified that he is a taxpayer and president of a University student league and that mayor’s scholars in his organization are not receiving full-tuition scholarships. Other students testified they either did not know about the scholarships or that if the required number of scholarships had been awarded, they may have been recipients.
Analysis of the agreements demonstrate an express manifestation of the intention of the City, as promisee, and the University, as promisor, that “deserving students from all of the schools of the City” benefit from the University’s obligations. Spires. The circumstances also disclose that Objectors have the greatest interest in the uniform enforcement of the agreements, and creation of the mayor’s scholarship committee evidences the City’s intention to enforce the University’s obligation for the benefit of deserving students. The University’s actions in providing scholarships, albeit less than that required, demonstrate the University’s contemplation that deserving students from the City’s schools would benefit from its obligation. Guy. Consequently, the trial court erred as a matter of law and abused its discretion by determining that Objectors do not possess third-party beneficiary status to challenge the interpretation and enforcement of the agreements.1
Without any legal authority whatsoever, the majority carves an exception to the tests for third-party beneficiary standing. Case law does not support the application of a different test if one of the parties is a governmental entity, and this Court has consistently applied the Spires-Guy test to cases *584involving governmental units. Sims v. Silver Springs-Martin Luther Sch., 155 Pa.Commonwealth Ct. 619, 625 A.2d 1297 (1993) (minor did not establish right to third party-beneficiary status to a contract between a township and school district under Spire or Guy tests, since neither he nor anyone similarly situated were intended beneficiaries); Sullivan.
The majority cites Nguyen v. United States Catholic Conference, 548 F.Supp. 1333 (W.D.Pa.1982), aff'd, 719 F.2d 52 (3d Cir. 1983), and Townsend v. Pittsburgh, 383 Pa. 453, 119 A.2d 227 (1956), to support the proposition that when a governmental entity is involved, the Guy test is inapplicable. Nguyen and Townsend address third-parties rights to seek compensatory damages due to alleged breaches of governmental contracts pursuant to the Restatement (Second) of Contracts § 313 (1981) and the Restatement of Contracts § 145 (1932).2 Neither Nguyen or Townsend preclude parties from filing actions challenging a contract’s interpretation or enforcement. See Sullivan; compare Clifton v. Suburban Cable TV Co. Inc., 434 Pa. Superior Ct. 139, 642 A.2d 512 (1994) (the trial couid did not abuse its discretion in refusing to grant third-party beneficiary status to an inmate, under the circumstances, because the contract between the cable company and the Commonwealth to provide cable to prison cells expressly excluded prisoners from enforcing the contract.)
Objectors have established that they are among the group contemplated by the City and the University to receive the benefit of the University’s obligation under the agreements. Objectors therefore have standing to challenge the interpretation and enforcement of the agreements. It should be noted that the majority’s bald assertion that the University can be held liable only to the City, op. at 579, and University counsel’s similar assertion that only city council has standing to enforce the agreements can neither be supported by the 1977 ordinances, the agreements, nor case law.
U.
The majority has improperly concluded that interpretation of the agreements was the sole subject of this litigation. The majority has inexplicably dismissed the role of Philadelphia’s city council in managing the City’s real estate portfolio and completely ignored pertinent provisions of the Philadelphia Home Rule Charter prohibiting the commissioner of public property from entering into agreements regarding the City’s real estate unless authorized by ordinance. Specifically, Section 8.8-205 of the Philadelphia Home Rule Charter, 351 Pa.Code § 8.8-205, provides that:
A department, board or commission shall not sell or exchange any real estate belonging to the City or grant any license, easement, right of way, or other interest over or in such real estate without specific authority from the Council so to do. In deeds of land made by the City, appropriate restrictions may be imposed, including a restriction requiring that the design and location of structures to be altered or erected thereon be first approved by the Art Commission.
Because the City was precluded by law from entering into the agreements without the prior authority of council through enactment of the 1977 ordinances, interpretation of the ordinances are essential to the disposition of this matter and, as will be discussed below, *585provide an independent basis for Objectors’ standing.
In order to establish standing to challenge a governmental act, a party need only allege that he or she has an immediate, direct and substantial interest in the subject matter of the litigation. Wm. Penn Parking Garage, Inc. v. City of Pittsburgh, 464 Pa. 168, 346 A.2d 269 (1975); Farley v. Zoning Hearing Bd. of Lower Merion Twp., 161 Pa.Commonwealth Ct. 229, 636 A.2d 1232 (1994). Usually, the common interests shared by all citizens and taxpayers in the administration of justice and proper resolution of disputes will not suffice to confer standing in a controversy, Wm. Penn Parking Garage; the challengers must establish a causal connection between the complained of action and their interests as taxpayers. Upper Bucks County Vocational-Technical Sch. Educ. Assoc. v. Upper Bucks County Vocational-Technical Sch. Joint Comm., 504 Pa. 418, 474 A.2d 1120 (1984). See also Sierra Club v. Hartman, 529 Pa. 454, 605 A.2d 309 (1992).
However, the Pennsylvania Supreme Court has determined that in special cases where the denial of standing to taxpayers will cause governmental action to go unchallenged, taxpayers will be granted standing. Sprague v. Casey, 520 Pa. 38, 550 A.2d 184 (1988); Application of Biester, 487 Pa. 438, 409 A.2d 848 (1979). In conferring standing in these cases, the Supreme Court relied upon its earlier pronouncements that the fundamental reason for granting standing, where the interests arguably do not fit within the general requirements, is that a large body of governmental activity would otherwise go unchallenged in the courts. This Court recognized that consideration must also be given to the “appropriateness of judicial relief, the availability of redress through other channels, or the existence of other persons better situated to assert the claim.” Rizzo v. City of Philadelphia, 136 Pa.Commonwealth Ct. 13, 18, 582 A.2d 1128, 1130 (1990), appeals denied, 527 Pa. 653, 658, 659, 593 A.2d 424, 428, 429 (1991) (quoting Sprague, 520 Pa. at 44, 550 A.2d at 187).
The Rizzo Court allowed a taxpayer to challenge in equity a decision of the board of pensions and retirement to pay pension benefits to a former police commissioner because no party to the pension proceeding was aggrieved by the decision and therefore would not challenge the decision.3 In the matter sub judice, the University is the party beneficially affected by misinterpretation of the 1977 ordinances, and it is patently obvious that the University will not challenge an interpretation that enures to its benefit. Sprague. Because Objectors have established a causal connection between their interests and the complained of action, Objectors have standing to bring this equity action under the 1977 ordinances.
This Court.has recently recognized that parents have a substantial and protectable interest in their rights to ensure express parental consent prior to commencement of a program of condom distribution within the School District of Philadelphia. Parents United for Better Schools, Inc. v. Sch. Dist. of Philadelphia, — Pa.Commonwealth Ct. -, 646 A.2d 689 (1994). The Court rejected arguments that the objecting parents did not have standing because their interests were shared by all parents of children in Philadelphia schools and observed that: “[t]o deny standing to persons who are in fact injured simply because many others are also injured, would mean that the most injurious and widespread Government actions could be questioned by nobody.” Id. at -, 646 A.2d at 692 (quoting United States v. Students Challenging Regulatory Agency Procedures (SCRAP), 412 U.S. 669, 688, 93 S.Ct. 2405, 2416, 37 L.Ed.2d 254 (1973)). I would therefore allow Objectors to proceed with their petition for an injunction and special *586relief because of their standing as third-parties beneficiaries and as taxpayers.
Ill
The trial court erred in its interpretation of the 1977 ordinances regarding the number and frequency of mayor’s scholarships to be awarded. The court relied upon an interpretation of the 1977 ordinances provided by the city solicitor, Judith Harris, and determined that because the University and the City never intended the University’s obligation to be greater than that stated by Harris, the 1977 ordinances require 125, four-year, full tuition scholarships or their equivalent so that at any given point in time there would be 125 mayor’s scholarships or their equivalent.4 The court also concluded that the University has underfunded its obligations under the 1977 ordinances by failing to give full-tuition scholarships to all of the mayor’s scholars and awarding scholarships to students who graduated from schools located outside of Philadelphia.
Statutory construction principles are applicable when construing local ordinances, Patricca v. Zoning Bd. of Adjustment of Pittsburgh, 527 Pa. 267, 590 A.2d 744 (1991), and the intent of the governing body which enacted the ordinance is of primary concern. Statutory Construction Act of 1972, 1 Pa.C.S. § 1921(a), (b) and (c)(7-8); Tobin v. Radnor Twp. Bd. of Comm’rs, 142 Pa.Commonwealth Ct. 567, 597 A.2d 1258 (1991). A court may not ignore the plain language and history of an ordinance, In re Hoover, 147 Pa.Commonwealth Ct. 475, 608 A.2d 607 (1992); and an ambiguity exists when language is subject to two or more reasonable interpretations and not merely because two conflicting interpretations may be suggested. New Castle County v. Hartford Accident & Indem. Co., 970 F.2d 1267 (3d Cir.1992), cert. denied, — U.S.-, 113 S.Ct. 1846, 123 L.Ed.2d 470 (1993).5
The trial court did not determine that all of the provisions in the 1977 ordinances were ambiguous. Rather, the court relied upon Pennsylvania Liquor Control Board v. Bur-rell Food Systems, Inc., 97 Pa. Commonwealth Ct. 101, 508 A.2d 1308 (1986), appeal denied, 513 Pa. 636, 520 A.2d 1386 (1987), and erroneously determined that it was “bound to give great deference to administrative interpretation”; noted that Harris was the only city solicitor to issue a written opinion on the matter; and concluded that based on Harris’ opinion, the University’s obligation was only to establish and maintain 125 four-year, full-tuition scholarships, or their equivalent, so that at any point in time there will be 125 mayor’s scholars receiving full tuition under the program.
While the duties of a city solicitor include interpreting and preparing ordinances and furnishing legal advice to the mayor and city council, see 351 Pa.Code § 4.4-400, the trial court erred in giving Harris’ opinion the same deference and weight which are accorded an administrative agency’s interpretation of a statute the agency is charged to execute and apply. Such deference and weight are accorded to an administrative agency’s interpretation only where the statutory language is not explicit or is ambiguous and the agency’s interpretation is not clearly erroneous. Burrell Food Systems. Moreover, the fact that city council rejected the city solicitor’s proposed amendment to the 1977 ordinances further demonstrates that no legal basis existed for the trial court to bind itself to the city solicitor’s opinion.
*587The scholarships provided for in the 1977 ordinances were “in lieu of the obligations” under the 1882 and 1910 ordinances which totalled 125 free scholarships (fifty Board of Education scholarships to public school students and 75 mayor’s scholarships to students from all of the City’s schools). The increased obligations under the 1977 ordinances plainly required that preexisting obligations be changed to 125 four-year, full-tuition scholarships to be awarded annually or every year, so that by the end of a four year period, the University shall have awarded such scholarships to a total of 500 deserving students from Philadelphia schools. This Court’s role is to interpret the 1977 ordinances consistent with its plain meaning and relevant rules of statutory construction and it does not have the power to rewrite the 1977 ordinances in order to arrive at a desired result.6 Allright Auto Parks, Inc. v. Zoning Board of Adjustment of Philadelphia, 107 Pa.Commonwealth Ct. 448, 529 A.2d 546 (1987).
For the foregoing reasons, I would reverse the trial court’s February 22, 1993 order denying Objectors’ petition for injunctive and special relief. The court erred in concluding that Objectors had no standing to bring their equity action and in its interpretation of the 1977 ordinances with respect to the number and frequency of mayor’s scholarships to be awarded to deserving graduates of Philadelphia schools. This case should be remanded to the trial court for entry of an order granting appropriate injunctive and/or other relief to ensure the award of scholarships consistent with the terms of the 1977 ordinances, or for additional proceedings, if necessary, before entry of appropriate relief.
DOYLE and FRIEDMAN, JJ„ join in this dissent.

. Cf. Northeastern Florida Chapter of the Associated General Contractors of America v. City of Jacksonville, - U.S. -, 113 S.Ct. 2297, 124 L.Ed.2d 586 (1993) (to establish standing to challenge the government's imposition of barriers making it more difficult for members of one group to obtain a benefit than members of another group, the challenging party need only establish that he or she is part of the group subject to unequal treatment and need not allege that, but for the barrier, they would have obtained the benefit).

. Section 145 provides in pertinent part:
A promisor bound to the United States or to a State or municipality by contract to do an act or render a service to some or all of the members of the public, is subject to no duty under the contract to such members to give compensation for the injurious consequences of performing or attempting to perform it, or of failing to do so_ (Emphasis added.)
Section 313 provides in part:
[A] promisor who contracts with a government or governmental agency to do an act for or render a service to the public is not subject to
contractual liability to a member of the public for consequential damages resulting from performance or failure to perform unless
(a) the terms of the promise provide for such liability; or
(b) the promisee is subject to liability to the member of the public for the damages and a direct action against the promisor is consistent with the terms of the contract and with the policy of the law authorizing the contract and prescribing remedies for its breach. (Emphasis added.)

. Cf. In re Hoover, 147 Pa.Commonwealth Ct. 475, 484, 608 A.2d 607, 611 (1992) (property owners who reside in a flood plain in close proximity to a proposed land use had standing to challenge the misinterpretation of an ordinance because, inter alia, "[t]o hold otherwise, would allow municipalities to avoid public challenge and ignore regulatory prohibitions”). An association may have standing as the representative of its members if the association alleges that at least one of its members has or will suffer direct, immediate and substantial injury as a result of the challenged action. National Solid Wastes Management Assn. v. Casey, 135 Pa.Commonwealth Ct. 134, 580 A.2d 893 (1990).

. The University presented to the trial court a draft of Bill No. 66 which Harris forwarded to John F. Street, city council president. The draft ordinance contained language which Harris proposed to amend the 1977 ordinances "so as to eliminate any alleged uncertainty.” The word "annually” was deleted in the draft. Harris appeared before city council during its deliberations on the proposed bill at which time Harris attempted to explain her interpretation of the 1977 ordinances. City council reviewed Bill No. 66 and refused to enact it.

. Preambles to ordinances may be considered in the construction thereof. 1 Pa.C.S. § 1924; Bundy v. Belin, 501 Pa. 255, 461 A.2d 197 (1983). Words and phrases are to be construed according to the rules of grammar and their common and approved usage, 1 Pa.C.S. § 1903(a), and undefined terms must be given their plain, ordinary meaning. Federici v. Borough of Oakmont Zoning Hearing Bd., 136 Pa.Commonwealth Ct. 310, 583 A.2d 15 (1990), appeal dismissed, 531 Pa. 454, 613 A.2d 1205 (1992).

. The interpretation presented in the concurring opinion has the effect of rewriting the 1977 ordinances by deleting the word "annually” and inserting the word "available.” The concurring judge urges that the 1977 ordinances provide that the Mayor award "available" scholarships annually.