R & J HOLDING v. Redevelopment Authority

Decision Date26 October 2005
Citation885 A.2d 643
PartiesR & J HOLDING COMPANY and RJ Florig Industrial Company, Inc. v. The REDEVELOPMENT AUTHORITY OF the COUNTY OF MONTGOMERY, Appellant R & J Holding Company and RJ Florig Industrial Company, Inc., Appellants v. The Redevelopment Authority of the County of Montgomery.
CourtPennsylvania Commonwealth Court

Gilbert P. High, Jr., Norristown, for designated appellant, Redevelopment Authority of the County of Montgomery.

Richard L. Bazelon, Philadelphia, for appellees, R & J Holding Company and RJ Florig Industrial Company, Inc.

Joel P. Aaronson, Pittsburgh, for amicus curiae, Pennsylvania Association of Housing and Redevelopment Agencies.

BEFORE: COLINS, President Judge, and FRIEDMAN, Judge, and FLAHERTY, Senior Judge. OPINION BY Senior Judge FLAHERTY

The Redevelopment Authority of the County of Montgomery (Authority) appeals from the order of the Court of Common Pleas of Montgomery County (trial court) that denied its Preliminary Objections and ordered the parties to apply for the appointment of a Board of Viewers to assess damage caused to R & J Holding's property. The trial court also denied the preliminary objections of R & J Holding Company and RJ Florig Industrial Company, Inc. (R & J Holding), who has also filed a cross-appeal.

On January 1, 1986, the Authority entered into an agreement (1986 Agreement) with the Greater Conshohocken Improvement Corporation (GCIC), whose principal is Donald Pulver (Pulver), which provided for a process intended to lead to the adoption of a redevelopment proposal in the Boroughs of Conshohocken and West Conshohocken to eliminate blight. Under the 1986 Agreement, the Authority was to acquire properties in a specified project area in the boroughs by eminent domain, and to convey them to Pulver for development. Specifically, under the Agreement, the Authority was to acquire real property by Eminent Domain for the public purposes of the Urban Redevelopment Law (URL).1

On October 13, 1993, the Authority again entered into an agreement (1993 Agreement) with GCIC which specifically related to R & J Holding's property. Under the 1993 Agreement, the Authority agreed to commence legal acquisition proceedings against R & J Holding's property and to take whatever steps are necessary to acquire, pursuant to the Eminent Domain Code (Code),2 title to the fee and possession of R & J Holding's premises. Pursuant to the 1993 Agreement, the Authority was to fund the acquisition of R & J Holding's property by using the funds provided by a grant from the Commonwealth. Under the 1993 Agreement, GCIC was to cover all direct condemnation costs that exceeded the grant amount. Finally, pursuant to the 1993 Agreement, it was agreed that neither the Borough nor the Authority are authorized to file a Declaration of Taking of R & J Holding's property without the prior written consent of GCIC.

On March 15, 1995, the Authority offered to purchase R & J Holding's property for $1,180,000 plus reasonable relocation costs. On July 11, 1996, the Authority filed a Declaration of Taking for R & J Holding's property. On August 26, 1996, R & J Holding filed preliminary objections to the Declaration of Taking. On June 4, 1997, Condemnee filed amended preliminary objections to the Declaration of Taking. The preliminary objections alleged that the Declaration of Taking should be set aside because: (1) Condemnor had unlawfully delegated its eminent domain powers to Pulver; (2) Condemnor had acted in bad faith in condemning the subject property; and (3) inadequate security had been posted for the condemnation.

On December 17, 1998, the trial court issued an order disposing of R & J Holding's preliminary objections. The trial court overruled R & J Holding's preliminary objections relating to unlawful delegation and bad faith. Condemnee then filed an appeal in this Court.

In an en banc decision dated February 13, 2001, we reversed the decision of the trial court. See In re Condemnation of 110 Washington Street, Borough of Conshohocken, Pennsylvania, by the Redevelopment Authority of Montgomery County for Urban Renewal Purposes, 767 A.2d 1154 (Pa.Cmwlth.2001), petition for allowance of appeal denied, 567 Pa. 748, 788 A.2d 379 (2001). Specifically, we stated that:

It is clear that the actions of [the Authority] in this case were beyond those conferred by the URL. It is true that [the Authority] ultimately filed the Declaration of Taking for [R & J Holding's] property. However, under the Agreements, [the Authority] was purportedly not authorized to take this action without Pulver's prior written consent. Thus, Pulver directed the condemnation of [R & J Holding's] property; [The Authority] was merely acting on Pulver's behalf. Such an exercise of eminent domain is clearly beyond the provisions of the URL, and is patently without authority of law. Moreover, any agreement which purportedly transfers such power to a private individual must be deemed to be void and unenforceable.

Id. at 1160. Accordingly, we reversed the order of the trial court.

On December 31, 2002, R & J Holding filed a Complaint against the Authority in Federal Court. The Authority filed a Motion to Dismiss, which the United States District Court for the Eastern District of Pennsylvania granted in an unreported memorandum decision dated October 15, 2003. The Court reasoned that R & J Holding's claims were not ripe because Pennsylvania's state courts can resolve whether there has been a taking and, if so, what remedies are available to them. See R & J Holding Co. v. Redevelopment Authority of the County of Montgomery, 2003 WL 22387034 (No. 02-CV-09530-LDD, filed October 15, 2003).3

On March 1, 2004, R & J Holding filed a Petition For Appointment of Board of Viewers, selected paragraphs of which are set forth below:

54. From the time [the Authority] filed the Declaration of Taking on July 11, 1996, and until the end of the condemnation proceedings in July of 2001, [the Authority] had title to the Florig Property. See 26 P.S. § 1-405(a).
55. During the pendency of the proceedings in the Court of Common Pleas in the Condemnation Action, and through the time that the Petition for Leave to Appeal was filed, the value of real estate in the Conshohocken area was rapidly rising. However, the Florig Property remained unmarketable during that time because of the pending condemnation proceedings.
56. After the Commonwealth Court's order dated February 13, 2001, and before [the Authority] filed its Petition for Allowance of Appeal in the Supreme Court, it appeared that the title to the Florig Property might finally revert back to its lawful owners. During that time, redevelopers were interested in discussing with R & J Holding Company the purchase and redevelopment of the Florig Property. This was known to [the Authority] and Pulver.
57. During that time, at least one major developer was ready to purchase Florig Property for significantly more than Petitioners could have received from [the Authority], and was willing to assist Petitioners with relocating their business. See Letter from J. Brian O'Neill of the O'Neill Properties Group, LP to Gerald McTamney, President of Conshohocken Borough Counsel, dated March 7, 2001, attached hereto as Exhibit "G." The interest in the Florig Property, predictably, disappeared when [the Authority] filed its Petition for Allowance of Appeal which continued the Condemnation Action.
58. At the time the Supreme Court of Pennsylvania denied the Petition for Allowance of Appeal in July of 2001, the Condemnation Action had been pending for more than five years. Because of the condemnation proceedings during this five year period, and because of the imminent threat of condemnation for a number of years prior thereto, R & J Holding Company had been unable to sell or redevelop commercially the Florig property, and R J Florig Industrial Company had been unable to expand its steel processing business at the Florig property or to relocate its business.
59. At all times, R & J Holding Company and RJ Florig Industrial Company have been committed to the continuation and growth of the steel processing business owned by R J Florig Industrial Company, whether at the Florig Property or at an alternative relocation site. The said steel processing business had outgrown the plant and facilities at the Florig Property before the date of condemnation and R J Florig Company had developed plans for renovating, expanding and upgrading its facilities at this property in 1992. However, because of the threat of condemnation, and the condemnation itself, Petitioners could not proceed with these plans.
...
63. As a result of being placed in a state of economic limbo by the threat of condemnation, and then by the unlawful condemnation itself, R J Florig Industrial Company was constricted by inadequate plant and facilities for many years.
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74. Petitioners are entitled to be compensation under the Eminent Domain Code for their injury in being unlawfully deprived of basic property rights for more than five years. See 26 P.S. § 1-502(e).

Therefore, R & J Holding requested that the trial court appoint viewers to assess the compensation due to it resulting from the taking of its property by the Authority. On March 9, 2004, the trial court appointed a Board of Viewers to assess the damage caused in connection with the matters alleged in the Petition for Appointment of Board of Viewers. On April 16, 2004, the Authority filed Preliminary Objections to the appointment of viewers, selected paragraphs of which are set forth below:

11. Subsequent to the conclusion of the initial litigation, on April 1, 2002 R & J Holding filed a Petition for Interim Fees, Costs and Expenses pursuant to 26 P.S. § 1-408 ... On June 30, 2003, the trial court held in favor of R & J Holding and awarded $550,959.73 for the fees, costs and expenses claimed in the Fee Petition. That award was subsequently satisfied by the
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7 cases
  • R&J Holding Co. v. Redevelopment Auth. of the Cnty. of Montgomery
    • United States
    • U.S. Court of Appeals — Third Circuit
    • December 9, 2011
    ...proceeding.” Pa.Stat.Ann. § 1–408 (1997). The court awarded the owner $550,959.73. See R & J Holding Co. v. Redevelopment Auth. of Cnty. of Montgomery, 885 A.2d 643, 647 (Pa.Commw.Ct.2005). In late 2002, Plaintiffs filed a § 1983 suit in federal court against the Authority and the Pulver De......
  • In re De Facto Condemnation
    • United States
    • Pennsylvania Supreme Court
    • August 22, 2006
    ...occurrence and authorizes additional compensation for the property owner beyond that contemplated in Section 408. See R & J Holding v. Redevelopment Authority, 885 A.2d 643 (Pa.Cmwlth.2005) (holding that Section 408 does not require that a condemnee be made whole); In re Condemnation, Route......
  • Linde Enterprises v. Lackawanna Ricer Basin Sewer Authority
    • United States
    • Pennsylvania Commonwealth Court
    • November 22, 2006
    ...an error of law and whether the findings of the trial court are supported by substantial evidence. R & J Holding Co. v. Redevelopment Authority of County of Montgomery, 885 A.2d 643 (Pa.Cmwlth.2005), appeal denied, 587 Pa. 703, 897 A.2d 462 ...
  • McAnally v. Commonwealth
    • United States
    • Pennsylvania Commonwealth Court
    • June 6, 2016
    ...an error of law or whether the findings of fact . . . are supported by sufficient evidence." R & J Holding Co. v. Redevelopment Auth. of Cnty. of Montgomery, 885 A.2d 643, 648 n.4 (Pa. Cmwlth. 2005). 12. The Department further notes that, to the extent that McAnally relies on the agreement ......
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