DeLuca v. Hazleton Police Dep't, 2401 C.D. 2015

• Decision Date: 28 July 2016
• Docket Number: No. 2401 C.D. 2015,2401 C.D. 2015
• Citation: 144 A.3d 266
• Parties: Cynthia DELUCA and DeLuca's Auto Repair and Towing, Inc., Appellants v. HAZLETON POLICE DEPARTMENT and Chief of Police Frank V. DeAndrea, Jr.
• Court: Pennsylvania Commonwealth Court

144 A.3d 266

Cynthia DELUCA and DeLuca's Auto Repair and Towing, Inc., Appellants

v.HAZLETON POLICE DEPARTMENT and Chief of Police Frank V. DeAndrea, Jr.

No. 2401 C.D. 2015

Commonwealth Court of Pennsylvania.

Argued June 6, 2016.

Decided July 28, 2016.

Kimberly D. Borland, Wilkes–Barre, for appellants.

Joshua M. Autry, Harrisburg, for appellees.

BEFORE: ROBERT SIMPSON, Judge, and PATRICIA A. McCULLOUGH, Judge, and BONNIE BRIGANCE LEADBETTER, Senior Judge.

OPINION BY Judge ROBERT SIMPSON.

The key issue in this case is whether suspension from a municipality's emergency service towing rotation is an “adjudication” under our Local Agency Law,¹ requiring a hearing and the right of appeal. A towing business was suspended from the towing rotation in Hazleton amid accusations of misconduct, including dishonesty or corruption affecting the health, safety and welfare of others, but it was denied a hearing before the local agency and a trial court. The towing business appeals.

More particularly, DeLuca's Auto Repair and Towing, Inc., and its owner, Cynthia DeLuca (collectively, DeLuca) appeal from an order of the Court of Common Pleas of Luzerne County (trial court) dismissing their local agency appeal. DeLuca appealed from a letter of the Hazleton Police Department (Department) and Chief of Police Frank V. DeAndrea, Jr. (Police Chief) suspending DeLuca from being placed on the Department's emergency service towing rotation list for a period of three years. In granting the Department's motion to dismiss, the trial court determined DeLuca demonstrated no constitutionally protected rights or interests in the Department's towing rotation warranting a right to appeal the Department's suspension letter. For the reasons that follow, we reverse and remand for further proceedings.

I. Background

DeLuca is a Pennsylvania corporation located in the City of Hazleton. It is in the business of towing vehicles. Prior to June 9, 2015, DeLuca received towing assignments on a rotating basis with other approved towers. On June 9, 2015, the Department faxed DeLuca a notification of suspension of towing services for three years under Section 1.06 of the Department's Towing Requirements Policy (Towing Policy) for repeated conduct by a towing service employee that tends to demean the public image of the Department. See Reproduced Record (R.R.) at 7a. The Department described Ms. DeLuca's offending conduct as follows:

Facebook posting under your personal account have [sic] accused the Mayor of the City of Hazleton with being [a] criminal and accepting bribes. This by means of the relationship [DeLuca] has with the City of Hazleton and the [Department], tends to demean the public image of the Department.

Id. The Department's notice of suspension also provided:

Your suspension shall be for three years. It shall commence immediately and shall end June 10, 2018. Prior to your towing service becoming eligible to receive service calls at the end of this suspension you must take appropriate remedial action. Your towing services recourse to this suspension is through civil litigation.

Id. (emphasis added). Thereafter, news articles about DeLuca's suspension appeared on-line and in the local newspaper. See R.R. at 31a–36a.

In response to the notice of suspension, DeLuca, through counsel, requested either a rescission of the suspension or a hearing on the suspension in the nature of an appeal. R.R. at 8a–9a. On June 17, 2015, the Department issued a revised notice of suspension, which provided (with emphasis added):

The suspension is pursuant to Section 1.06(C)(3) of the [Towing Policy]: ‘The commission of any act by an owner or manager of a towing service involving dishonesty or corruption, when the act directly or indirectly affects the health, welfare, or safety of others.’ The Facebook posting under ‘Hazleton Corrupts' created under your name and Facebook account has accused the [Department], the Mayor, Frank Vito and [Police Chief] of being corrupt, accepting bribes, and improperly discriminating against your towing company (which is untrue). I enclose a copy of the policy for your convenience. I note that you were given a copy of same when you were originally placed on the list, which you consented to.

Your suspension shall be for three years. It shall become effective June 9, 2015, and it shall end on June 10, 2018. Prior to your towing service becoming eligible to receive service calls at the end of this suspension you must take appropriate legal action. Your towing services recourse to this suspension is through civil litigation, per Section 1.06(F) of the Policy.

I am copying your Attorney ... with this Notice. The Hazleton City Solicitor ... advises [your attorney] that no appeal hearing will be provided in this matter, his recourse is via suit, per Section 1.06(F) of the policy. Additionally, any suit claiming constitutional protection of free speech and association for this activity will be met with a counterclaim for defamation and attorneys' fees.

R.R. at 10a.

In July 2015, DeLuca filed a local agency appeal from the Department's first notice of suspension asserting the suspension of DeLuca's towing privileges constituted an adjudication imposed without a hearing in violation of DeLuca's due process rights. See R.R. at 4a–6a. In its appeal, DeLuca averred:

5. The purported suspension was without prior notice or hearing and is without basis in fact.

6. The purported suspension is in violation of both the United States and Pennsylvania Constitutions in that it was done without due process and in contravention of [DeLuca's] rights of political speech, activity and affiliation.

7. [DeLuca's] constitutional property and liberty interests have been impaired by the purported suspension.

DeLuca's Appeal at ¶¶ 5–7; R.R. at 5a.

In August 2015, the Department responded with a motion to dismiss the appeal. R.R. at 16a–23a. The Department argued that a local agency appeal is permitted only where an agency issues an adjudication adversely affecting the personal or property rights or interests of an individual or business. Here, the Department asserted, DeLuca had no statutory or contractual entitlement to remain in the towing service rotation. Therefore, the Department argued, DeLuca had no personal or property rights at stake and thus had no right to an appeal.

Thereafter, the trial court held oral argument on the Department's motion. R.R. at 26a–29a. Before the trial court, DeLuca asserted it suffered both a business loss and a reputational loss. The suspension cost DeLuca two rotations in just six weeks, and the business it would have received. See Notes of Testimony (N.T.), 8/17/15, at 3–4; R.R. at 27a. DeLuca further asserted it lost additional business from other customers who thought DeLuca went out of business or could no longer work in Hazleton. Id. Therefore, in addition to a financial loss, DeLuca claimed it suffered a reputational loss as a result of the suspension. Id.

In response, the Department asserted DeLuca had neither a contract with the Department nor a statutory right to be on the Department's towing rotation list. N.T. at 6–7; R.R. at 28a. To that end, the Department argued its Towing Policy did not create a contractual relationship between the Department and DeLuca. N.T. at 8; R.R. at 28a. Absent a right to a local agency appeal, the Department asserted DeLuca's claim for loss of reputation or stigma must be brought in a proper forum, such as a state or federal court. Id.

Following oral argument, the trial court also set up a briefing schedule for the parties and concluded the hearing. On October 1, 2015, the trial court entered an order granting the motion to dismiss the appeal.

Thereafter, in an opinion in support of its order, the trial court, citing our decision in Wilco Mechanical Services, Inc. v. Department of General Services, 33 A.3d 654 (Pa.Cmwlth.2011), recognized a letter may constitute an adjudication if it is a final determination of an agency impacting a party's personal or property rights, privileges, immunities, duties or obligations. See Tr. Ct., Slip Op., 12/30/15, at 7. Further, the court reasoned, to have a constitutionally protected property interest, a party must have more than a unilateral expectation, it must possess a legitimate and enforceable claim under the law. Id. at 7–8. In addition, an agency's general statement of policy is neither a rulemaking nor an adjudication. Id. at 9. Reviewing additional cases cited by the Department, the trial court reasoned:

We have reviewed the authority submitted by the [Department] defining and delimiting the nature of the purported rights and interests asserted in the instant context. These include: [In re J.B., 630 Pa. 408, 107 A.3d 1 (2014) ]; [Pipkin v. Pennsylvania State Police, 548 Pa. 1, 693 A.2d 190 (1997) ]; [Stumpp v. Stroudsburg Municipal Authority, 540 Pa. 391, 658 A.2d 333 (1995) ]; Wilco; [Scott v. City of Pittsburgh, 903 A.2d 110 (Pa.Cmwlth.2006) ]; [Nitterhouse v. Department of Public Services, 706 A.2d 381 (Pa.Cmwlth.1998) ]; and [Nearhood v. City of Altoona, 705 A.2d 1363 (Pa.Cmwlth.1998) ].

Both the holdings and tenor of the referenced decisions require, in our judgment, an interpretation of an asserted right or interest which is consistent with the language employed by the legislature. Indeed, these decisions do not seek to judicially expand or create interests or privileges not contemplated by the legislation.

Tr. Ct., Slip. Op., at 8 (citation omitted).

Ultimately, the trial court determined, “[i]t is not the court's prerogative to interfere with the operation of municipal government or the decisions made by municipal officials absent some legally cognizable and necessary reason to do so.” Tr. Ct., Slip. Op., at 10 (emphasis in original).

With respect to DeLuca's claim of injury to its reputation, the trial court rejected DeLuca's argument that the Supreme Court's decision in J.B. dictates that an injury to a party's reputational interest permits an agency appeal and hearing....