Drummond v. University of Pennsylvania

Decision Date05 December 1994
Citation651 A.2d 572
Parties96 Ed. Law Rep. 594 Erika M. DRUMMOND; Irvin Dinkins; Azeb Kinder et al. v. UNIVERSITY OF PENNSYLVANIA; Trustees of University of Pennsylvania et al. (Three Cases). Appeal of Erika M. DRUMMOND; Irvin Dinkins; Azeb Kinder et al., Appellants. Appeal of The TRUSTEES OF the UNIVERSITY OF PENNSYLVANIA, Appellants. Appeal of CITY OF PHILADELPHIA, Edward G. Rendell et al., Appellants.
CourtPennsylvania Commonwealth Court

Thomas K. Gilhool and Michael Churchill, for appellants/appellees Erika M. Drummond, Irvin Dinkins and Azeb Kinder et al.

Michael F. Eichert, for appellants City of Philadelphia and Edward G. Rendell et al.

Arthur Makadon, for appellees/appellants Univ. of Pennsylvania and Trustees of Univ. of Pennsylvania et al.

Before COLINS, President Judge, and DOYLE, McGINLEY, SMITH, PELLEGRINI, FRIEDMAN and NEWMAN, JJ.

PELLEGRINI, Judge.

Erika Drummond and numerous other Philadelphia school students, through their parents, various labor unions, civic groups and others (collectively, Objectors) appeal the order of the Court of Common Pleas of Philadelphia County (trial court) denying their petition for injunction and specific performance of ordinances and of agreements between the City of Philadelphia 1 and the trustees of the University of Pennsylvania (University) which they alleged required the University to each and every year provide 125 full-tuition scholarships. The trial court denied the requested injunction because none of the plaintiffs had standing and because it disagreed with the Objector's proposed interpretation of the agreements.

The general question in this appeal is the number of scholarships to be provided by the University to students of Philadelphia schools under agreements entered into by the City and the University in 1977. Those agreements were the result of a series of agreements and ordinances between the parties beginning in the last century. The agreements had their origin when city council, on January 24, 1882, authorized the City, by ordinance, to convey land to the University subject to various conditions, including that:

Trustees of the said University of Pennsylvania shall establish and forever maintain at least fifty (50) free scholarships, of an annual value of not less than seven thousand five hundred (7,500) dollars per annum, to be awarded under such conditions as may from time to time be deemed suitable to worthy and deserving students of the Public Schools of Philadelphia....

The ordinance also contained a condition that the University could not alienate the tracts without the consent of the City.

In a June 15, 1910 ordinance, city council approved the conveyance of additional tracts of land to the University, required an additional 75 free scholarships and made the scholarships available to all students in the City, not just to those in the public schools. In relevant part, it provided:

Trustees of the University of Pennsylvania shall establish and forever maintain seventy-five (75) free scholarships in any of the Departments of the University, to be awarded by the Mayor of the City to deserving students of all the schools of Philadelphia....

The 1910 ordinance similarly provided that the University could not alienate the tracts without the consent of the City.

This was the status of the agreements until 1977 when the University sought to mortgage the property conveyed to it by the City under the previous agreements. Because the bar to alienation made it impossible to mortgage the property, the University needed a change in the agreements. In response, on August 1, 1977, city council enacted Bill No. 832 (Ordinance) authorizing agreements to be entered into with the University to allow the University to mortgage the property. The Ordinance recited provisions contained in the 1882 and 1910 ordinances and stated in the preamble, in pertinent part, that:

WHEREAS, in consideration of the consent by the City of Philadelphia to the execution and delivery by the University of the aforesaid mortgage ... the University has agreed to increase the annual value of the scholarships awarded pursuant to the ordinances approved January 24, 1882 and June 15, 1910 by providing that a total of one hundred twenty-five (125) full tuition scholarships will be awarded by the Mayor of the City of Philadelphia to deserving students from all of the schools of Philadelphia.

More specifically, Section 2 of the Ordinance states as follows:

[The City's] consent is contingent upon the said Trustees' entering into an agreement with the City (i) to establish and forever maintain at least one hundred twenty-five, four-year, full tuition scholarships, or their equivalent, in any of the Departments of the University, to be awarded annually by the Mayor of the City of Philadelphia to deserving students from all of the schools of the City, which obligation shall be assumed by the Trustees in lieu of the obligation to establish and maintain at least fifty free scholarships ... imposed by Ordinance approved January 24, 1882, and in lieu of the obligation to establish and maintain seventy-five free scholarships ... imposed by an Ordinance approved June 15, 1910.... (Emphasis added.)

Section 5 authorizes the commissioner of public property to enter into an agreement with the University whereby the University shall "establish and forever maintain at least one hundred twenty-five, four-year, full tuition scholarships, or their equivalent, in any of the Departments of the University, to be awarded annually by the Mayor of the City of Philadelphia to deserving students from all of the schools of the City...." (Emphasis added.)

On the same day, city council enacted another ordinance, Bill No. 834 (collectively, the 1977 ordinances) authorizing the commissioner to execute and deliver a deed of release to certain premises in West Philadelphia bound by Spruce Street, Woodland Avenue, Pine and Thirty-sixth Streets, provided that the University shall have entered into the agreement authorized by the Ordinance and which set forth the University's obligation exactly as stated in the Ordinance.

With that authorization, on August 11, 1977, the City, through the commissioner and the University, entered into an agreement referencing the Ordinance and embodying the University's commitment. The agreement states that to fulfill its part of the contract, the University will:

establish and forever maintain at least one hundred twenty-five, four-year, full tuition scholarships, or their equivalent, in any of the Departments of the University, to be awarded annually by the Mayor of the City of Philadelphia to deserving students from all of the schools of the City.

On January 26, 1978, the City and the University entered into another agreement referencing the 1977 ordinances and restating the same language quoted above. It is the interpretation of those agreements that is the subject of this litigation.

After the 1977 agreement, the University calculated its annual commitment by multiplying current tuition by the number of scholarships required. Then scholarships were awarded in varying amounts to students depending on their need. Some students received less than the tuition amount in the form of a scholarship but were awarded financial aid in the form of loans and work study. Other students received more than the tuition amount in order to cover additional costs such as books, room and board. The University at times underfunded its obligation to provide full-time scholarships.

Objectors sued as representatives of a class of Philadelphia school children from poor and working families seeking a declaration that the actions of the University and the City violated the 1977 ordinances and requesting the court to permanently enjoin the University and the City from violating the 1977 ordinances by annually awarding less than 125 four-year, full tuition scholarships and failing to award the scholarships to only deserving students. Objectors also requested that the University be ordered to recompense the school children of Philadelphia and members of the class for the University's failure to comply with the 1977 ordinances and the agreements.

At trial, Objectors presented the testimony of parents of students of the City's public schools and/or the organization leaders. They testified that if the required number of scholarships had been awarded, their students may have been recipients. They also testified that those students who did receive Mayor scholarships were not receiving full tuition. Also for Objectors, Sheldon L. Albert, the city solicitor in 1977, testified that his office drafted the language at issue and inserted the word "annually" and, he believed, the Ordinance and agreements provided that 125 scholarships were to be awarded annually. Harry B. Jannotti, the finance chair and vice-chair of the rules committee of city council in 1977, agreed with Albert's interpretation.

Objectors also presented minutes of the city council rules committee hearing on July 29, 1977, where discussion occurred regarding the City's gain by virtue of the increase in scholarships, and that the 125 scholarships for the following year would be slightly in excess of $500,000.

The University presented, among other things, a letter dated February 5, 1992, from Judith E. Harris, city solicitor, to John F. Street, city council president. Harris reasoned that because the 1882 ordinance limited the value of the 50 scholarships to $7,500 and the value of those scholarships could be increased significantly by eliminating the cap and making each a "full tuition" scholarship, and because the Ordinance and agreements substitute the term "free scholarships" with the term "full tuition," the current language "when properly interpreted to give effect to the intent of the parties" supports the University's position that it is only obligated to provide 125 scholarships or their...

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