Ezy Parks v. Larson

• Citation: 454 A.2d 928,499 Pa. 615
• Decision Date: 22 December 1982
• Court: Pennsylvania Supreme Court
• Parties: EZY PARKS, et al., Appellees, v. Thomas D. LARSON, et al., Appellants.

Page 928

454 A.2d 928

499 Pa. 615

EZY PARKS, et al., Appellees, v. Thomas D. LARSON, et al., Appellants.

Supreme Court of Pennsylvania.

Argued May 17, 1982.

Decided Dec. 22, 1982.

Reargument Denied Feb. 8, 1983.

[499 Pa. 617] Andrew H. Cline, Asst. Counsel, Dept. of Transportation, Harrisburg, for appellants.

Michael Sklaroff, Katherine E. Knox, Stanley M. Shingles, Philadelphia, for appellees.

Before O'BRIEN, C.J., and ROBERTS, NIX, LARSEN, FLAHERTY, McDERMOTT and HUTCHINSON, JJ.

OPINION

HUTCHINSON, Justice.

This is an appeal from the Commonwealth Court's order of August 28, 1982 continuing a preliminary injunction after hearing. The injunction had been granted originally without a hearing on June 10, 1981. The order, per Judge Craig, restrained appellants Pennsylvania Department of Transportation (PennDOT) and its agents and employees from:

(1) [T]erminating [appellees] leases ... [with Penn-DOT], (2) expropriating improvements which [appellees] have made on those premises, (3) making any award of contracts or leases pursuant to the bidding and bid-opening procedures to be held June 11 and 12, 1981, and (4) entering into any new leases for any or all of said premises with any parties other than [appellees].

We find that the Commonwealth Court had reasonable grounds for enjoining the award of contracts or leases under the particular bid specifications prepared by PennDOT. However we are constrained to hold that it abused its discretion in exercising its equitable powers to enjoin PennDOT from terminating its leases with appellees, claiming appellees' improvements, or entering into leases with parties other than appellees because appellees have an adequate and exclusive remedy at law against that harm. We therefore affirm, in part, and reverse, in part, the order of the Commonwealth Court.

I

The standard of review on appeal from the grant of a preliminary injunction was recently recited by this Court in Shenango Valley Osteopathic Hosp. v. Dept. of Health, --- Pa. ---, ---, 451 A.2d 434, 439 (1982) (quoting Bell v. Thornburgh, 491 Pa. 263, 267-268, 420 A.2d 443, 445 (1980)).

As a preliminary consideration, we recognize that on an appeal from the grant or denial of a preliminary injunction, we do not inquire into the merits of the controversy, but only examine the record to determine if there were any apparently reasonable grounds for the action of the court below. Only if it is plain that no grounds exist to support the decree or that the rule of law relied upon was palpably erroneous or misapplied will we interfere with the decision of the Chancellor. Intraworld Inc. v. Girard Trust Bank, 461 Pa. 343, 336 A.2d 316 (1975); Credit Alliance Corp. v. Philadelphia Minit-Man Car Wash Corp., 450 Pa. 367, 301 A.2d 816 (1973); Zebra v. Pittsburgh School District, 449 Pa. 432, 296 A.2d 748 (1972). "In order to sustain a preliminary injunction, the plaintiff's right to relief must be clear, the need for relief must be immediate, and the injury must be irreparable if the injunction is not granted." Zebra v. Pittsburgh School District, 449 Pa. at 437, 296 A.2d at 750. (emphasis added). Roberts v. School District of Scranton, 462 Pa. 464, 469, 341 A.2d 475, 478 (1975). (emphasis added).

Moreover, the determination as to any apparently reasonable grounds must be predicated upon our independent examination of the record. Shenango Valley, --- Pa. at ---, 451 A.2d at 440 (citing Singzon v. Department of Public Welfare, 496 Pa. 8, 436 A.2d 125 (1981).

Viewed under that standard, the facts are as follows. PennDOT leases portions of its right-of-way along Vine Street in Philadelphia to appellees who operate parking lots on the premises. Appellee Ezy Parks, Inc. leases nine separate properties from PennDOT. It entered into the earliest lease with PennDOT in 1973 its most recent in 1977. The remaining seven appellees each lease a single property. Their earliest lease dates back to 1971, while their most recent was obtained on June 1, 1980. Each lessee entered into a standard lease agreement with PennDOT which included a clause providing that "either party may terminate this agreement on thirty (30) days written notice to the other party." Pursuant to PennDOT's policy and procedure requiring bi-annual appraisal of "all rental properties", those in question were periodically appraised and the rental rates accordingly increased.

An officer of appellee Garden Parking testified that he told PennDOT officials, Mr. DeFelice and Mr. McQue, subsequent to signing his initial lease, that he didn't see how he could "stay on a month-to-month lease and still make the investments necessary to meet the regulations and requirements of the Licenses and Issuance Department of the City of Philadelphia." He further testified he was told by Mr. DeFelice and Mr. McQue that "until we need it [his parking lot] for Vine Street you're all right." Based on this representation and subsequent conversations with Mr. DeFelice and Mr. McQue, he made improvements to his lots which he claims cost him in excess of $20,000.00. ¹ An officer of Independence Hall Parking Lots, Inc. testified that he had made substantial improvements costing in excess of $60,000.00 following representations from Mr. DeFelice and Mr. McQue that he "would be there" from five to seven years or longer because the State did not have money to proceed with the Vine Street project. An officer of Ezy Parks testified his company made valuable improvements to seven lots leased from PennDOT based on assurances from George Bristol and Dan Miller from PennDOT's District Office. The parties stipulated that the remaining appellees would testify to the effect that they made substantial improvements based on the representations of PennDOT officials that the lease would last until the premises were needed for construction of the Vine Street Expressway. ²

Mr. John Felice testified that from 1970 through 1978 he was the property manager for PennDOT. He confirmed that he had made representations to some of the tenants that their leases would be continued until the properties were needed for the Vine Street Expressway, that he was given permission to do so by his superiors on the right-of-way staff and that such representations were consistent with PennDOT policy. It was stipulated that Joseph McQue, a real estate specialist in property management from 1966 to 1978, had personal contact with many of the tenants. He represented to the lessees that until PennDOT needed their properties for construction of the Expressway, they would be entitled to lease them. Mr. McQue understood that he was authorized to make such representations to the lessees.

On May 14, 1981 David C. Sims, Deputy Secretary for Highway Administration, advised each tenant that his lease would be terminated and new leases awarded by competitive bidding. ³ On May 31 the Department published advertisements inviting public bidding for the leases in question and scheduled opening for June 12, 1982. The bid instructions issued by PennDOT stated:

(t)hat the bid would be for land only, and that all personal property on the premises is assumed to be owned by the present occupant, whether the same be personalty, improvements to the land, or trade fixtures. However, as between PennDOT and present occupant, PennDOT reserves the right to take the position that certain items affixed to the premises are permanent improvements and therefore, the property of PennDOT.

By these specifications, Deputy Secretary Sims, a PennDOT official who authorized the bidding, said he intended to invite bids on improved lots. He interpreted the bid instructions to mean paving and other improvements would be included and pass to the high bidder as part of the land but admitted the bid instructions were unclear on this point. ⁴ The District Six Right-of-Way Administrator charged with administering the bidding process testified he believed that all of the appellees' improvements belonged to the Commonwealth and that the successful bidder would be entitled to these improvements without additional charge. However, PennDOT's Chief of the Right-of-Way Division testified it is the Department's position that the only improvements which belong to the Commonwealth are macadam.

With this factual background we proceed to consider the issues raised by appellants and turn first to the propriety of that portion of the Commonwealth Court's Order enjoining the award of contracts on PennDOT's bid specifications.

II

We note appellants do not directly attack the Commonwealth Court's jurisdiction to consider that portion of appellees' complaint seeking to enjoin the awarding of bids on these specifications by Commonwealth officials. Such suits do not fall within the "exclusive jurisdiction" of the Board of Claims which is authorized to "determine all claims against the Commonwealth arising from contracts hereinafter entered into with the Commonwealth where the amount in controversy exceeds $300.00 or more." ⁵ Our first inquiry then is whether there are "any reasonable grounds" supporting the Commonwealth Court's Order enjoining the award of bids. The purpose of bidding requirements was summarized by this Court in Yohe v. Lower Burrell, 418 Pa. 23, 28, 208 A.2d 847, 850 (1965).

Bidding requirements "are for the purpose of inviting competition, to guard against favoritism, improvidence, extravagance, fraud and corruption in the awarding of municipal contracts and to secure the best work or supplies at the lowest price practicable, and are enacted for the benefit of property holders and taxpayers, and not for the benefit or enrichment of bidders, and should be so construed and administered as to accomplish such purpose fairly and reasonably with sole reference to the public interest." (Footnotes omitted.) 10 McQuillan, Municipal Corporations § 29.29, at 266-67 (3rd ed. 1950).

When competitive bidding is used and the procedures followed emasculate the benefits of such...