John H. Auld & Bros. Co. v. Gca, L.P.

• Decision Date: 19 December 2012
• Docket Number: No. 2310 C.D. 2011,2310 C.D. 2011
• Parties: John H. Auld & Brothers Company and GCA, L.P., and Howard S. Auld & Associates, and Allison Park Real Estate, Displaced Tenants v. The Township of Hampton Appeal of: GCA, L.P.
• Court: Pennsylvania Commonwealth Court

John H. Auld & Brothers Company and GCA, L.P., and Howard S. Auld &Associates, and Allison Park Real Estate, Displaced Tenants v. The Township of HamptonAppeal of: GCA, L.P.

No. 2310 C.D. 2011

COMMONWEALTH COURT OF PENNSYLVANIA

Argued: November 13, 2012

December 19, 2012

BEFORE: HONORABLE ROBERT SIMPSON, Judge HONORABLE PATRICIA A. McCULLOUGH, Judge HONORABLE JAMES GARDNER COLINS, Senior Judge

OPINION NOT REPORTED

MEMORANDUM OPINION BY JUDGE McCULLOUGH

GCA, L.P. (GCA) appeals from the November 16, 2011 order of the Court of Common Pleas of Allegheny County (trial court), which made final the court's June 18, 2009 order denying GCA's motion for leave to file preliminary objections nunc pro tunc to the declaration of taking filed by the Township of Hampton (Township). GCA contends that it proved cause sufficient to permit the untimely filing of preliminary objections because the only individual authorized to act on GCA's behalf did not receive actual notice of the declaration until after the time for filing preliminary objections had passed. GCA also argues that the trial court abused its discretion in admitting evidence that violated the attorney-client privilege. Finding no merit in GCA's contentions, we affirm.

GCA is the sole title owner of property located in Allison Park, Allegheny County, Pennsylvania (Property). The Property was owned previously by Gladys Auld, who conveyed all of her interest in the Property to GCA for estate planning purposes. GCA is a limited partnership. The limited partners are Howard S. Auld and Sondra Schwartz, and the general partner of GCA is Auld Corner Company, LLC (Auld Corner). The only member of Auld Corner is Judith Kantor, Gladys Auld's niece. Judith Kantor resides in Rockville, Maryland. (Reproduced Record (R.R.) at 417-18; Trial court op. at 8-9.)

GCA hired Gladys Auld and her company, Allison Park Real Estate, to manage the Property. GCA admits that as part of her duties, Gladys Auld performed much of the day-to-day management of the Property and that she has signed and verified litigation pleadings as the "Manager" of GCA. (GCA's brief at 9; R.R. at 447-48, 503.)

The Township sought to condemn the Property in an eminent domain proceeding and filed a declaration of taking on December 18, 2008. By certified mail dated January 5, 2009, the Township sent notice of condemnation to GCA at the Property, its last known business address.¹ Donna Barch, a secretary for Howard S. Auld & Associates, a tenant on the Property, signed for the mailing and delivered it to Gladys Auld by January 6, 2009. As early as January 1, 2009, Gladys Auld hired Attorney Mitchel Zemel to represent GCA in the eminent domain proceedings. OnJanuary 20, 2009, Attorney Zemel officially entered his appearance on behalf of GCA. During the months of January and February, Attorney Zemel had conversations with Gladys Auld regarding the eminent domain proceedings and engaged in conversations and correspondence with the Township's attorney. (R.R. at 2-34, 88, 91, 508.)

Section 406(a) of the Eminent Domain Code permits a condemnee to file preliminary objections to a declaration of taking within 30 days of being served with a notice of condemnation. 26 Pa. C.S. §406(a).² GCA was obligated to file preliminary objections on or before February 4, 2009. On May 6, 2009, Attorney Shawn Flaherty praeciped to substitute counsel and entered his appearance as attorney for GCA. On May 13, 2009, GCA filed a Motion for Leave to File Preliminary Objections Nunc Pro Tunc, which was amended on June 5, 2009. In the amended motion, GCA alleged that: Gladys Auld lacked the authority to act on GCA's behalf or to retain Attorney Zemel as counsel; Kantor, as the general partner of GCA, was the only person who had authority to hire counsel; and Judith Kantor was not informed of the taking or notified of her right to file preliminary objections until well after the deadline to file had passed. (R.R. at 37-39, 117-19.)

The trial court conducted a hearing. At the hearing, Attorney Zemel testified, over objection by GCA on grounds of attorney-client privilege, that he discussed the possibility of filing preliminary objections, ostensibly with Gladys Auldand Kantor.³ Attorney Zemel admitted that he did not get authorization from Auld Corner, via Kantor, to represent GCA in the eminent domain proceedings. However, Attorney Zemel testified that he spoke to Gladys Auld, Howard S. Auld, and Sondra Schwartz, who gave him authorization to represent GCA and led him to believe that they were the only partners of GCA. (R.R. at 352-54, 368-69.)

Kantor testified that she did not authorize Attorney Zemel to represent GCA in the eminent domain proceedings and that Gladys Auld was not authorized to hire legal counsel on behalf of GCA. Kantor testified that she met with Gladys Auld and Attorney Zemel on March 17, 2009, and this was the first time Attorney Zemel informed her that preliminary objections could be filed.⁴ According to Kantor, at the end of the meeting, she understood that Attorney Zemel would send her a letter of representation and thereafter draft preliminary objections. Kantor testified that because she did not receive a letter from Attorney Zemel until April 17, 2009, she decided to obtain other counsel. (R.R. at 384-87, 396-98.)

Gladys Auld testified that she was the "manager" of GCA and could "go ahead and do what [she] wanted with it, pretty much." Gladys Auld further testified that she received the consent of Kantor to hire Attorney Zemel for the condemnation proceedings. (R.R. at 457-58, 483-84.)

On June 18, 2009, the trial court denied GCA's motion for leave to file preliminary objections nunc pro tunc.⁵ In pertinent part, the trial court reasoned as follows:

This Court recognizes the legal entity known as [GCA], and the fact that Kantor has legal authority over this organization. However, it is disingenuous to hide behind this corporate ruse when the testimony clearly indicates that [Gladys] Auld, for all intents and purposes, controlled this property and acted as its authorized agent. To charge [the Township] or any municipality with a duty to investigate multiple corporate filings to uncover the existence of Kantor in Rockville, Maryland, would be unreasonable, while at the same time [Gladys] Auld is holding herself out to members of [the Township] and Attorney Zemel as the property owner, to the extent that Attorney Zemel was authorized and paid to enter his appearance for GCA.

* * *

Additionally, this Court considered whether [the Township] is partly responsible for the delay, as this would be a factor in the decision whether to allow the filing of preliminary objections nuncprotunc. This Court finds no failure on the part of [the Township] in their [sic] service to condemnees.

[T]he credible testimony showed that Gladys Auld was aware of a proposed taking well prior to the actual filing of the Declaration; at all times prior to the taking Gladys Auld was an authorized agent of GCA, [and she was] authorized to accept service for GCA. ...

(Trial court op. at 9, 11.)

On January 13, 2010, the Township filed a petition for appointment of a board of viewers, which issued a report on February 2, 2011, awarding GCA justcompensation in the amount of $651,000.00. The Township then filed an appeal to the trial court but withdrew the appeal on November 10, 2011. On November 16, 2011, the trial court entered judgment on the report of the board of viewers, and GCA filed a timely notice of appeal.⁶

On appeal, GCA concedes that the Township complied in all respects with the service and notice requirements of the Eminent Domain Code, in that service was properly effectuated at GCA's last known business address. GCA does not claim that its principal place of business was located somewhere other than the Property, and it does not dispute that Donna Barch and Gladys Auld were authorized to receive service on its behalf. In addition, GCA emphasizes that it is not in any way faulting Attorney Zemel for the filing of untimely preliminary objections.

However, GCA argues that it is a limited partnership and that only the managing partner, Auld Corner, through its sole member Kantor, is vested with authority to exercise control and management of the limited partnership's business. Citing Department of Revenue for Bureau of Accounts Settlement v. McKelvey, 526 Pa. 472, 587 A.2d 693 (1991), GCA contends that "notice to someone other than the general partner is, in general, ineffective notice to the limited partnership," thus suggesting that it was necessary for Kantor to receive individual, actual notice. (GCA's brief at 21.) GCA also claims that the "predominate weight of the testimony" showed that Gladys Auld did not have the authority to "act as agent forGCA in the eminent domain proceeding." (GCA's brief at 22.) GCA emphasizes the fact that Gladys Auld was hired only as a property manager for the Property, notes that she had no ownership interest in the Property, and asserts that she exceeded her authority when she undertook the legal affairs of GCA in the eminent domain proceedings without having first received authorization from Kantor.

Similarly, GCA argues that Attorney Zemel lacked the authority to represent GCA in the eminent domain proceedings. GCA points to Kantor's testimony that she did not hire Attorney Zemel to represent GCA in these proceedings and did not authorize Gladys Auld to hire him. GCA also points out that Gladys Auld paid Attorney Zemel with her own money. Ultimately, GCA contends that the trial court's finding that Attorney Zemel had authority to represent GCA is "against the weight of the evidence." (GCA's brief at 26.)

Essentially, GCA's contentions do nothing more than challenge the trial court's weight and credibility determinations. Gladys Auld signed and verified legal pleadings as "Manager of GCA," and testimony established that she played a significant role in the day-to-day operations of GCA and was vested with broad...