Rufo v. Bd. of License & Inspection Review

• Decision Date: 13 September 2018
• Docket Number: No. 22 EAP 2017,22 EAP 2017
• Citation: 192 A.3d 1113
• Parties: Anthony M. RUFO and TR Gretz, LP v. BOARD OF LICENSE AND INSPECTION REVIEW and City of Philadelphia Appeal of: The City of Philadelphia
• Court: Pennsylvania Supreme Court

192 A.3d 1113

Anthony M. RUFO and TR Gretz, LP

v. BOARD OF LICENSE AND INSPECTION REVIEW and City of PhiladelphiaAppeal of: The City of Philadelphia

No. 22 EAP 2017

Supreme Court of Pennsylvania.

Argued: May 16, 2018

Decided: September 13, 2018

Richard Gerson Feder, Esq., for City of Philadelphia, Appellant.

Meredith S. Auten, Esq., A. Lauren Carpenter, Esq., R. Brendan Fee, Esq., Timothy Joseph Geverd, Esq., Morgan, Lewis & Bockius LLP, Michael Churchill, Esq., Public Interest Law Center of Philadelphia, for Phila. Assoc. of Community Dev. Corporations, Tacony Community Dev. Corp., et al., Appellant Amicus Curiae.

David Ezra Kahn, Esq., University of Pennsylvania, for University of Pennsylvania and University of Pennsylvania Health System, Appellant Amicus Curiae.

Richard Camillo DeMarco, Esq., for Rufo, Anthony M., TR Getz, LP, Appellee.

SAYLOR, C.J., BAER, TODD, DONOHUE, DOUGHERTY, WECHT, MUNDY, JJ.

OPINION

JUSTICE BAER

The Property Maintenance Code ("Code") consists of a series of ordinances promulgated by the City of Philadelphia ("City") to regulate the maintenance of properties located in the City. This appeal involves a constitutional challenge to a provision of the Code that requires owners of vacant buildings that are a "blighting influence," discussed infra , to secure all spaces designed as windows with working glazed windows and all entryways with working doors. Appellees, owners of a vacant property that was cited for violating this ordinance ("Owners"), challenged the provision, contending, inter alia , that it is an unconstitutional exercise of the City's police power. The City's Board of License and Inspection Review ("Board") rejected Owners' arguments; however, the trial court agreed with Owners and deemed the ordinance unconstitutional. The Commonwealth Court affirmed, concluding that the ordinance is an unconstitutional exercise of the City's police power because it is concerned with the aesthetic appearance of vacant buildings, not the safety risks posed by blight. For the reasons set forth herein, we hold, respectfully, that the Commonwealth Court and trial court erred in this regard. Consequently, we vacate the orders of the Commonwealth Court and trial court, and remand the matter to the trial court for consideration of Owners' remaining issues.

The record establishes that the building at issue in this appeal, which was previously home to Gretz Brewing Company, is located in the City at 1524 Germantown Avenue (the "Property"). In August of 2003, Appellee TR Gretz, L.P.,¹ purchased the Property, which was and continues to be vacant. Appellee Anthony M. Rufo ("Rufo") describes himself as the general managing partner of TR Gretz, L.P. (Again, we will refer to Appellees collectively as "Owners.")

On May 14, 2012, the City's Department of License and Inspection ("Department") conducted an inspection of the Property. The following day, the Department issued an "Initial Notice of Violation and Order." Therein, the Department, inter alia , declared the Property to be a "blighting influence" on the community and in violation of Section PM-306.2 of the Code.² Section PM-306.2 stated, in full, as follows:

The owner of any vacant building shall keep the interior and exterior of the premises free of garbage and rubbish. The owner of any vacant building shall keep all doors, windows and openings from the roof or other areas in good repair. Where such doors or windows or entrance to openings are readily accessible to trespassers, they shall be kept securely locked, fastened or otherwise secured. The owner shall take any other measures prescribed by the Department to prevent unauthorized entry to the premises by closing all openings with materials approved by the Department. A vacant building, which is not secured against entry, shall be deemed unsafe within the meaning of Section PM–307.0. The owner of a vacant building that is a blighting influence, as defined in this subcode, shall secure all spaces designed as windows with windows that have frames and glazing and all entryways with doors. Sealing such a property with boards or masonry or other materials that are not windows with frames and glazing or entry doors shall not constitute good repair or being locked, fastened or otherwise secured pursuant to this subsection.

Code at § PM-306.2 (repealed and replaced) (emphasis added).

Owners lodged an appeal with the Board, contending, inter alia , that Section PM-306.2 of the Code violates constitutional principles of substantive due process. In this regard, Owners asserted that Section PM-306.2 is invalid and unconstitutional "because its purpose is to compel a property to be aesthetically pleasing, rather than safe, which is not the proper use of the municipalities' [sic ] police power." Addendum to Appeal, 6/8/2012, at ¶ 7. The appeal was continued several times to allow the parties to resolve some of the problems with the Property, but a three-member panel of the Board eventually held hearings to address the parties' remaining issues on May 13^th and July 22^nd of 2014.

At those hearings, the following witnesses testified in a manner that was generally favorable to Owners: (1) Rufo; (2) Rufo's son, Anthony J. Rufo ("Son"); and (3) Mark Wade, a realtor. One witness testified for the City, namely, Rebecca Swanson, a Policy and Communications Officer for the Department. For ease of discussion, we first will summarize the testimony offered by Rufo, Son, and Wade, followed by a summary of Swanson's testimony.

Rufo acknowledged that the Property continued to be in violation of the Code insomuch as 31 of the Property's 40 windows failed to comply with Section PM-306.2. N.T., 5/13/2014, at 23-26. Rufo, however, testified that within a week of putting three new windows in the Property, they were broken. Id. at 28. Rufo also acknowledged that the parties previously had agreed that Owners could clear the Code violations by either demolishing the Property or obtaining a zoning permit to start to develop the Property. Owners were unable to accomplish either option for various reasons. Id. at 26-31.

During his testimony, Son, who is in business with Rufo, conceded that the Property was in "poor to blighted condition" when Owners purchased it. Id. at 65. Son testified that, since Owners bought the Property, they have had to invest $500,000 to $600,000 into it for maintenance purposes. Id. at 66-67. Son explained that, to secure the Properties' various doors and windows, they utilized "structural materials, such as masonry and steel."Id. at 70. At this point in Son's testimony, a member of the Board asked Son whether he could put structural materials behind a window if he was concerned about people getting into the building, and Son answered, "Technically, yes, I could." Id. at 70-71. Throughout his testimony, Son insisted that the Property is secure and inaccessible to people and that putting windows and doors on the building would invite squatters and vandalism, though he also acknowledged that other occupied properties in the area, such as a mosque, do not have broken windows. Id. at 85.

Owners lastly offered Wade's testimony over the City's relevancy objection. N.T., 7/22/2014, at 2-11. At the time of the hearing, Wade was a realtor with 25 years of experience with real estate in the City. Id. at 11-12. Wade described the Property "as a giant eyesore." Id. at 13-14. According to Wade, the addition of windows and doors to a vacant building, such as the Property, increases the value of the building only by an amount equal to the value of the doors and windows. Id. at 14-16. Wade also asserted that the addition of windows to the Property would not reduce blight. Id. at 21. However, upon questioning from the Board, Owners' counsel conceded that Wade could not testify as an expert on the noneconomic benefits of community cohesion or crime reduction. Id. at 23. Further, Wade admitted that: (1) his area of expertise in the real estate business was residential; (2) he was not an urban planner; and (3) he had never conducted research on blight and how it affects the quality of life in a neighborhood. Id. at 23-25.

However, Swanson, the Policy and Communications Director for the Department, testified that the City originally passed Section PM-306.2, which she referred to as the "Windows and Doors Ordinance," in 2003 and began enforcing the ordinance in 2011 "with an eye towards reducing blight in neighborhoods throughout the City." N.T., 5/13/2014, at 45. Swanson further testified that "[i]t's been determined, through numerous studies, that properties with boarded windows and doors without the actual operable window and door contribute to blight with the neighborhood[.]"³ Id. at 45-46. Swanson stated that the City utilized several studies in crafting the five "blight influencing" factors listed in Section 202.0(2) of the Code, supra at 1115 n.2. N.T., 5/13/2014, at 50-51. Swanson specifically referenced two studies: (1) Vacant Land Management in Philadelphia; and (2) Blight Free Philadelphia. Id. at 51-54. Counsel for the City entered these studies into evidence as exhibits. Id. Swanson also testified that, although the Code does not define "morale" (i.e. , one of the five "blight influencing" factors), the City considers complaints from residents regarding properties. Id. at 56. According to Swanson, the City has received a large number of complaints about the Property. Id.

On May 18, 2015, the Board affirmed the City's notice of violation and order. In support of its decision, the Board issued findings of facts and conclusions of law. Relevant to the issues before this Court, the Board, reflecting on Son's testimony, stated that Owners "could install windows and doors as required by the Code and put masonry and wood behind them if [they were] concerned about people getting into the [Property]." Board's Findings of Fact, 5/18/2015, at ¶ 17 (citing N.T., 5/13/2014, at 71). The Board also found Swanson's testimony to be credible and that ...