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CHERRY PRESS v. REDEVELOPMENT AUTHORITY CITY PHILADELPHIA (11/19/73)

decided: November 19, 1973.

CHERRY PRESS, INC. AND PATRICK J. MCGINNIS, RECEIVER OF CHERRY PRESS, INC., APPELLANTS,
v.
THE REDEVELOPMENT AUTHORITY OF THE CITY OF PHILADELPHIA, APPELLEE



Appeal from the Order of the Court of Common Pleas of Philadelphia County in case of Cherry Press, Inc. and Patrick J. McGinnis, Receiver of Cherry Press, Inc. v. The Redevelopment Authority of the City of Philadelphia, No. 2535 July Term, 1968 and No. 490 March Term, 1972.

COUNSEL

Thomas B. Rutter, with him Adelman & Lavine, for appellants.

Peter A. Galante, with him James D. Crawford, for appellee.

President Judge Bowman and Judges Crumlish, Jr., Kramer, Wilkinson, Jr., Mencer, Rogers and Blatt.

Author: Per Curiam

[ 11 Pa. Commw. Page 49]

The order of the lower court is affirmed upon the opinion of Judge Barbieri which, not being reported elsewhere, is as follows:

Opinion

Barbieri, J.:

This is an eminent domain case in which the issues before the Court arise out of what is alleged to be a condemnation and "taking" of property of Cherry Press, Inc. (Cherry) by the Redevelopment Authority of the City of Philadelphia (Authority). At the time when the taking was claimed to have occurred, Cherry was a tenant in a multi-story industrial building known as the Glynn Building located at 414-16 North Third Street, Philadelphia, Pennsylvania. Certain real estate in the area had been condemned with an appropriate declaration of taking publicly filed as of August 2, 1968, known as the "Callowhill East Urban Renewal Area." That public taking specifically excluded certain buildings in a small area of the general taking, including the Glynn Building. Subsequently, the Authority took title to the Glynn Building by deed pursuant to an agreement of sale dated December 9, 1969, under which settlement was made on January 7, 1970. Included in the purchase of the property for $390,000 was an assignment of leases of all tenancies in the building including Cherry's. Cherry's lease agreement, dated September 1, 1960, provided for an initial term of five years, with a one year term, renewable from year to year thereafter for failure to give notice of termination ninety days prior to the end of any such annual term. The annual term in effect as of January 8, 1970, when the lease was assigned, was terminable as of September 1, 1970, by either party,

[ 11 Pa. Commw. Page 50]

    by the Authority or by Cherry, upon giving of the ninety days' notice.

Since neither the Authority nor Cherry gave notice, the tenancy of Cherry was automatically renewed for an additional term of a year. Then, on April 15, 1971, well within the ninety days' period of notice required in order to terminate as of September 1, 1971, notice to vacate was sent to Cherry. It is this notice to vacate given on a form letter used in condemnation cases that Cherry claims is a notification that, in itself, constituted a "taking" within the meaning of the Eminent Domain Code of 1964.*fn* Although this letter called for vacating the premises "within Ninety (90) days from the date of service of this notice . . . ," which would have called for relinquishment of possession before September 1, 1971, the end of the current term, possession was not required by the Authority and was not surrendered by Cherry until February of 1972.

The extensive litigation that evolved following the vacating of the premises by Cherry took two directions. The first line of proceedings arose out of a stipulation of counsel dated December 22, 1971 and filed on January 31, 1972, docketed to the "taking" caption as of July Term, 1968, No. 2535, and the second was filed by Cherry for Board of View treatment as of March Term, 1972, No. 490. We will briefly outline the course taken in each of these proceedings which are both captioned in the litigation now pending before this court.

The first course of proceedings, as noted, was initiated by the stipulation filed in the Callowhill East condemnation matter of 1968. This stipulation appears to have been presented in connection with certain Amended Preliminary Objections to the Declaration of Taking filed by the Authority. The judge who had the preliminary objections before him marked the stipulation

[ 11 Pa. Commw. Page 51]

"Approved," and then signed an "Amended Order" overruling the preliminary objections ". . . without prejudice to plaintiff's rights to file a Petition for a Board of View to determine damages, if any, sustained by the lessee/tenant, Cherry Press, Inc., occupant of premises 406-416 North Third Street, Philadelphia, Pennsylvania. The Court makes no substantive ruling on the Alternative Motion for Judgment contained in the Amended Preliminary Objections, the same not being before the Court in proper form."

In the stipulation it was stated that the Authority, after an appraisal which fixed the value of Cherry's loss at $744,450.00, had made an offer "to the condemnee in full settlement of its claims, $705,000.00 . . . ," which offer allegedly was accepted on August 5, 1971. The stipulation further avers that "on or about September 15, 1971, the Legal Division of the Redevelopment Authority advised condemnee that the settlement would not be consummated, as agreed, on or before September 30, 1971, and that the Redevelopment Authority would take the position that it had not condemned this premises and is not liable to pay any compensation to Cherry Press, Inc." Despite this averment of the Authority's legal contention that no condemnation had taken place, the stipulation, nevertheless, was signed by an attorney for the Authority and an attorney for Cherry. Paragraph 3 contains the following: "3. By Declaration of Taking filed in this proceeding on August 2, 1968, the Redevelopment Authority condemned real estate lying within the Callowhill East Urban Renewal Area pursuant to an Urban Renewal Plan requiring subject premises to be demolished in part, reconstructed in part, and requiring all tenants of subject premises, including Cherry Press, Inc., to be dispossessed." (Emphasis added.)

The emphasized language in the above quotation states an untruth in the light of the record in this case.

[ 11 Pa. Commw. Page 52]

As we have noted, plaintiff's leasehold interest was not affected by the 1968 taking.

Although the order containing the "without prejudice" statement was dated March 10, 1972, the record indicates that a petition for Board of View was filed on March 8, 1972.*fn** This petition for a Board of View was rejected by the Board, marked "Void," on the ground that there had been no condemnation to support the petition.

The next step in the morass of litigation in this case, in which at least five judges of this court have participated at one time or another, took the form of a rule entered on May 2, 1972 to show cause why the Authority, named as "condemnor," should not make settlement and payment pursuant to the stipulation filed on January 31, 1972. Testimony was then taken at length before Cody, J., which resulted in an order by him dated May 9, 1972, that there had been a condemnation and taking by the Authority "of the property of Cherry Press, Inc., condemnee, by eminent domain; that the condemnee is entitled to just compensation caused by the taking; and that there has been no binding agreement between the condemnor and the condemnee as to the nature and amount of such compensation." Judge Cody's order discharged the rule of May 2, 1972, "without prejudice," and noted that "the parties having agreed to waive proceedings before a Board of View, in accordance with the provisions of Section 520 of the Eminent Domain Code, they are hereby directed to proceed forthwith to trial before a judge and jury to determine the amount of compensation due the condemnee under the provisions of the applicable sections of Article VI as amended of the Eminent Domain

[ 11 Pa. Commw. Page 53]

Code, and to be prepared to proceed with such trial not later than Monday, May 15, 1972."

The portion of this order which holds that there was a "condemnation and taking" by the Authority is actually at variance with certain unequivocal testimony offered on behalf of the Authority in the hearing before Judge Cody. An explanation is provided by Cherry's counsel in his latest brief, as follows: "First, it must be remembered that Judge Cody's Order finding a condemnation arose after two days of hearings on a Petition to enforce a settlement agreement between the Authority and Cherry Press, Inc. In exchange for Cherry Press' agreement not to insist on the settlement previously agreed upon, the Authority agreed to withdraw its contention that there was no condemnation. In a word, the Authority's present position is an attempt to renege on an agreement entered into in the context of ongoing litigation."

The "settlement agreement" referred to does not appear of record by testimony or stipulation. Such an agreement, however, while it would account for the terms of the order, would not, in our view, have the legally binding effect contended for by Cherry. If Judge Cody was simply approving an agreement as the plaintiff asserts, then the approval would be just as vulnerable as was the stipulation of December 22, 1971. Thus, if counsel's agreement was based upon foundations illegally advanced, the order could have no res judicata effect. In fact, this same issue involving the same uncondemned area in which the Glynn Building is located was before the Commonwealth Court in the case of Redevelopment Authority of the City of Philadelphia v. L. & A. Creative Art Studio, Inc., 6 Pa. Commonwealth Ct. 326, 294 ...


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