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KING ATHLETIC GOODS COMPANY v. REDEVELOPMENT AUTHORITY (07/01/74)

SUPREME COURT OF PENNSYLVANIA


decided: July 1, 1974.

KING ATHLETIC GOODS COMPANY
v.
REDEVELOPMENT AUTHORITY, APPELLANT

Appeals from decree of Court of Common Pleas, Trial Division, of Philadelphia, Sept. T., 1969, No. 6300, in case of King Athletic Goods Company and Pro Sporting Goods Company v. Redevelopment Authority of the City of Philadelphia.

COUNSEL

James D. Crawford, with him Richard D. Malmed and Randall E. Ellington, for appellant at No. 81 and appellee at No. 92.

Joseph R. Livesey, with him Kates, Livesey & Edelstein, for appellants at No. 92 and appellees at No. 81.

Jones, C. J., Eagen, O'Brien, Roberts, Pomeroy, Nix and Manderino, JJ. Opinion by Mr. Justice Eagen. Mr. Justice Manderino dissents. Dissenting Opinion by Mr. Justice Roberts.

Author: Eagen

[ 457 Pa. Page 18]

On August 2, 1968, the Redevelopment Authority of the City of Philadelphia [The Authority] filed a declaration of taking in the Court of Common Pleas of Philadelphia, for the area described as Callowhill East Urban Redevelopment Area. Included in this condemnation was a property located at 434-436 North Third Street, Philadelphia, which King Athletic Goods Company and Pro Sporting Goods Company both occupied and used in the manufacture and sale of athletic goods and equipment. [For convenience these businesses will be referred to herein as one, and the two companies will be referred to as King]. However, in its business King also occupied and used a property at 412-416 North Third Street, Philadelphia, which premises were not included in the condemnation. King filed preliminary objections to the declaration of taking alleging it was void because, inter alia, it excluded the premises at 412-416 North Third Street which was a necessary part of its business operation.*fn1

To resolve the dispute, King and The Authority entered into a written agreement on December 2, 1968, "Terminating Litigation and Making Provisions for Sundry Actions." The essence of this agreement was

[ 457 Pa. Page 19]

    that the property at 434-436 North Third Street and that at 412-416 North Third Street were to be treated as if both "had been condemned by the Authority." The agreement also provided that the "moving expenses"*fn2 [moving of King's personal property to a new location] and the expenses of disconnection, removal and reinstallation of King's machinery, equipment and fixtures*fn3 were to be processed the same as if both were "regular and ordinary moving costs."*fn4

Subsequently, King obtained a relocation site at 2615 Hunting Park Avenue in Philadelphia. On April 22, 1969, after extensive correspondence between the attorney representing King and The Authority, King submitted to The Authority three bids for the moving of its "personal property" to the new location. The lowest bid was submitted by Louderback-North American, Inc. [Louderback]. On May 12th, King's attorney wrote The Authority asking its approval for King to move to the new location without first obtaining the required bids for moving its equipment, machinery and fixtures. The letter stated that King was in the process of obtaining these bids "from general contractors" and the bids should be received "within the next few days";

[ 457 Pa. Page 20]

    that it "was necessary to immediately vacate the premises 416 North Third Street"; that King was willing to pay Louderback directly and after this payment and "approval of the general contracting work, they would look for reimbursement from The Authority for that which they paid to Louderback." On May 15th, The Authority wrote directly to Louderback saying it "had received its estimate" and Louderback was authorized "to perform the moving." Louderback commenced the moving on May 24, 1969, which continued until June 4th, when it was terminated by King. As of June 4th, a substantial part of the moving had been accomplished, but part of King's inventory, machinery, equipment and fixtures still remained at the old location.

On June 23, 1969, King finally submitted three bids to The Authority for the moving of its machinery, equipment and fixtures. However, The Authority found certain problems with the bids and notified King of these general questions, but not of the specifics. On June 27th, King's attorney wrote to The Authority and demanded a resolution of the controversy, and suggested that if one was not immediately forthcoming, King would be forced to finance the relocation costs and seek reimbursement from The Authority. In a letter dated July 3rd, King's attorney notified The Authority that any further delay was intolerable, and he was instructing his clients to contract on its own for the moving and reinstallation of its machinery, equipment and fixtures. Despite this notification, King on July 29, 1969, through its attorney, submitted three revised bids to The Authority for the moving and relocation of the machinery, equipment and fixtures to the new business address.*fn5

When no resolution of the controversy ensued, King filed a complaint in equity on September 26, 1969, alleging

[ 457 Pa. Page 21]

The Authority was delaying King's moving to the new location by arbitrarily refusing to approve one of the bids it submitted for the relocation and reinstallation of its machinery, equipment and fixtures. In this complaint, King requested the court to order The Authority to comply with the agreement of the parties entered into on December 2, 1968, more specifically to order The Authority to authorize and pay for the moving of King's machinery, equipment and fixtures to its new business location. Damages were also requested from The Authority for the loss incurred by King as a result of the delay in the moving.

On October 13, 1969, King entered into a contract with Keystone Construction Company to perform the work necessary for the reinstallation of its machinery, equipment and fixtures at 2615 Hunting Park Avenue. Louderback then resumed the moving interrupted on June 4th. The moving was completed in January 1970.

The trial ensued in June 1972, King requested damages totaling $245,000. This included the money King had expended in the relocation and reinstallation of its machinery, equipment and fixtures, plus the amount allegedly lost in its business operation from June 4, 1969, to January 1970, due to the delay in the moving and re-establishment of its facilities at the new location. Subsequently, the chancellor entered an adjudication and decree nisi awarding King damages in the amount of $67,359.47, covering the money it had expended for the relocation and reinstallation of its machinery, equipment and fixtures. The chancellor refused to award King any damages for the losses allegedly suffered in its business operation between June 4, 1969, and January 1970, because he concluded The Authority was not "solely responsible for the delay" in the moving to the new business location. Both sides filed exceptions to the adjudication and decree nisi. A court en banc later dismissed these exceptions and

[ 457 Pa. Page 22]

    made the decree nisi final. Both King and The Authority filed an appeal in this Court.*fn6

King assigns as error the refusal of the trial court to award it damages for the losses suffered in its business operation through the delay in moving to the new business location. While The Authority asserts several assignments of error, we need discuss only one because it is dispositive of both appeals.

The agreement entered into by King and The Authority on December 2, 1968, upon which King's claim must rest or fall provided as follows: "The Authority pay and/or reimburse King Athletic Goods Company and Pro Sporting Goods Company for relocation expenses incurred by them upon their vacation from Premises 434-36 North 3rd Street, Philadelphia, Pennsylvania and 416 North 3rd Street, Philadelphia, Pennsylvania, to the same extent as if both said premises had been condemned by the Authority." [Emphasis supplied.]

In our view, the intent of the agreement, as expressed in the foregoing provision, was to grant King the benefit of the Eminent Domain Code "to the same extent as if both said premises had been condemned by

[ 457 Pa. Page 23]

    the Authority."*fn7 And the Eminent Domain Code expressly limited the amount a claimant may receive to cover the cost of removing machinery, equipment and fixtures from the condemned site to a new location to $25,000.*fn8 Hence, as a matter of law, King's recovery may not exceed this amount.

The decree is vacated, and the record is remanded for the purpose of entering a decree in accordance with this opinion. Each side to pay own costs.

Disposition

Decree vacated and record remanded.

Dissenting Opinion by Mr. Justice Roberts:

I dissent and would transfer the appeal to the Commonwealth Court. Appellate Court Jurisdiction Act of 1970, Act of July 31, 1970, P.L. 673, art. V, § 503(b), 17 P.S. § 211.503(b) (Supp. 1974). This appeal involves a proceeding arising under the Eminent Domain Code, and appellate jurisdiction of "[a]ll proceedings arising under the Eminent Domain Code" is properly in the Commonwealth Court. Id. art. IV, § 402(6), 17 P.S. § 211.402(6) (Supp. 1974).


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