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GOLDEN MOTORS v. SOUTHERN MOTORS COMPANY AND EQUIPMENT LEASING AUTHORITY PHILADELPHIA AND CITY PHILADELPHIA (06/13/85)

decided: June 13, 1985.

GOLDEN MOTORS, INC., APPELLANT
v.
SOUTHERN MOTORS COMPANY AND EQUIPMENT LEASING AUTHORITY OF PHILADELPHIA AND CITY OF PHILADELPHIA, APPELLEES



Appeal from the Order of the Court of Common Pleas of Philadelphia County in the case of Golden Motors, Inc. v. Southern Motors Company v. Equipment Leasing Authority of Philadelphia and City of Philadelphia, No. 2374 July Term, 1978.

COUNSEL

Sol H. Weiss, with him, Margaret R. Connors, Anapol, Schwartz, Weiss & Schwartz, for appellant.

Patrick J. Broderick, with him, Thomas J. Gregory, Broderick & Karaszkiewicz, for appellee, Southern Motors Company.

Judges Craig and Colins and Senior Judge Kalish, sitting as a panel of three. Opinion by Judge Colins.

Author: Colins

[ 90 Pa. Commw. Page 138]

In this appeal we must determine whether Golden Motors, Inc., (Golden) shall be disqualified from submitting bids or otherwise entering into contracts with the Equipment Leasing Authority of Philadelphia (E.L.A.), due to it being partly owned by Salvatore Miluzzo (Miluzzo), a lieutenant in the Philadelphia Fire Department. Appellee, Southern Motors, sought a declaratory judgment that the right of Golden to bid and contract with E.L.A. violates Section 10-102*fn1 of the Philadelphia Home Rule Charter (Charter). The trial court ruled that Golden did, in fact, violate Section 10-102 of the Charter and enjoined it from further conducting business with the E.L.A. For the reasons hereinafter stated, we affirm.

[ 90 Pa. Commw. Page 139]

Both Golden and Southern are authorized Chrysler automobile dealerships doing business in Philadelphia, Pennsylvania. They are competitors, not only generally, but also in the process of bidding on contracts for the supply of motor vehicles to the City of Philadelphia.

Prior to 1976, the City procured its automobiles directly through its Procurement and Public Property Departments. However, on December 23, 1975, pursuant to the provisions of the Municipalities Authorities Act of 1945,*fn2 the City authorized the establishment of the E.L.A. On January 9, 1976, the E.L.A. was incorporated, and on August 30, 1976, City Council, in Bill No. 350, authorized the City's Procurement Commissioner, on behalf of the City, to enter into leases with the E.L.A. This Ordinance specified the leasing contract to be used between the City and the E.L.A., and contemplated the use of equipment revenue notes insofar as financing was concerned. On November 21, 1977, this Ordinance was amended by City Council, in Bill No. 996, to make provision for the issuance of equipment revenue bonds by the E.L.A. The new ordinance again spelled out the form of lease to be entered into between the City and the E.L.A. On March 1, 1977, the City and the E.L.A. entered into an "Agreement of Lease".

Under this new system of leasing, equipment acquisition approval and bid specifications would be developed within certain city departments. Bid specifications would then be forwarded to the E.L.A. which would, in turn, contact local banking institutions in order to formulate an agreement as to the amount and type of funding which would be made available to the E.L.A. on a particular procurement. When sufficient funds were pledged by the banking institutions,

[ 90 Pa. Commw. Page 140]

    invitations to bid would be sent out to interested suppliers, in this instance automobile dealers, among which was Golden.

Golden was the lowest bidder on a number of invitations to bid promulgated by the E.L.A. Thereafter, Southern alleged that Golden had violated Section 10-102 of the Charter by bidding on, or ...


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