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A. DANIELLE ROUSSEAU v. CITY PHILADELPHIA (08/29/86)

decided: August 29, 1986.

A. DANIELLE ROUSSEAU, APPELLANT
v.
CITY OF PHILADELPHIA, APPELLEE



Appeal from the Order of the Court of Common Pleas of Philadelphia County in the case of A. Danielle Rousseau v. City of Philadelphia, No. 838 September Term, 1981.

COUNSEL

Harold R. Berk, for appellant.

Pamela Foa, Deputy City Solicitor, with her, Susan Shinkman, for appellee.

President Judge Crumlish, Jr., Judge Barry, and Senior Judge Rogers, sitting as a panel of three. Opinion by Judge Barry.

Author: Barry

[ 100 Pa. Commw. Page 174]

This appeal results from an order of the Philadelphia County Court of Common Pleas which sustained preliminary objections in the nature of a demurrer filed

[ 100 Pa. Commw. Page 175]

    by the City of Philadelphia (City), appellee, in response to the complaint in assumpsit and trespass filed against it by the appellant herein, A. Danielle Rousseau (appellant).

In 1977 the appellant applied to the city to obtain a "Section 312" loan, a form of financing available to certain homeowners in order to make repairs and improvements to eliminate housing code deficiencies. Such loans are the result of federal legislation, and the financing itself consists of federal funds; the city, however, administers the program under a cooperation agreement with the federal Department of Housing and Urban Development (HUD or federal government). Appellant's loan application under this program was approved.

Following a number of administrative and logistical miscarriages not relevant to the present controversy, a loan of $58,000 was authorized and the amount was transmitted to the city to be held in escrow in order to pay construction costs. A contractor, one Masino, began the rehabilitation work in June, 1979, but was fired by appellant in September of the same year due to her belief that an incompetent job was being performed. During this period, however, progress payments provided for under the agreement were made to Masino. After the dismissal, appellant incurred additional costs in correcting the improperly performed work and in completing, with a second contractor, the rehabilitation project. These costs were borne by appellant through private financing.

Appellant then filed her complaint, alleging (1) that the city breached its duty to her and thus acted negligently and in violation of contract by providing faulty construction specifications, in approving Masino as contractor, and in failing to properly inspect the latter's work in accordance with the HUD Handbook providing

[ 100 Pa. Commw. Page 176]

    for the administration of Section 312 loan projects; and (2) that the city breached its fiduciary duty to her and thus acted negligently and in violation of contract by releasing funds from escrow to Masino when the rehabilitation work had not been conducted in a workmanlike manner. Appellant also contends that the city acted negligently and in breach of contract by refusing to release funds to her after she dismissed Masino; those funds were required, according to appellant, in order for her to correct "emergency conditions" caused by the ill-performed work.

To this complaint the city filed preliminary objections, in response to the trespass counts asserting the defense of governmental immunity, and in response to the assumpsit counts denying that it had entered into any contractual relations with the appellant. These preliminary objections were sustained by the trial court, which concluded that the city was indeed immune and, further, that there was no contract between appellant and the city. The appellant then initiated the present appeal.

In reviewing an order sustaining a demurrer, this Court accepts the well-pleaded facts in the pleading under attack as true, and recognizes that a complaint should be dismissed for failing to state a cause of action only in clear cases, free of doubt and reservation. Knudsen v. Delaware County Regional Water Quality Control Authority, 84 Pa. Commonwealth Ct. 36, 40, 478 A.2d 533, 535-36 (1984). Appellant maintains both that the facts averred fall within the ambit of the tort immunity exceptions codified at 42 Pa. C.S. §§ 8541-8564, and that a contract was in fact in existence between her and the city. We disagree and hence affirm.

1. Cause of Action Under Pa. C.S. §§ 8541-8564

Appellant's argument that the city is not immune from her negligence claim is ...


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