Count one recapitulates the claim that the drawing down of the letter of credit breached the license agreement. Count two sets forth the allegedly false January news stories and asserts that these caused Five Star to be unsuccessful on bids to operate parking facilities at a new Philadelphia hotel and a new Philadelphia office building. Count three realleges the facts set forth in count two and asserts that the press accounts were defamatory. Count four reasserts the alleged defamations, and also alleges the wrongful February seizure of the parking facility; these acts, allegedly leading to Five Star's failure to win the coveted bids, are said to have constituted "willful, wanton, vindictive, unprivileged and outrageous interference with Five Star's ongoing and prospective business relationships."
The Authority once again moves to dismiss the contract count as failing to state a viable claim and the tort counts as barred by Pennsylvania's Political Subdivision Tort Claims Act.
Count one -- the claim that the Authority breached the license agreement by drawing down the letter of credit -- seems to present the following questions: (1) Did the license agreement contemplate that the Authority could, simply by advising the Bank of America on December 18, 1985, "that Five-Star Parking did not perform according to contractual agreement dated September 1, 1982," draw down the letter of credit, without any regard for whether Five Star had in fact breached the agreement? (2) If the answer to the first question is "no," did the Authority, on December 18, 1985, have some reasonable ground for supposing that Five Star had breached the license agreement?
These questions arise from a matrix of facts and cannot be determined on summary judgment if material issues of fact remain. Such issues were plainly identifiable in March, when I denied summary judgment on count one.
They remain today, and I shall therefore follow my previous ruling.
The Philadelphia Parking Authority is a "local agency" within the meaning of the Political Subdivision Tort Claims Act, 42 Pa. C.S.A. § 8541 (and see id. at § 8501), and hence enjoys the "governmental immunity" conferred by the Act. E-Z Parks, Inc. v. Larson, 91 Pa. Commw. 600, 498 A.2d 1364 (1985) aff'd, 509 Pa. 496, 503 A.2d 931 (1986). By way of exceptions to the broad principle of "governmental immunity," the Act expressly provides for "local agency" liability for several listed kinds of "injury to a person or property." 42 Pa. C.S.A. § 8542. Not to be found among the listed exceptions
are causes of action sounding in defamation, or in interference with business relationships -- claims of the sort described by counts two, three, and four of Five Star's second amended complaint.
Five Star undertakes to meet this difficulty by contending that the Philadelphia Parking Authority's parking operations are conducted in a fashion not authorized by the Authority's governing statute and hence that the parking operations are not entitled to the immunity conferred by the Political Subdivision Tort Claims Act. The allegedly unauthorized aspect of the Authority's operations is that the Authority returns a profit to the City of Philadelphia instead of merely covering the various costs of its operations, as -- Five Star insists -- the Pennsylvania Legislature intended. The Authority acknowledges that it "is a source of revenue for the City" but says that "revenue is never equated to or bears a semblance to the economic meaning of the word profit." Docket Document 23, p. 7.
With the issues in this posture, it would appear that deciding whether the Authority turns a profit, and whether making money is a bad thing for the Authority to do, would be less fruitful -- and very likely more difficult -- than deciding whether, assuming the Authority is profitable and shouldn't be, its claim of immunity fails. To that question I now turn.
The first leg of Five Star's argument is the decision of the late Chief Justice Stern in Hill v. Allentown Housing Authority, 373 Pa. 92, 95 A.2d 519 (1953). In Hill, the question was whether the Court of Common Pleas had been correct in concluding that the Allentown Housing Authority was not immune from suit by a tenant whose small child was injured as a result of the Authority's negligence:
The Authority constructed and operated a housing unit known as Hannover Acres, and on premises owned by it immediately adjacent thereto it maintained a dump for the deposit of the ashes and rubbish of its tenants. The dump was quite large, constituting part of an abandoned quarry pit. It was not adequately enclosed by a fence or barrier. The rubbish deposited there consisted of paper, cartons, boxes, tin cans, bottles, glass, furniture, ashes, pieces of iron, newspapers, mattresses, sofas, bicycles, tires, broken wheels and toys; some of it was inflammable and occasionally fires raged on the dump. The children of the tenants were accustomed to play on and around it. One afternoon the minor plaintiff, then 7 years of age, was searching there for junk; his clothing caught on fire and he sustained severe burns about his body which resulted in serious permanent injury. In the present suit brought by his father against the Authority on his behalf, and in his own right, the court, sitting without a jury, found a verdict in favor of the father in the sum of $18,000 and as guardian of his minor son in the sum of $30,000.
Id. at 520.
Upon careful consideration of the legislation under which the Authority was established, Chief Justice Stern determined that the Authority's maintenance of a dump was not "the performance of a governmental function" -- a determination which in turn operated to defeat the Authority's claim of immunity (id. at 520-21):
The Housing Authorities Law of May 28, 1937 . . . created Authorities for the proclaimed purpose of providing safe and sanitary dwelling accommodations for persons of low income. The powers granted to them are enumerated at great length in section 10 . . . .