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Ransom v. Marrazzo

argued: May 3, 1988.


On Appeal From the United States District Court for the Eastern District of Pennsylvania, D.C. Civil No. 86-6363.

Gibbons, Chief Judge, Mansmann and Cowen, Circuit Judges.

Author: Gibbons


GIBBONS, Chief Judge:

Appellants Jeryline Ransom, James Willis, Cynthia Muse, Alicia Powell and Rose Tull appeal from the dismissal of their amended complaint, seeking injunctive and declaratory relief against the City of Philadelphia on behalf of the class of Philadelphia residents to whom water and sewer service was denied unless they paid the delinquent service charges incurred, but not paid, by the prior customers of water services at their residences. The district court refused the plaintiffs' prayer for a declaration that the policy and practice of requiring water and sewer service applicants to satisfy pre-existing debts incurred for services rendered to their residences violate the Due Process and Equal Protection clauses of the Fourteenth Amendment to the United States Constitution and the Civil Rights Act, 42 U.S.C. § 1983. Instead, the district court granted the defendants' motion to dismiss on the ground that Philadelphia's policy of "denying water and sewer service to subsequent property owners whose properties were subject to liens for delinquent charges until arrangement for payment of delinquent bills is made is not violative of constitutional constraints." Order of the District Court at 1. As grounds for dismissing the plaintiffs' state law claims the district court also held that: (1) the two remedies for nonpayment of water charges of liens and the denial of service are both authorized under state and local law, P. L. 207 § 4, as amended, Pa. Stat. Ann., tit. 53, § 7106 (Purdon 1972) (the "Commonwealth Municipal Claims and Liens Law"); Philadelphia Code §§ 19-1606 (2)(c); (2) liens are enforceable against the properties in question; and (3) such liens, and the alternative remedy of denial of service until satisfaction of charges, "followed the property" through transfers subsequent to the charges being incurred. Id. at 1-2.

On appeal, the plaintiffs continue to press their federal claims that the policy of conditioning service to them on the payment of charges incurred by prior customers violates their constitutional rights to equal protection and due process and, further, that the city's failure to promulgate standards adequate to provide notice to applicants of this condition on service also violates the Due Process Clause of the Fourteenth Amendment. They also dispute the district court's characterization of the class of plaintiffs as all owners of the affected property, thereby challenging the court's rationale that lien and denial of service remedies reached the class under state and local law simply by virtue of "following the property."

We conclude that the putative class includes non-owner occupants as well as owners, and therefore, ownership of the affected property cannot be the sole basis of dismissal for failure to state a claim. We hold, however, that both state-authorized liens for non-payment of water and sewer bills, and the local law remedy of denying service until charges for services rendered are satisfied, may be constitutionally applicable to the properties where unpaid services were rendered, regardless of whether the applicant is personally liable for the charges, and regardless of whether the applicant is an owner of the property or a mere occupant. We further hold that the challenge to the inadequacy or absence of standards providing notice of this condition on receiving service is rendered moot by the City of Philadelphia's Revenue and Water Departments' promulgation of the Residential Customer Service Regulations, which adequately inform applicants of the effect of non-payment by prior customers on subsequent applicants for service. Thus, we will affirm the dismissal of the amended complaint.


Standard of Review

The test to be applied in deciding a motion to dismiss for failure to state a claim requires this court to accept as true the factual allegations in the complaint and all reasonable inferences that can be drawn from them, and to refrain from granting a dismissal unless it is certain that no relief could be granted under any set of facts which could be proved. D.P. Enterprises v. Bucks County Community College, 725 F.2d 943, 944 (3d Cir. 1984). Accordingly, we base our decision to dismiss on the ground that the facts alleged in the complaint, even if true, fail to support the § 1983 claim against the City of Philadelphia.


The Facts

The plaintiffs are all non-tenant*fn1 occupants of Philadelphia residences who were denied, or were threatened with being denied, water and sewer services because of outstanding service charges to their residences incurred prior to their occupancy or application for service at those same residences. Liens for unpaid water and sewer bills are recorded at the Prothonotary's Office of the Philadelphia Court of Common Pleas in "lien books" and on microfilm for all of the residential properties in question in this case. Affidavit of James Kelly, Accountant in the City of Philadelphia's Water Revenue Bureau (responsible for the filing of liens against properties for delinquent water/sewer bills); Affidavit of Pat Evangelista, Legal Supervisor in Judgment and Liens, Prothonotary's Office, Philadelphia Court of Common Pleas. However, these liens are not located in the "Judgment Index" of the Philadelphia Court of Common Pleas. Affidavit of Valeria Bullock, Paralegal for Community Legal Services' Energy Project.

It is undisputed that James Willis, Cynthia Muse and Rose Tull are owners of the properties for which they seek water and sewer service. James Willis inherited his family's home at 3236 North Sydenham Street when his mother died in April, 1982. James Willis lived with his mother in the family home until her death, at which time the water and sewer bills had been paid in full. After his mother's death, in or about June 1983, James Willis went to live with his father and other relatives in Roanoke, Virginia, leaving the inherited property vacant until he returned, approximately three years later, in June 1983. Upon his return, he found that the water service had been terminated and several water bills had accrued during the three year period of his absence. When Mr. Willis inquired, the Water Revenue Bureau of Philadelphia informed him that service would not be restored until the Bureau received approximately 50% of a delinquent balance of $870.12. Because Mr. Willis' income is limited to a public assistance grant of $186.00 per month, he applied for and received a $300 grant from the federally-sponsored Low-Income Heating Energy Assistance Plan which was accepted by the Water Revenue Bureau. However, the Bureau continued to refuse service to Mr. Willis because of the remaining balance of $570.72, and on the further ground that Mr. Willis had not demonstrated an allegedly necessary "ownership interest" in the property.

Like Mr. Willis, Cynthia Muse also inherited an ownership interest in her family's home at 5439 Pine Street when her parents died in October, 1983. Ms. Muse remained with her brother at 5439 Pine Street after her parents died until July, 1985, when she was forced out by her brother's physical abuse. Ms. Muse's brother lived on alone in the house until he was sent to prison in November, 1986, at which time she returned to the property. Ms. Muse then discovered from the Water Revenue Bureau that the water service had been terminated in October, 1986 because of her brother's failure to make payments, and that service would not be restored until the delinquency in the amount of approximately $1,000.00 was paid in full. Ms. Muse and her two children, including a baby, had to live without water at their house from November, 1986 to July, 1987.

Rose Tull acquired the property at 2525 W. Firth Street pursuant to a real estate installment sales agreement, under which the seller agreed to pay the water and sewer bills up to the time of settlement. Prior to settlement, the seller failed to pay the bills and, consequently, the city terminated water service to 2525 W. Firth Street. Upon receiving Ms. Tull's explanation of the installment sales agreement, the Water Revenue Bureau restored water service to the property and agreed to seek payment from the seller pursuant to its policy then represented to Ms. Tull of not terminating service to non-owner occupants. But when title passed to Ms. Tull, she received a bill for $6,147.65 for unpaid services received during the time covered by the seller's agreement to pay. The Bureau has threatened to terminate service if payment is not made, but agreed to postpone termination pending the outcome of this litigation.

Alicia Powell, her infant daughter and older son lived with her husband, William Powell, the owner of record and customer of record for water and sewer service, at 155 E. Mayland Street until June 15, 1986. At that time, domestic abuse led Ms. Powell to move out of her home. She subsequently obtained a protection from abuse order from the Philadelphia Court of Common Pleas prohibiting William Powell from visiting, living at, entering or attempting to enter the property at 155 E. Mayland Street until November 11, 1987. In November, 1986, after residing with her mother for a few months, Ms. Powell returned to the 155 E. Mayland Street property, where she found the water service terminated. Service has been restored, but the Bureau has threatened to terminate it unless she arranges for the payment of a delinquent bill in the amount of $1,532.39 incurred by her estranged husband. The defendant-appellees contend that Alicia Powell has an ownership interest in the home as marital property; Ms. Powell denies ownership. We need not, however, resolve this disputed point of state law since Ms. Powell is either an owner or an occupant, but not a tenant, and we conclude that both owners and occupants are subject to the termination of service remedy. See infra.

Jeryline Ransom is not the owner of the property at which she resides, 2530 Ingersoll Street, but is rather the guardian of the minor property owner, her cousin, Mark Cromartie. All of the assets of Mark's mother's estate, including 2530 Ingersoll Street, are being held in trust for Mark with a Mr. Melvin Brookman, Esquire named as Trustee. Mark was originally left in the custodial care of Jeryline Ransom's mother, Helen Ransom. When Helen Ransom died in February, 1984, leaving care and custody of Mark to Jeryline, the latter moved to 2530 Ingersoll Street with Mark and her own four-year old son "because she and the children had no other place to live." At the time Ms. Ransom and the children moved into the house it had no water service. When Ms. Ransom applied to the Water Revenue Bureau for service, a customer service representative informed her that service would not be restored until the Bureau received a $300 deposit and a promise of the payment of a further $500 within 30 days towards the satisfaction of an outstanding water and sewer bill of ...

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