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WILCO ELECTRONIC SYSTEMS v. GARY DAVIS AND GRANDE ASSOCIATES AND RAY CAWLEY (06/08/88)

filed: June 8, 1988.

WILCO ELECTRONIC SYSTEMS, INC., APPELLANT,
v.
GARY DAVIS AND GRANDE ASSOCIATES AND RAY CAWLEY, IND. AND T/A BUCKS COUNTY CABLEVISION WATERFORD ASSOCIATES AND MGM ENTERPRISES, INC. PENNSYLVANIA CABLE TELEVISION ASSOCIATION, APPELLEE. RAYMOND J. CAWLEY, T/A BUCKS COUNTY CABLEVISION, APPELLEE, V. RONALD GIANCRISTOFARO AND ANTHONY GIANCRISTOFARO, T/A GRANDE ASSOCIATES AND COLONIAL ESTATES AND WILCO ELECTRONIC SYSTEMS, INC., WATERFORD ASSOCIATES AND MGM ENTERPRISES, INC., PENNSYLVANIA CABLE TELEVISION ASSOCIATION, APPELLANTS



Appeal From Order Entered April 8, 1987, Court of Common Pleas, Civil Division, Bucks County No. 85-07605. Appeal From Order Entered April 8, 1987, Court of Common Pleas, Civil Division, Bucks County No. 85-08303.

COUNSEL

Alvin Freiberg, Philadelphia, for appellants.

Randolph A. Scott, Warrington, for appellees.

Cavanaugh, Olszewski and Melinson, JJ.

Author: Cavanaugh

[ 375 Pa. Super. Page 111]

The two principal issues involved in this case are (1) whether a contract between the owner of a rental apartment complex and the provider of television services which grants the television company the right to provide non-cable pay television services and restricts anyone else from providing "any pay TV system, cable or otherwise" to the tenants is unenforceable as violative of the First Amendment to the United States Constitution and (2) whether the contract is unenforceable as being in violation of the Landlord and Tenants Act, 68 Pa.S. ยง 250.554.*fn1

[ 375 Pa. Super. Page 112]

This case involves two appeals in cases which were consolidated in this court as well as in the court below. The background is quite complex and an understanding of the facts is necessary to place the issues in focus. The original Plaintiff, Wilco Electronic Systems, Inc., which is referred to in this opinion as "Wilco", and is an appellant herein, is a Pennsylvania corporation engaged in the business of selling, installing and operating cable and non-cable television. On December 17, 1979 Wilco entered into a contract with the then owner of a property now known as "Colonial Estates", which is an apartment complex containing some 194 units, to install a pay television system together with the wiring, connections, fixtures, accessories and the like.*fn2 The contract granted an exclusive right to Wilco to operate the television system within the premises for a period of ten years commencing on January 1, 1980 and ending December 31, 1989. The agreement also specifically prohibited any other party from using or installing a cable television system on the premises. The agreement gave Wilco an exclusive right to provide pay television to the tenants at Colonial Estates at charges to be determined between Wilco and the owner of the premises.

Apparently, the contract was performed by the parties in interest without incident until September, 1985. At that time it was ascertained that Bucks County Cable Television, an appellee herein, referred to in this opinion as BCC, had employees on the grounds of Colonial Estates who were digging trenches to install cable television and had cut

[ 375 Pa. Super. Page 113]

Wilco's cables on the grounds of Colonial Estates. BCC was also making cable installations in apartments within the complex which desired such cable television.

In late 1985 Wilco commenced an action in equity seeking a preliminary injunction against BCC and the then owner of Colonial Estates. Subsequently, Raymond J. Cawley, individually and trading as Bucks County Cablevision (BCC) commenced an action against Wilco and individuals trading and doing business as Colonial Estates. BCC sought an injunction against Wilco and Colonial Estates prohibiting them from restricting the plaintiff's access to Colonial Estates "for the purpose of providing cable television services to the residents of Colonial Estates."

The actions commenced by Wilco and BCC were consolidated for hearing which was held before Biester, J. The court entered an Adjudication and Decree Nisi including findings of fact and conclusions of law and found in favor of BCC. Wilco's motion for post-trial relief was denied and it has appealed to this court.*fn3

The first issue for our consideration is whether the court erred in finding that the contract between Wilco and Colonial Estates which gave Wilco the exclusive right to provide television services to the residents of Colonial Estates was unenforceable as violative of BCC's rights under the First Amendment to the Constitution of the United States. We find that the court below erred in its determination that enforcement of the restrictive covenants in the

[ 375 Pa. Super. Page 114]

    contract between Wilco and Colonial Estates would constitute state action in violation of The First Amendment of the United States Constitution.*fn4 The court below relied on Shelly v. Kraemer, 334 U.S. 1, 68 S.Ct. 836, 92 L.Ed. 1161 (1948) which reversed the state court's enforcement of a racially restrictive covenant. In our opinion, Shelly v. Kraemer, supra, is not applicable to this case, as no state action was involved in the matter before us. In Parks v. "Mr. Ford", 556 F.2d 132, 136 N.6a (3rd Cir.1977) the court noted a distinction between the situation where state action is deemed to exist for constitutional purposes and when it does not so exist. The court held that where a state court enforces the right of private persons to take actions which are permitted but not compelled by law, there is no state action for constitutional purposes in the absence of a finding that racial discrimination is involved as existed in the Shelly case supra. In Parks it was held that possession of an automobile under the common law rule which gives a repairman a possessory lien on vehicles he repaired did not constitute state action. It is evident that in the case before us there is no racial discrimination and enforcement of the contract between Wilco and Colonial Estates would not involve state action in the constitutional sense.

In Luria Brothers and Company v. Allen, 672 F.2d 347 (3rd Cir.1982), the Court of Appeals held that judicial enforcement of a contract cannot convert an otherwise private matter into ...


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