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MATTER CONDEMNATION FACT v. CITY ALLENTOWN ET AL. (04/21/89)

decided: April 21, 1989.

IN THE MATTER OF CONDEMNATION IN FACT, BY THE CITY OF ALLENTOWN ARISING FROM THE ACTS AND ACTIONS BY THE SAID CITY, ITS AGENTS, EMPLOYEES AND OFFICIALS WITH REGARD TO THE NEUWEILER BREWERY IN EMINENT DOMAIN. GEORGE M. HANNA, FOR HIMSELF AND AS EQUITABLE OWNER THROUGH THE PENNSYLVANIA DEVELOPMENT CREDIT CORPORATION AND PENNSYLVANIA DEVELOPMENT CREDIT CORPORATION IN ITS OWN RIGHT, APPELLANTS
v.
THE CITY OF ALLENTOWN ET AL., APPELLEES



Appeal from the Order of the Court of Common Pleas of Lehigh County, in the case of In the matter of Condemnation in fact, by the City of Allentown, arising from the acts and actions by the said City, its agents, employees and officials with regard to the Neuweiler Brewery in Eminent Domain. George M. Hanna for himself and as equitable owner through The Pennsylvania Development Credit Corporation and Pennsylvania Development Credit Corporation in its own right v. The City of Allentown, Raymond Polaski, The Department of Code Enforcement, Donald Bernhard, and The Department of Community Development, No. 85-C-19.

COUNSEL

John P. Karoly, Jr., Karoly Law Offices, P.C., for appellants.

Alan M. Black, with him, Kevin K. Kercher, Black, Epstein, Prokup and McCarthy, for appellees.

Judges Doyle and Smith, and Senior Judge Barbieri, sitting as a panel of three. Opinion by Judge Smith.

Author: Smith

[ 125 Pa. Commw. Page 292]

Appellants appeal from the February 4, 1987 order of the Court of Common Pleas of Lehigh County which sustained Appellees' preliminary objections in the nature of a demurrer and dismissed Appellants' complaint. This litigation commenced when Appellants, George M. Hanna and the Pennsylvania Development Credit Corporation, equitable and legal owners respectively of the Neuweiler Brewery, filed in the trial court a praecipe for writ of summons against Appellees on January 4, 1985. A two-count complaint was later filed on January 30, 1985 under Section 502 of the Eminent Domain Code (Code), Act of June 22, 1964, Special Sess., P.L. 84, as amended, 26 P.S. ยง 1-502.

Appellants assert that they have been deprived of their real and material rights in the named property without due process of law, and in count one they request that this Court appoint viewers to determine the value of said property and assess just compensation. In count two of their complaint, Appellants allege that the statements of city officials at a budget hearing constituted an independently tortious form of interference with property rights. Appellants claim $800,000 in compensatory and $1,000,000 in punitive damages.

Appellants aver in their complaint that on October 12, 1984, Appellee Raymond Polaski (Polaski) in the course of his duties as Director of the City of Allentown's Department of Code Enforcement proposed at a budget

[ 125 Pa. Commw. Page 293]

    hearing that funding be allocated for the demolition of the Neuweiler Brewery. Appellee Donald Bernhard (Bernhard), Director of Allentown's Department of Community Development, allegedly agreed with these remarks on grounds that the Neuweiler Brewery could not be successfully rehabilitated. On the following day, this specific proposal was reported in a local newspaper. Appellants submit that as a direct result of the named city officials' course of action and the subsequent publicity attending their remarks, Appellants have been unable to proceed with plans for rehabilitation and/or sale of the Neuweiler Brewery.

Subsequent to briefing and argument, the trial court sustained Appellees' preliminary objections in the nature of a demurrer and dismissed Appellants' complaint resulting in appeal to this Court.*fn1

Appellants raise four issues for review by this Court: whether the trial court erred in sustaining Appellees' preliminary objections without first conducting an evidentiary hearing; whether the trial court erred in failing to find a de facto taking of Appellants' property; whether the trial court erred in finding that it is not procedurally permissible for a property owner to append a tort claim to an action seeking the appointment of a board of view under the Code; and whether the trial court erred in finding that the Appellees never tortiously interfered with Appellants' property rights.

[ 125 Pa. Commw. Page 294]

It is well established in this Commonwealth that a de facto taking occurs whenever an entity clothed with the power of eminent domain substantially deprives an owner of the use and enjoyment of his property. See McGaffic v. Redevelopment Authority of New Castle, 120 Pa. Commonwealth Ct. 199, 548 A.2d 653 (1988) (citing Conroy-Prugh Glass Co. v. Commonwealth, 456 Pa. 384, 321 A.2d 598 (1974)); Department of Transportation v. Steppler, 114 Pa. Commonwealth Ct. 300, 542 A.2d 175 (1988). "Where a de facto taking is alleged, the property owner bears a heavy burden of proof and must show that exceptional circumstances exist which substantially deprive him of the use of his property and further, that this deprivation is the direct and necessary consequence of the actions of the entity having the ...


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