On Appeal from the United States District Court for the Eastern District of Pennsylvania. (D.C. Civil Action No. 89-cv-09040).
Before: Stapleton, Roth and Lewis, Circuit Judges.
This appeal arises from a § 1983 action brought by Blanche Road Associates (Blanche Road) and its general partner, Blanche Road Corporation, against Bensalem Township and several of its officials and employees. The appeal raises several issues, including whether the district court abused its discretion after the first trial by granting a new trial and whether the Judge erred by failing to recuse himself in the second trial. We conclude, however, that the dispositive issue is whether, during the second trial, the district court properly granted defendants' motion for judgment as a matter of law. Because we find that the court erred in granting this motion, we will reverse and remand this action for yet another trial.
Adam and Blanche Talacki purchased a 52-acre tract of undeveloped land in Bensalem Township in 1967. A subdivision and land development plan, dividing the land into 32 lots, was approved by the Township and recorded in 1972. In addition, the Talackis and the Township entered into a one-year subdivision agreement which required the Talackis to complete certain improvements, including roads, curbs, and a drainage system, by June 28, 1973. These improvements were substantially completed.
In 1982, Bensalem Township enacted a subdivision and land development ordinance to assist orderly, efficient and integrated development of land. This ordinance was amended on June 15, 1987, with the addition of impact fees, based on the number of dwelling units or on the square footage of commercial buildings to be constructed on a developed lot. Township regulation of development and construction was expanded again on July 27, 1987, by enactment of Ordinance 371, which adopted most of the Building Officials & Code Administrators, International, Inc. ("BOCA") National Building Code. Included in this July ordinance was a Code Appeals Board to hear appeals from code violations.
In 1986, the Talackis and Walter and Margaret Czekay decided to develop an industrial park on the 23 undeveloped lots in the subdivision. They formed Blanche Road Corporation, and, with Blanche Road Corporation as the general partner and the Talackis and Czekays as limited partners, they formed Blanche Road Associates, a Pennsylvania limited partnership. Blanche Road Associates began operations by purchasing one lot from the Talackis and entering into an option agreement with them to purchase any or all of the remaining lots over the next four years. The Talackis and Czekays planned to build on the lots sequentially, by investing the proceeds from the sale or lease of one developed lot in the development of the next lot, until the industrial park was completed. To this end, Blanche Road installed water and sewer lines for all of the lots and resurfaced the roads, at a cost of approximately $300,000. Blanche Road also established a sales office, hired a park manager, purchased construction equipment, and began marketing the lots.
The parties' dispute centers on Blanche Road's attempts to obtain various building permits for lots in the industrial park. Plaintiffs claim that the Township, through its supervisors and employees, engaged in a campaign of harassment designed to force Blanche Road to abandon its development of the industrial park. Defendants, on the other hand, maintain that they were applying the local zoning and permitting regulations in a lawful and reasonable manner.
In Bensalem Township, during the relevant time period, an aspiring developer of a parcel of land was required first to obtain the Township's approval of the subdivision plan and then to acquire three permits. The first permit was a land alteration permit, which gave the developer the right to clear the land of existing vegetation and to alter the course of surface water. In order to qualify for this permit, a developer had to comply with the Township's Land Alteration Ordinance and to show that the work would not cause soil erosion or excessive water flow onto adjoining property. All land alteration permits were approved by the Township Board of Supervisors. Next, in order to erect a building, a developer was required to obtain a building permit by verifying that the building plans were in accord with applicable building codes. Finally, after the building was erected but before it could be occupied, a developer had to procure a use and occupancy permit, showing that the building had been constructed in accord with the approved plans and was safe for occupancy. All building permits and use and occupancy permits were approved by the Township Licensing and Inspections Department (L & I).
In 1987, Blanche Road developed, constructed, and sold its first lot, lot 29, without incident. Blanche Road then obtained permits for, purchased, and began construction on lot 7. The two buildings constructed on the lot were leased to tenants. Blanche Road did not, however, obtain use and occupancy permits for the buildings before they were occupied. Next, Blanche Road filed applications for a land alteration permit and a building permit for lot 13. These applications were rejected in June 1987 by the Township zoning officer, building inspector, and fire marshall. At that time, Fire Marshall John Scott, who had rejected the building permit application, placed a note in Blanche Road's file, that read: "C.W. -- S.2 -- NO SPRINKLERS -- CAN YOU GET THEM ON SOMETHING ELSE?"*fn1 Eventually, Blanche Road's applications for permits for lot 13 were approved, and in August 1987 Blanche Road completed its purchase of lot 13 and began construction.
In October 1987, Blanche Road filed applications for land alteration and building permits for lots 14 and 26. In November the permits for lots 14 and 26 were withheld, pending payment of "impact fees" of approximately $9,600 for lot 14 and $16,000 for lot 26. The impact fees, imposed pursuant to the June 15, 1987, amendment to the Township's Subdivision and Land Development Ordinance, assessed commercial developers a fee of $.80 per square foot of proposed floor area.*fn2 Blanche Road protested the imposition of the impact fees, arguing that the ordinance was not applicable because the Township had approved the industrial park's subdivision and development plan prior to the ordinance's enactment. In response to Blanche Road's protest, Richard Moore, the Township's solicitor, "waived" the impact fees. Permits for lots 14 and 26 were then issued, and Blanche Road began construction on them.
In a December 1987 meeting, however, Township officials, including the director of L & I, Staerk, the Township engineer, Scheuren, and zoning officer, Steiner, told Walter Czekay that, despite Moore's determination to the contrary, Blanche Road would be required to pay impact fees on lots 14 and 26. They also informed Czekay that impact fees were owed on lot 13 and that Blanche Road would be required to establish an escrow account of $10,000 per lot to cover engineering fees. According to Czekay's trial testimony, Staerk told Czekay that, if Blanche Road failed to pay the impact fees, Staerk would take whatever action was necessary to stop construction at the industrial park.
Blanche Road refused to pay the impact fees or to establish an escrow account for the engineering fees. Later that month, on December 22, Code Enforcement Officer William Oettinger issued a stop work order on construction at the Blanche Road site. As of that date, Blanche Road was constructing on lots 13, 14, and 26. Oettinger issued the citations to Blanche Road, based upon violation of erosion and sedimentation control measures outlined in the land alteration permits. In part, these citations charged violations on lots which were still owned by the Talackis. A citation was also issued for land alteration without a permit. In issuing the stop work order, Oettinger threatened that, if work did not stop at once, he would send police to arrest all Blanche Road representatives and workmen on the site. He then wished plaintiffs' representatives a "Merry Christmas."
Plaintiffs contend that there was no basis for the stop work order because it was the Township's usual practice to give a developer ten days to correct a deficiency before issuing such an order. Moreover, plaintiffs argue that the Township's building code authorized the issuance of stop work orders only with respect to "work on any building or structure . . . being prosecuted . . . contrary to the . . . code or in an unsafe or dangerous manner," and that no such violations were noted on the stop work citations. Finally, plaintiffs point out that the Township's Building Inspector, Cindy Williams, had been at the site approximately three days prior to the issuance of the stop work order and had not issued any citations.
Blanche Road attempted to appeal the citations and the stop work order to the Township's Zoning Hearing Board. The Township instead directed the appeal to the Code Appeals Board, created in July 1987. Because the Code Appeals Board had not in fact been formed, the Township's Board of Supervisors quickly assembled a Board to hear Blanche Road's case. On January 11, 1988, a hearing was convened with three members of the newly constituted Code Appeals Board, but the Board declined to reach the merits of Blanche Road's appeal. At a second hearing, on February 2, 1988, Blanche Road was informed that the Board would not entertain the appeal because the Board did not have jurisdiction over the matter.*fn3
One month later, Scheuren returned to the Blanche Road site with an enforcement officer from the Bucks County Conservation District, the agency responsible for enforcement of Pennsylvania's Clean Streams Act. The Conservation District officer cited Blanche Road for failing to file or to comply with a sedimentation and erosion plan. The Township solicitor recommended that Blanche Road's permits be revoked until such time as compliance with state and local law was established. On February 8, 1988, Oettinger served Blanche Road with a notice of revocation of building and land alteration permits for lots 13, 14, and 26, as well as with a second stop work order.*fn4
On February 28, 1988, Blanche Road filed a state court equity action seeking to enjoin revocation of its permits. Pursuant to a stipulation agreed to by the parties and approved by the court, the permit revocations were rescinded. In June and July 1988, Blanche Road applied for use and occupancy permits for lots 13, 14, and 26; as earlier had been the case with the permit for lot 7, the application was altered to require an additional inspection and approval by engineer Scheuren.
When Blanche Road filed applications for land alteration permits for lots 12, 21, 11, 15, and 8, the Township treated them as subdivision and land development permit applications. This treatment is significant because subdivision and land development applications require a more extensive review and are more time-consuming and costly than applications for land alteration permits. Building permits for lots 12, 21, 15, and 8 were eventually issued as "conditional" permits, containing a notation that the Township was not surrendering its right to collect impact fees on the lots.*fn5
Finally, and perhaps most significantly, Blanche Road cites the testimony of Township Engineer Scheuren as evidence that the Township and its officials conspired to delay and ultimately to shut down Blanche Road's development of the industrial park. Scheuren testified that all three Supervisor defendants (Ryan, Costello, and Maher) told him to review Blanche Road's permit applications with extra scrutiny in order to "slow down" the development. According to Scheuren, Maher told him to prepare a "punch list" for lot 7 by looking for every possible violation and to proceed with whatever soil erosion violations he could find at the site in order to continue the stop work orders.
Plaintiffs allege that, due to the Township's insistence on the payment of inapplicable impact fees and to the Township's improper refusal to release and issue permits, the Talackis and the Czekays decided not to finish the project. Blanche Road was closed down.
On December 20, 1989, plaintiffs brought the instant action under 42 U.S.C. § 1983, alleging violations of their equal protection and due process rights in connection with the development of selected lots in the industrial park.*fn6 In addition to the Township, several officials and employees of the Township were named as defendants, including: the five Supervisors in office at the time the suit was filed (Costello, Francano, Maher, Ryan, and Zajac), the members of the Township Code Appeals Board (Nolan, Seeberger, and Walls), Township Manager Raddi, Zoning Officer Steiner, Director of the Department of Licenses and Inspections (L & I) Staerk, Code Enforcement Officer Oettinger, Township Engineers Scheuren and Thakuria, and Solicitor Toften and his associate Landis.
Blanche Road sought four types of damages from these defendants: (1) damages resulting from the Township's delay in issuing permits for lots 7, 8, 10, 12, 13, 14, 15, 25, and 26; (2) overhead costs and legal fees; (3) lost opportunity costs on lots 11 and 21, which Blanche Road unsuccessfully attempted to develop; and (4) lost profits which would have been earned from the ...