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August 21, 1997


Appealed From No. 3014 November Term, 1994. Common Pleas Court of the County of Philadelphia. Judge NIGRO.

Before: Honorable Joseph T. Doyle, Judge, Honorable Doris A. Smith, Judge, Honorable Emil E. Narick, Senior Judge. Opinion BY Judge Doyle.

The opinion of the court was delivered by: Doyle


FILED: August 21, 1997

William Boady, The Trane Company, and Tozour Energy Systems, Inc., appeal an order of the Court of Common Pleas of Philadelphia County (Common Pleas), dismissing their complaint against the Philadelphia Municipal Authority (PMA) for lack of standing.

On or about March 9, 1993, PMA sought bids for a heating, ventilation and air conditioning system (HVAC contract) for the Northeast Philadelphia Prison. Among other things, the successful bidder would be required to purchase and install sixty-six rooftop air handling units, three centrifugal water chillers, and twenty-four rooftop air conditioners. Tozour, on behalf of Trane, submitted a proposal to the contractors bidding on the HVAC contract to provide the successful bidder with the required air handling units, air conditioners, and water chillers. York International Corporation (York) also submitted a proposal to the bidders to provide the same equipment. The HVAC contract was ultimately awarded to the Thomas H. Barham Company, Inc., who selected York as its equipment supplier.

On November 30, 1994, Boady, a "City of Philadelphia taxpayer," Trane, and Tozour (hereinafter collectively referred to as the Taxpayers), filed a complaint in equity against PMA. The complaint alleged that the equipment supplied by York did not meet the specifications required by the HVAC contract. Specifically, they averred that York is substituting less expensive, less efficient, and lower quality air handlers and water chillers than those demanded by the HVAC contract. Taxpayers allege that York's failure to provide equipment within the specifications of the HVAC contract will cost PMA and City of Philadelphia taxpayers more money than would otherwise be necessary to operate and maintain the system. Accordingly, Taxpayers' complaint demanded the following relief: (1) an order declaring that PMA must follow the HVAC contract specifications and that York's substitute equipment violates the contract; (2) an injunction directing York's equipment to be removed from the construction site; and (3) an injunction directing PMA to purchase air handlers and water chillers that conform to the specifications in the HVAC contract.

In response to the Taxpayers' complaint, PMA filed a preliminary objection in the nature of a demurrer, asserting that the Taxpayers lacked standing to sue. Pa. R.A.P. No. 1028(4). Common Pleas sustained PMA's preliminary objection and dismissed Taxpayers' complaint. The court reasoned that:

Under the facts alleged in the complaint in the instant matter, plaintiffs fail to assert a sufficient interest that would rise to a level adequate to confer standing. In their complaint, plaintiffs' challenge to the City's action appears to aim at the prevention of an alleged waste of taxpayer revenue. Because the units allegedly do not comply with the required specifications, plaintiffs assert that PMA and the City will have to spend more tax revenues in the long run, and 'harm' City taxpayers. That interest, while admirable, is nothing more than an interest which all taxpaying citizens have. . . . The prevention of waste of tax revenue is simply not enough to grant standing. . . .

(Common Pleas' opinion at 3-4.) This appeal followed.

On appeal, Taxpayers contend that Common Pleas erred in holding that they do not have standing to sue, because a taxpayer has standing to challenge governmental actions when the particular action would go unchallenged absent a taxpayer suit.

On appeal from an order granting a preliminary objection in the nature of a demurrer, our standard of review is to determine whether the common pleas court abused its discretion or committed an error of law. Factor v. Goode, 149 Pa. Commw. 81, 612 A.2d 591 (Pa. Commw. 1992), petition for allowance of appeal denied, 533 Pa. 654, 624 A.2d 112 (1993). Further, when the common pleas court sustains a demurrer, we are constrained to examine only well-pleaded facts in the complaint, because a demurrer admits those facts and any inferences reasonably deducible therefrom as true. Easton Area Sewer Authority v. Bushkill-Lower Lehigh Joint Sewer Authority, 71 Pa. Commw. 553, 455 A.2d 286 (Pa. Commw. 1983).

As we explained in Drummond v. University of Pennsylvania, 651 A.2d 572, 577 (Pa. Commw. 1994):

standing is the requirement that the person bringing an action be adversely affected by the matter they seek to challenge to assure that they are the appropriate party ...

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