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ADAMS PARKING GARAGE INC. v. CITY OF SCRANTON

April 26, 2001

ADAMS PARKING GARAGE, INC., SCRANTON LIFE REALTY COMPANY AND ANTHONY J. RINALDI, PLAINTIFFS,
V.
CITY OF SCRANTON, HONORABLE JAMES CONNORS, INDIVIDUALLY AND AS MAYOR OF THE CITY OF SCRANTON AND MEMBERS OF THE CITY COUNCIL, HONORABLE EDWARD (JUDGE CAPUTO) WALSH, HONORABLE BRIAN REAP, HONORABLE CHRISTOPHER DOHERTY, HONORABLE JOHN POCIUS, HONORABLE ALEX HAZZOURI, PARNELL JOYCE, BOYD HUGHES, SCRANTON REDEVELOPMENT AUTHORITY, DEFENDANTS.



The opinion of the court was delivered by: A. Richard Caputo, United States District Judge.

MEMORANDUM

Plaintiffs brought the present § 1983 action on July 9, 1999, alleging that Defendants deprived them of their constitutionally protected rights by conspiring to terminate Plaintiffs' lease of a parking garage owned by the City of Scranton ("the city"). The second amended complaint contains substantive and procedural due process claims, an equal protection claim, and a claim for breach of contract under Pennsylvania law. (Doc. 45.) On December 7, 1999, this court denied the motion to dismiss of Defendant Boyd Hughes, holding that Plaintiffs had properly alleged that Hughes had participated in the wrongdoing and that he had acted under color of state law. (Memorandum and Order, Doc. 33.) Hughes subsequently moved for summary judgment on all four of Plaintiffs' claims, a motion which the other defendants then incorporated into their own motion for summary judgment. (Docs. 51, 57.)*fn1 Because the court concludes that Defendants' termination of the lease was not a breach of contract and thus not a violation of due process, and because Plaintiffs have failed to produce sufficient evidence of arbitrarily disparate treatment by the governmental defendants, Defendants' motion for summary judgment will be granted.

I. Factual and Procedural History

Plaintiff Anthony Rinaldi is the sole shareholder of Scranton Life Realty Company ("Scranton Life"), which has offices in Scranton, Pennsylvania. (Defendants' Statement of Material Facts, Doc. 64 ¶ 2.) On September 11, 1989, Scranton Life sold certain properties to the city in lieu of condemnation, namely, a multi-story commercial and parking garage building located on Adams Avenue and a three story commercial building located on Lackawanna Avenue. (See Agreement of Sale, Document 69, Exhibit J ¶ 1.) Paragraph four of the sale agreement states that "[t]he purchase price is $1,350,000 (the `Purchase Price')." (Id. ¶ 4.) The following paragraph of the agreement requires the city, upon purchasing the property, to lease the parking garage building to Adams Parking, Inc., an entity wholly owned by Rinaldi, "for a term of five (5) years with five (5) five (5) year options, at first year rent [sic] $3,850.00 per month, on the condition that [the building] continue to be operated as a public parking garage." (Id. ¶ 5.) Rent increases were tied to increases in the consumer price index. (Id.)
The parties executed the parking garage lease agreement on the same day they signed the sale agreement. (See Lease, Doc. 69, Exhibit C.) Contained in the lease agreement is a provision allowing either party to terminate the lease should the parking garage be condemned by "any governmental authority." (Id. ¶ 13.) For nine years, Adams Parking operated the garage pursuant to the terms of the parties' sale and leaseback arrangement. During that period, however, city officials were engaged in consultations with developers and officials at the Scranton Redevelopment Authority ("SRA") regarding the development of a blighted area of the city that included the parking garage. (See Tr. of Proceedings Before the Court of Common Pleas of Lackawanna County, Doc. 69, Exhibit P.) On October 2, 1998, the SRA, determining that the area was in fact blighted, condemned the parking garage property and took ownership from the city. (See Declaration of Taking, Doc. 53, Exhibit A.) Shortly thereafter, on December 9, 1998, the city exercised its right to terminate its lease with Adams Parking due to the fact that a governmental authority had condemned the premises and taken title. (See Letter Notice of Termination, Doc. 69, Exhibit O.)
Adams Parking challenged the condemnation in state court. The Court of Common Pleas of Lackawanna County upheld the condemnation, rejecting Plaintiffs' contention that the SRA's determination of blight was made arbitrarily and capriciously and in bad faith. (Opinion and Order of June 22, 1999, Doc. 53, Exhibit D at 19.) On appeal, the Commonwealth Court affirmed the trial court, stating:
A review of the record as a whole including the extensive testimony decribing the blight determination and the Garage's condition, supports the finding that the Authority acted in conformance with the law and not in bad faith or in an arbitrary and capricious manner. The Court notes also that the lease between the City and Appellant contained a termination clause, which became operative once the Authority acquired title to the condemned property.

(December 15, 1999 Memorandum Opinion, Doc. 53, Exhibit E at 6.)

The instant suit was filed by Plaintiffs in July of 1999, after the decision of the Court of Common Pleas but prior to the Commonwealth Court's affirmance. Plaintiffs allege that Defendants conspired to deprive them of their property interests in the parking garage for various personal, political and economic reasons. (See Doc. 45 ¶¶ 26-45.) For example, Plaintiffs' claim that the personal animosity of SRA attorney Boyd Hughes was revealed when he allegedly said "F___ Tony Rinaldi" to Defendant Parnell Joyce, Director of the Scranton Office of Economic and Community Development. (See Rinaldi Aff., Doc. 69 ¶ 23.)
For their part, Defendants acknowledged in oral argument that they acted in concert with respect to the parking garage. (Tr. of Oral Argument, Doc. 80 at 33.) However, they deny that such action constitutes a "conspiracy" motivated by improper personal or political ends. (See, e.g., Answer of All Defendants Except Boyd Hughes, Doc. 47 ¶ 29; Answer of Hughes, Doc. 46 ¶ 29.) Rather, Defendants aver that the parking garage matter was simply part of a redevelopment project which, like many such projects, is a joint venture by state, local and private entities. (See generally Doc. 80 at 16-20.)

II. Analysis

Summary judgment is appropriate if "the pleadings, depositions, answers to interrogatories, and admissions on file together with the affidavits, if any, show there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law." Fed.R.Civ.P. 56. Where there is no material fact in dispute, the moving party need only establish that it is entitled to judgment as a matter of law. Where, however, there is a disputed issue of material fact, summary judgment will lie only if the factual dispute is not a genuine one, that is, if the evidence adduced by the parties is such that no reasonable jury could return a verdict for the nonmoving party under the governing evidentiary standard. See Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248-53, 106 S.Ct. 2505, 2510-12, 91 L.Ed.2d 202 (1986).
In addition to arguing that Plaintiffs' claims fail on the merits, Defendants have raised preliminary issues of standing, ripeness and collateral estoppel in their motion for summary judgment. With regard to the preclusion issue, the court notes that, since the courts of the Commonwealth only determined that the SRA's condemnation was proper under state law and not arbitrary and capricious, Plaintiffs' claims based on the city's termination of the lease are not precluded. (See December 15, 1999 Memorandum Opinion of the Commonwealth Court, Doc. 53, Exhibit E.)
With regard to the standing issue, the court concludes that Anthony Rinaldi does not have standing to bring any of the claims in this case. He is not a party to the city's sale agreement with Scranton Life, nor to its lease agreement with Adams Parking. His interest is that of a shareholder in both corporations, and as such he has no standing to advance the claims of either one. See Franchise Tax Bd. of Cal. V. Alcan Aluminium Ltd., 493 U.S. 331, 336, 110 S.Ct. 661, 665, 107 L.Ed.2d 696 (1990) (the shareholder standing rule prohibits shareholders from initiating actions ...

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