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Holdings v. County of York

June 11, 2008

LAUXMONT HOLDINGS, ET AL. PLAINTIFFS,
v.
COUNTY OF YORK, ET AL., DEFENDANTS



The opinion of the court was delivered by: Judge John E. Jones III

MEMORANDUM

This matter is before the Court on the motions of defendants the County of York, Lori O. Mitrick, and Douglas E. Kilgore (the "County Defendants") and Weinstein Realty Advisors and Elliot W. Weinstein (the "Weinstein Defendants") seeking dismissal of the amended complaint of plaintiffs Lauxmont Holdings, LLC ("Lauxmont") and its principal owner, Peter C. Alecxih. For the reasons set forth below, the motions will be granted and the Plaintiffs' claims will be dismissed for lack of subject matter jurisdiction.

I. STANDARDS OF REVIEW

A. Rule 12(b)(1)

The defendants' motions argue, in part, that this Court lacks jurisdiction over this action for various reasons, and therefore, that this action must be dismissed pursuant to Rule 12(b)(1). When considering a motion to dismiss under Rule 12(b)(1), a court must distinguish between facial and factual challenges to its subject matter jurisdiction. See Mortensen v. First Fed. Sav. & Loan Ass'n, 549 F.2d 884, 891 (3d Cir. 1977). A facial attack challenges whether the plaintiff has made sufficient allegations in the complaint to comply with the Rule 8(a)(1) requirement to show that the federal court has jurisdiction over the subject matter of the case. Id.; see also 5B Wright & Miller, Federal Practice and Procedure § 1350. "In reviewing a facial attack, the court must only consider the allegations of the complaint and documents referenced therein and attached thereto, in the light most favorable to the plaintiff." Gould Elecs., Inc. v. United States, 220 F.3d 169, 176 (3d Cir. 2000) (citing Mortensen, 549 F.2d at 891). A factual attack, in contrast, challenges jurisdiction based on facts apart from the pleadings and despite the formal sufficiency of the Rule 8(a)(1) allegations in the complaint. Mortensen, 549 F.2d at 891. On a factual attack, both parties may use extra-pleading material to challenge or establish jurisdiction, and "the court is free to weigh the evidence and satisfy itself whether it has power to hear the case. In such a situation, 'no presumptive truthfulness attaches to plaintiff's allegations, and the existence of disputed material facts will not preclude the trial court from evaluating for itself the merits of jurisdictional claims.'" Carpet Group Int'l v. Oriental Rug Importers Ass'n, 227 F.3d 62, 69 (3d Cir. 2000) (quoting Mortensen, 549 F.2d at 891). In either case, the burden is on the party asserting jurisdiction to show that jurisdiction exists. Pa. Protection & Advocacy, Inc. v. Houston, 136 F. Supp. 2d 353, 359 (E.D. Pa. 2001). In this case, the defendants rely only on the complaint, documents referenced therein, and judicially noticeable material in challenging jurisdiction, and therefore, the Court will treat their motions as a facial challenge.

B. Rule 12(b)(6)

The defendants' motions also challenge the legal sufficiency of the plaintiffs' claims under Rule 12(b)(6). In considering a motion to dismiss pursuant to Rule 12(b)(6), courts "accept all factual allegations as true, construe the complaint in the light most favorable to the plaintiff, and determine whether, under any reasonable reading of the complaint, the plaintiff may be entitled to relief." Phillips v. County of Allegheny, 515 F.3d 224, 231 (3d Cir. 2008) (quoting Pinker v. Roche Holdings Ltd., 292 F.3d 361, 374 n.7 (3d Cir. 2002)).

A Rule 12(b)(6) motion tests the sufficiency of the complaint against the pleading requirements of Rule 8(a). Rule 8(a)(2) requires that a complaint contain a short and plain statement of the claim showing that the pleader is entitled to relief, "in order to give the defendant fair notice of what the claim is and the grounds upon which it rests." Bell Atl. Corp. v. Twombly, --- U.S. ----, 127 S.Ct. 1955, 1964 (2007) (quoting Conley v. Gibson, 355 U.S. 41, 47 (1957)). "While a complaint attacked by a Rule 12(b)(6) motion to dismiss does not need detailed factual allegations, a plaintiff's obligation to provide the grounds of his entitlement to relief requires more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do." Id. at 1965. A plaintiff must make "a 'showing' rather than a blanket assertion of an entitlement to relief", and "without some factual allegation in the complaint, a claimant cannot satisfy the requirement that he or she provide not only 'fair notice,' but also the 'grounds' on which the claim rests." Phillips, 515 F.3d at 232 (citing Twombly, 127 S.Ct. at 1965 n. 3). "[A] complaint must allege facts suggestive of [the proscribed] conduct, and the "[f]actual allegations must be enough to raise a right to relief above the speculative level." Twombly, 127 S.Ct. at 1965, 1969 n.8. Therefore, "stating a claim requires a complaint with enough factual matter (taken as true) to suggest the required element." Phillips, 515 F.3d at 234 (quoting Twombly, 127 S.Ct. at 1965 n. 3).

On the other hand, "a complaint may not be dismissed merely because it appears unlikely that the plaintiff can prove those facts or will ultimately prevail on the merits." Id. at 231 (citing Twombly, 127 S.Ct. 1964-65, 1969 n.8). Rule 8 "does not impose a probability requirement at the pleading stage, but instead simply calls for enough facts to raise a reasonable expectation that discovery will reveal evidence of the necessary element." Id. at 234.

II. BACKGROUND

This actions arises out of York County's use of its eminent domain power. The story begins, for our purposes, on April 4, 2002, when Lauxmont purchased a 78-acre parcel of land known as Highpoint. (Amend. Compl. ¶ 22.) Located in Lower Windsor Township, York County, Pennsylvania, Highpoint was formerly part of the 825-acre Kohr Farm. (Id. at ¶¶ 23-24.) Lauxmont paid $1.755 million for Highpoint. (Id. at ¶ 25.) The plaintiffs, builders of luxury homes, intended to construct and sell 51 such homes on Highpoint, and this project became an almost singular focus of their business. (Id. at ¶¶ 27-30.) To this end, the plaintiffs obtained subdivision and land development approvals and made various improvements to the site, and public water and sewer were made available to the property. (Id. at ¶¶ 35-38.) By December 2003, the plaintiffs had sold two vacant lots in Highpoint for $600,000 and $350,000. (Id. at ¶ 40.)

The plaintiffs allege that defendants Mitrick and Kilgore, at the time, York County commissioners, opposed development of Highpoint and the Kohr Farm. (Id. at ¶ 42.) They further allege that a committee known as the Susquehanna River Preservation Project was formed to preserve the properties. (Id. at ¶ 43.) This committee included members from the York County Planning Commission, the Farm and Natural Lands Trust of York County, and the Lancaster-York Heritage Commission, of which Mitrick was an ex officio board member. (Id. at ¶ 46.) The plaintiffs aver that on February 20, 2004, the committee presented the idea of stopping development of the properties to Mitrick and Kilgore, who agreed to facilitate the preservation plan. (Id. at ¶¶ 51-52.)

Presumably as part of this effort, the Weinstein Defendants were retained by the Farm and Natural Lands Trust on March 22, 2004 to appraise the Highpoint property. (Id. at ¶ 72, Ex. A.) On April 5, 2004, the Weinstein Defendants produced a written appraisal of Highpoint which valued the property at $2 million. (Id. at ¶¶ 87, 89, Ex. A.) The plaintiffs allege that the Weinstein appraisal was prepared negligently and in bad faith, and vastly underestimated the value of the property.

The plaintiffs allege that significant efforts were made to force them to sell Highpoint to the County, and that they eventually agreed to sell part of the property, but that Mitrck and Kilgore rejected this offer. (Id. at ¶¶ 53-57.) Unable to purchase all of Highpoint, Mitrck and Kilgore, who constituted a majority of the County's Board of Commissioners, thereafter decided to use the County's power of eminent domain to take the property. (Id. at ¶¶ 59-60.) On May 5, 2004, the County initiated a condemnation action by filing a declaration of taking in accordance with Pennsylvania's Eminent Domain Code, 26 Pa. C.S. § 1-101, et seq.*fn1 (Id. at ¶ 61.) After the declaration of taking was filed, the plaintiffs offered to sell Highpoint to the County for at least $15 million, but this offer was rejected. (Id. at ¶¶ 62-63.)

On June 4, 2004, Lauxmont filed preliminary objections to the County's declaration of taking. See 26 Pa. C.S. § 1-406. (Id. at ¶ 108; County Defs.' Mot. to Dismiss, Ex. A, Doc. 30-2.) Lauxmont challenged the taking on a number grounds, arguing that: (i) Highpoint was not a necessary part of the proposed park the County intended to create on the site; (ii) the taking was for the improper purpose of preventing development; (iii) the County acted in bad faith and in an arbitrary and capricious manner; (iv) the County was taking more property than it needed and should have accepted Lauxmont's offer to sell part of Highpoint; (v) the County provided insufficient security; and (vi) the ...


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