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Carbo v. Redstone Township

November 20, 2008

FERNE CARBO, APPELLANT
v.
REDSTONE TOWNSHIP, REDSTONE TOWNSHIP SEWER AUTHORITY, DONALD H. WRIGHT AND MARY K. WRIGHT



The opinion of the court was delivered by: Judge Simpson

Argued: October 16, 2008

BEFORE: HONORABLE DAN PELLEGRINI, Judge, HONORABLE ROBERT SIMPSON, Judge, HONORABLE JIM FLAHERTY, Senior Judge.

OPINION

This appeal asks whether a second class township's sale of real property to a municipal authority which then conveyed the property to a predetermined third party violated a requirement of The Second Class Township Code (Township Code)*fn1 that real property valued in excess of $1,500 be publicly advertised and sold by the township to the highest bidder. More particularly, Redstone Township (Township) sold 5.7 acres of land (Subject Property) to the Redstone Township Sewer Authority (Sewer Authority) for $3,000. Sewer Authority then sold the parcel to Donald H. and Mary K. Wright (the Wrights) for $1.00.

Ferne Carbo (Plaintiff) challenged the conveyances in the Court of Common Pleas of Fayette County (trial court) on the basis that Township's failure to publicly advertise and solicit bids for the sale of the Subject Property violated the Township Code and, therefore, the conveyances were void. The trial court granted summary relief to Township, Sewer Authority and the Wrights. Plaintiff appeals. Discerning no error, we affirm.

In November 2006, Plaintiff filed a declaratory judgment action. She alleged that in 2002, Township or Sewer Authority caused damages to the Wrights' land when installing sewer improvements. Consequently, the Wrights believed they had a cause of action for damages against Township or Sewer Authority.

The Wrights, Plaintiff alleged, entered settlement negotiations with Township and Sewer Authority. To resolve the Wrights' potential claim, Township and Sewer Authority conspired to contravene Section 1503 of the Township Code, below, by conveying the Subject Property*fn2 to the Wrights without adherence to the Code's mandatory publication and bidding requirements. Specifically, Township conveyed the Subject Property to Sewer Authority on January 2, 2002 for $3,000. A month later, Sewer Authority conveyed the Subject Property to the Wrights for $1.00.

Plaintiff alleged Township and Sewer Authority's actions contravened Section 1503 of the Township Code because the Subject Property is valued at more than $1,500. As relief, Plaintiff sought a declaration that: Section 1503 of the Township Code applied to the conveyances; the totality of the circumstances evidenced a sham transaction to circumvent the Code in order to settle the Wrights' potential claim; and the conveyances were void.

Following responsive pleadings and discovery, all parties moved for summary judgment. In a thoughtful opinion, the trial court, through the Honorable Steve P. Leskinen, reviewed the legislation authorizing Township and Sewer Authority's acts. Based on the clear statutory language, the court determined Section 1503 of the Township Code expressly authorized Township to convey the Subject Property to Sewer Authority. In turn, Section 5607 of the Municipality Authorities Act, 53 Pa. C.S. §5607, granted Sewer Authority the power to acquire and dispose of real property necessary to carry out its purposes. The trial court further noted Township and Sewer Authority's acts occurred at regularly scheduled public meetings. Accordingly, the trial court granted summary relief to Township, Sewer Authority and the Wrights.*fn3

On appeal,*fn4 Plaintiff assigns error in the trial court's determination that Township and Sewer Authority's actions did not violate the Township Code's mandatory public bidding requirements for sale of real property in excess of $1,500. Plaintiff contends that when viewed as a whole, the transactions prove Township violated Section 1503 in order to convey the Subject Property to the Wrights. Detailed below, Plaintiff cites Greater Fourth Street Associates, Inc. v. Smithfield Township, 816 A.2d 388 (Pa. Cmwlth. 2003), as support for her position. We conclude Greater Fourth Street is distinguishable and does not compel the same result here.*fn5

At the outset, we note, competitive bidding guards against favoritism, improvidence, fraud and corruption in the awarding of public contracts. In re 1983 Audit Report of Belcastro, 528 Pa. 29, 595 A.2d 15 (1991). "[F]airness lies at the heart of the bidding process, and all bidders must be . given the same fair opportunity to bid in free competition with each other." Greater Fourth Street, 816 A.2d at 392. Public officers are fiduciaries and, when dealing with public property, must act with the utmost good faith, fidelity and integrity. Id.

The competitive bidding requirements for the sale of real property are statutorily mandated. Applicable here, Section 1503 of the Township Code provides in relevant part and with emphasis added:

(a) No real estate owned by the township having a value in excess of fifteen hundred dollars ($1,500) may be sold except to the highest bidder after due notice by advertisement for bids or advertisement of a public auction in one newspaper of general circulation in the township. The advertisement shall be published once not less than ten days before the date set for the opening of bids or public auction, and the date for opening bids or public auction shall be announced in the advertisement. The award of contracts shall be made only by public announcement at a regular or special meeting of the board of supervisors or at the ...


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