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Southersby Development Corporation v. Borough of Jefferson Hills

February 14, 2012


The opinion of the court was delivered by: Magistrate Judge Maureen P. Kelly

Re: ECF Nos. 96, 101


KELLY, Magistrate Judge

Plaintiff, Southersby Development Corporation ("Southersby"), a real estate developer, filed this action against the Borough of Jefferson Hills ("the Borough") and William L. McVicker ("McVicker") (collectively "Defendants"), a former Borough employee, pursuant to 42 U.S.C. § 1983 ("Section 1983"), alleging that Defendants violated its right to equal protection under the Fourteenth Amendment and its right to free speech under the First Amendment relative to the development of a residential property known as Patriot Pointe. Pending before the Court is a Motion for Summary Judgment submitted by Defendant McVicker and a Motion for Partial Summary Judgment submitted by the Borough. ECF Nos. 96, 101. For the reasons that follow, both Motions will be granted in part and denied in part.


Southersby purchased property within the Borough in order to develop a residential community known as Patriot Pointe - Phases I, II and III. ECF No. 60, ¶¶ 6, 7. In the spring of 2009, when the time came to proceed with Phase III of the project, the working relationship between Southersby and the Borough began to deteriorate. In particular, tension arose when the Borough delayed in returning the Phase III Developer=s Agreement ("the Agreement"). Although Southersby requested a draft of the Agreement from the Borough on May 21, 2009, it did not receive it until June 27, 2009. Id. at ¶¶ 10-11. Southersby, however, objected to what it has described as "unreasonable and unlawful" provisions in the Agreement, including the Borough requiring Southersby to waive its right to a jury trial. Id. at ¶ 11. The Borough subsequently agreed to remove the offending provisions, but did not execute the Agreement until August 24, 2009. Id. at ¶ 12. The delay in executing the Agreement, coupled with the Borough's denial of Southersby's application for preliminary approval of Phase III-B, prevented Southersby from proceeding with the project to its financial detriment. Id. at ¶¶ 14-15.

Southersby also contends that the Defendants have selectively applied Borough ordinances and road specifications; imposed unreasonably stringent inspection and testing specifications; and imposed fees not required of other developers. It also claims unfair and arbitrary treatment by Defendants in connection with an access road, a sign permit, and a grouting plan. Id. at ¶¶ 22, 23, 28. Defendant McVicker, individually, is alleged to have interfered with homebuilders= permits and to have lodged frivolous complaints with the Allegheny County Conservation District ("ACCD"). Id. at ¶ 23. As well, Southersby alleges that McVicker and Aother agents of Jefferson Hills@ had personal or business relationships with other land developers and Borough residents who opposed or stood to benefit from blocking Phase III development. Id. at 25. Through these relationships, Defendants are said to have engaged in corruption and self-dealing. Id. at 26.

Southersby initiated this action on September 12, 2008, by filing a Praecipe for Writ of Summons in the Court of Common Pleas of Allegheny County, Pennsylvania. Southersby filed its Complaint on January 22, 2009, and on February 19, 2010, Defendants removed the case to this Court pursuant to 28 U.S.C. § 1446. In response to a Motion to Dismiss filed by Defendants, in which they sought dismissal of Southersby's substantive due process claim brought at Count II of the Complaint, Southersby filed an Amended Complaint on August 20, 2009. Finding that Southersby had failed to cure the deficiencies as to that claim, the Court granted Defendants' renewed Motion to Dismiss in an Order dated April 20, 2010. ECF No. 32. Southersby subsequently filed a Second Amended Complaint on February 11, 2011, in which it brings claims against the Borough and McVicker under the equal protection clause of the Fourteenth Amendment (Count I); claims against the Borough for retaliation and restraint of speech under the First Amendment (Counts II and III, respectively); and a claim for Breach of Contract against the Borough (Count IV). ECF No. 60. Defendants filed Answers to the Second Amended Complaint on February 24, 2011. ECF Nos. 62, 63.

On October 3, 2011, following the resolution of an elongated discovery dispute, Defendant McVicker filed a Motion for Summary Judgment, ECF No. 96, and the Borough filed a Partial Motion for Summary Judgment. ECF No. 101. These motions are now ripe for review.


Summary judgment is warranted only where Athe pleadings, the discovery and disclosure materials on file, and any affidavits show that there is no genuine issue as to any material fact and that the movant is entitled to a judgment as a matter of law.@ Fed. R. Civ. P. 56(c). The moving party bears the initial burden of demonstrating to the court that there is an absence of evidence to support the non-moving party=s case. Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986). See Conoshenti v. Public Service Electric & Gas Company, 364 F.3d 135, 140 (3d Cir. 2004). When the moving party has met this burden, the burden then shifts to the nonmoving party to Aset forth specific facts showing that there is a genuine issue for trial.@ Fed. R. Civ. P. 56(e) (2). The mere existence of some evidence favoring the non-moving party, however, will not defeat the motion. There must be enough evidence with respect to a particular issue to enable a reasonable jury to find in favor of the non-moving party. Anderson v. Liberty Lobby, 477 U.S. 242, 248 (1986). See McGreevy v. Stroup, 413 F.3d 359, 363-64 (3d Cir. 2005). In evaluating the evidence at the summary judgment stage, the court must view the facts in the light most favorable to the non-moving party and draw all reasonable inferences in its favor. Matreale v. New Jersey Dep't of Military & Veterans Affairs, 487 F.3d 150, 152 (3d Cir. 2007). III. DISCUSSION

A. The Borough's Motion for Partial Summary Judgment

1. Statute of Limitations

The Borough initially argues that it is entitled to summary judgment in its favor on "several" of Southersby's equal protection claims because they are barred by the applicable statute of limitations. Noting that Southersby has identified sixteen instances of alleged "unequal and discriminatory treatment" in the Second Amended Complaint, the Borough argues that, to the extent the violations identified in paragraphs 23 a, b, c, d, e, h, i and j, are premised on conduct that occurred prior to September 12, 2006, they are untimely.

It is well established that the statute of limitations for Section 1983 claims is governed by the applicable state's statute of limitations for personal-injury claims. Gilarno v. The Borough of Freedom, 2010 WL 3522112 at *4 (W.D. Pa. Sept. 8, 2010). See Wallace v. Kato, 549 U.S. 384, 387 (2007). In Pennsylvania, a personal injury claim must be filed within two years. 42 Pa. C.S. § 5524(2) (2004). Thus, Southersby's Section 1983 claims are subject to a two year statute of limitations. Gilarno, 2010 WL 3522112 at *4.

Although the applicable statute of limitations period is governed by state law, federal law dictates when a Section 1983 cause of action accrues. Wallace, 549 U.S. at 388. Generally, a cause of action accrues and the statute of limitations begins to run "when the plaintiff knew or should have known of the injury upon which its action is based." Sameric Corp. of Delaware, Inc. v. City of Philadelphia, 142 F.3d 582, 599 (1998). That is, "a Section 1983 claim accrues at the time when the injury is sustained" or "'when the plaintiff has a complete and present cause of action.'" Koehnke v. City of McKeesport, 350 Fed. Appx. 720, 723 (3d Cir. 2009), cert. denied, ___ U.S. ___, 130 S. Ct. 2404 (2010), quoting Wallace, 549 U.S. at 388 (internal quotations and citations omitted). Moreover, "'[t]he cause of action accrues even though the full extent of the injury is not then known or predictable.'" Wallace, 549 U.S. at 391, quoting 1 C. Corman, Limitations of Actions § 7.4.1, at 526-27 (1991).

As previously discussed, Southersby initiated this action in the Court of Common Pleas of Allegheny County, Pennsylvania on September 12, 2008. Thus, any claims that accrued prior to September 11, 2006, including many of the claims raised in paragraphs 23 a, b, c, d, e, h, i and j of the Second Amended Complaint, are barred by the two year statute of limitations.

a. The Discovery Rule

Southersby does not dispute that the Section 1983 claims set forth in paragraphs 23 a, b, c, d, e, h, i and j of the Second Amended Complaint accrued prior to September of 2006, but nevertheless argues that the running of the limitations period should be tolled under the discovery rule. See William A. Graham Co. v. Haughey, 646 F.3d 138, 150 (3d Cir. 2011), cert. denied, ___ U.S. ___, 132 S. Ct. 456 (2011) ("we do not think the discovery rule should be read to alter the date on which a cause of action accrues. . . . the discovery rule must instead . . . operate to toll the running of the limitations period after a cause of action has accrued . . . "). Under the discovery rule, "'where the existence of the injury is not known to the complaining party and such knowledge cannot be reasonably ascertained within the prescribed statutory period, the limitations period does not begin to run until the discovery of the injury is reasonably possible.'" Smith v. IMG Worldwide, Inc., 437 F. Supp. 2d 297, 305 (E.D. Pa. 2006), quoting Gatling v. Eaton Corp., 807 A.2d 283, 289 (Pa. Super. 2002). See Vessels v. City of Philadelphia, 2011 WL 4018137 at *6 (E.D. Pa. Sept. 8, 2011), quoting Mest v. Cabot Corp., 449 F.3d 502, 510 (3d Cir. 2006) ("Under the discovery rule, the statute of limitations does not begin to run until 'the plaintiff knows, or reasonably should know, (1) that he has been injured, and (2) that his injury has been caused by another party's conduct'").

Southersby contends that, because it did not receive bills, invoices, inspection reports and other records for similarly situated developers from the Borough until "just prior to April 23, 2008," it did not begin to discover the existence and extent of the inequitable treatment it had suffered at the hands of Defendants until then. Southersby therefore concludes that the statute of limitations for the events at issue should be tolled between the time they accrued and April of 2008, rendering them timely. This Court disagrees.

The gist of Southersby argument is that because they did not receive documentation that other developers had been treated more favorably until April of 2008, they were unaware that it had suffered an injury. The issue, however, is not when Southersby discovered that the requirements imposed upon it by the Borough were discriminatory, but rather the issue is when it became aware that it had suffered an injury in the first instance. See Oshiver v. Levin, Fishbein, Sedran & Berman, 38 F.3d 1380, 1386 (3d Cir. 1994) ("a claim accrues in a federal cause of action upon awareness of actual injury, not upon awareness that this injury constitutes a legal wrong"). See also Podobnik v. U. S. Postal Service, 409 F.3d 584, 590-91 (3d Cir. 2005) (declining to extend the reach of the discovery rule to delay accrual until the plaintiff learned that a legal injury occurred, noting that the plaintiff had not claimed that he was unaware that the USPS had reduced his route on March 10, 1998, which was the only date that an alleged injury occurred).

With respect to the allegations in the Complaint, Southersby was aware in June of 2004 and July of 2005, when the Developer's Agreements for Phases I and II were executed, that it was obligated to use limestone in the construction of its base roadways rather than slag [ECF No. 60, ¶ 23a]; to the extent Southersby was subjected to unreasonably stringent inspections and charged excessive fees prior to September 12, 2006, it was necessarily cognizant of those events as they occurred [ECF No. 60, ¶¶ 23b, e]; it was also aware prior to August of 2006 that it was required to conduct and pay for density testing and core sampling during road installation of Phases I and II [ECF No. 60, ¶ 23c]; it was aware as early as October of 2003 that it was required to install storm sewers in the front of the building at what Southersby claims is an unreasonable depth [ECF No. 60, ¶ 23d]; it was aware in August of 2006 that the Borough allegedly attempted to unlawfully draw on the funds of Southersby's bond for completion of Independence Drive [ECF No. 60, ¶ 23h]; it was aware in June of 2004 and July 2005, by reason of the Developer's Agreements for Phases I and II, that it was required to develop a grouting plan and obtain bonds for the costs [ECF No. 60, ¶ 23i]; and, finally, it was aware in August of 2006 that McVicker allegedly threatened to withdraw and/or delay issuing building permits [ECF No. 60, ¶ 23j]. Thus, Southersby knew, or reasonably should have known, that these injuries occurred in or before August of 2006 and that they were caused by the Borough.*fn1 The mere fact that it did not have documentary evidence that that the Borough's actions may have been discriminatory until 2008 is of no moment. See Oshiver, 38 F.3d at 1386; Ormsby v. Luzerne Cnty. Dept. of Pub. Welfare Office of Human Servs., 149 Fed. Appx. 60, 63-63 (3d Cir. 2005) (concluding that Section 1983 and 1985 claims accrued when plaintiff learned that she suffered injuries due to defendants' actions, not when she "obtained all of the facts surrounding her claims and realized that the defendant had violated her constitutional and civil rights") (internal quotation marks omitted). As such, the statute of limitations with respect to these claims is not tolled by the discovery rule and Southersby was obligated to file suit within two years of their occurrence or by August of 2008. Because Southersby did not initiate this action until September of 2008, to the extent that Southersby's claims set forth in paragraphs 23 a, b, c, d, e, h, i and j of the Second Amended Complaint occurred before September 12, 2006, they are barred by the two year statute of limitations. Obviously, any claims referenced in these paragraphs that occurred after September 12, 2006, are not precluded.

b. The Continuing Violation Doctrine

Southersby also argues that because the Borough's conduct was part of a continuing practice, the continuing violation doctrine applies rendering all of its ...

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