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Honey Brook Estates v. Honey Brook Township

June 7, 2012


The opinion of the court was delivered by: O'neill, J.


Honey Brook Estates attempted to develop its property for residential use but its land development applications were denied. HBE now brings suit against Honey Brook Township, the Township's Board of Supervisors and Planning Commission and various municipal officials, alleging the violation of its rights to substantive due process and equal protection under federal law. HBE also asserts a civil conspiracy claim based on Pennsylvania law. Defendants now move for summary judgment. For the reasons that follow, I will grant defendants' motion with respect to HBE's federal claims and decline to exercise supplemental jurisdiction over HBE's remaining state-law conspiracy claim.


I. Township Considers Comprehensive Plan Update

This dispute centers around a property that plaintiff purchased at auction in December 2005. Pl.'s Ex. A at 116:22-122:20. Well before HBE acquired the property, however, the Township began a process that would ultimately result in a new zoning ordinance and affect HBE's ability to develop its land. At a meeting of the Township's Board of Supervisors on January 6, 2003, the Board first raised the desire to update the Township's comprehensive plan. Dkt. No. 47-4 at 7. Later that year, the Planning Commission, which makes recommendations to the Board of Supervisors, discussed the comprehensive plan update at its meetings. Id. at 9-12. By the spring of 2004, the Planning Commission was considering whether the comprehensive plan should be written "in house to save money" but it decided that "the undertaking was too complex, too extensive and too time consuming for the available staff." Id. at 26. The Planning Commission decided to move forward with interviews of three organizations that had submitted comprehensive plan proposals. Id. The Board of Supervisors selected the proposal of the Brandywine Conservancy on September 8, 2004. Id. at 33. Brandywine charged in excess of $49,000 for its proposal. Id.

The following month, the Board of Supervisors discussed the composition of a task force to manage the comprehensive plan update. Id. at 38. The Board decided that the project was too large for the Planning Commission to handle on its own and invited several individuals, including a former Supervisor and former Planning Commission chairs, to join the task force. Id. On December 17, 2004, the task force proposed an eighteen-month project schedule for the comprehensive plan update that was to begin in January 2005 and culminate with the adoption of the updated comprehensive plan in June 2006. Id. at 41-44.

In a May 17, 2005 memorandum to the task force, Brandywine wrote, "[w]e understand that the Township wants to provide for as little future growth as legally possible, in order to maintain Honey Brook's rural character and agricultural viability." Id. at 48. The memo included analyses of the Township's development potential, "fair share" obligation*fn1 and population projections. Id. at 48-52. At a joint meeting the following month between the Board of Supervisors and the task force, the group decided that "[t]he Township [was] easily satisfying its fair share requirement." Id. at 57. The group also agreed that the goals of the comprehensive plan update included "maintain[ing] the Township's historic resources and rural character" and "confin[ing] development to designated areas with appropriate infrastructure and largely composed of non-prime farmland soils." Id. at 59.

In an October 25, 2005 confidential memorandum to Honey Brook Township Manager Mike Brown, John Theilacker of Brandywine recommended a litany of changes to the Township's zoning map. See id. at 63-65. Theilacker advised "that the decision to proceed with zoning changes be kept fairly quiet at least until the formal public notice of the zoning amendments is released, lest you find a last-minute rush of land development applications." Id. at 63. Theilacker's recommendations included rezoning certain areas to avoid "more intense development in the future." Id. at 64.

Similarly, on December 16, 2005, Theilacker wrote Brown a memorandum recommending certain zoning ordinance amendments that he deemed "critical" because "important farmlands [were] at risk to indiscriminate land use actions that would result in their permanent loss." Id. at 75. Theilacker explained that "the Township's zoning accommodates much more development than necessary to comply with the Commonwealth's planning laws." Id. at 76. Accordingly, he recommended "shrinking the more intensive zoning districts in size." Id. Theilacker further recommended preparing zoning ordinance amendments right away "for immediate enactment following [Comprehensive] Plan adoption." Id. at 75.

II. The Property at 3561 Horseshoe Pike

Also on December 16, 2005, Honey Brook Estates purchased at public auction a forty- three-acre property at 3561 Horseshoe Pike in Honey Brook Township for $1.085 million. See id. at 79 & Pl.'s Ex. A at 122:20. Before the auction took place, however, others also showed interest in the property. Gary McEwen, a land developer in Honey Brook Township, states in a declaration that he contacted Township Manager Brown prior to the auction "to learn more about the property." Pl.'s Ex. J at 2. According to McEwen, Brown told him "that the Township was interested in purchasing property so that it could build a new Township building and a new fire station, and the Property was a possible location for both." Id. McEwen also states that Brown told him the property "may have soil issues." Id. As a result of this conversation with Brown, McEwen's company decided not to bid on the property. Id. Brown, on the other hand, does not remember talking with McEwen about the property. Pl.'s Ex. B at 131:4-5.

Ephraim Stoltzfus was also interested in the property because he wanted to start a farm there. Pl.'s Ex. H at 34:5-7. Before the auction, he met with Brown to discuss the prospect of "buying and sharing the ground." Id. at 44:20-23. He testified at his deposition that Brown "showed interest" in the property, but he could not remember what Brown said to give him that impression. Id. at 49:13-25. Whatever Brown said, Ephraim Stoltzfus came away from the conversation believing that Brown "would buy some on behalf of the township." Id. at 50:5-9. Brown, however, testified that he told Ephraim Stoltzfus that the Township was not interested in purchasing the property together with him. Pl.'s Ex. B at 217:25-218:3.

Ephraim Stoltzfus also testified that he discussed with Levi Stoltzfus of the Honey Brook Fire Company the prospect of jointly purchasing the property. Pl.'s Ex. H at 50:10-51:19.

According to Ephraim Stoltzfus, Levi Stoltzfus was "interested in" acquiring one third of the property. Id. at 51:13-19. Levi Stoltzfus admits that he spoke with Ephraim Stoltzfus about the property but maintains that he "told Ephraim that the Honey Book Fire Company was not interested in purchasing the land in conjunction with him." Dkt. No. 47-5 at 42.

Apart from Ephraim Stoltzfus, the Township and the Fire Company spoke directly with each other about purchasing the property at 3561 Horseshoe Pike together. Brown testified that after he met with Ephraim Stoltzfus he met with Levi Stoltzfus and discussed the property. Brown came away from his meeting with Levi Stoltzfus with the impression that the Fire Company "didn't have funding in place" to purchase the property or the time to "muster the votes" of Fire Company members in support of making the purchase. Pl.'s Ex. B at 216:23-217:8.

Defendant Weston Darby, who at the time of the auction was on the Board of Supervisors, testified that two members of the Fire Company approached him to discuss the property. See Dkt. No. 47-6 at 151:2-152:18. Brown was also present at the meeting. Id. at 154:4-5. Darby did not know the names of the Fire Company representatives. Id. at 152:13-15. According to Darby, however, "[t]hey raised the possibility of the township joining them on purchasing [the] property wherein they would have owned part of it and we would own part of it." Id. at 154:13-16. Darby was interested in acquiring new land for the Township and decided he would inspect the property. Id. at 167:19-168:5. After viewing the land, Darby concluded that "it just wasn't that good a piece of ground." Id. at 168:4. Darby told Brown the property was "not good for us" and after that "[i]t was a dead issue." Id. at 169:20-170:9.

Another member of the Board of Supervisors, defendant Donald Johnson, testified that there were "rumors" that the Township and the Fire Company were interested in purchasing the property at 3561 Horseshoe Pike. Dkt. No. 47-9 at 126:6-8. Johnson explained, however, that to his knowledge there was no truth to the rumors. Id. at 126:8-12. Johnson testified that Brown might have inspected the property on his own but that "he was not authorized . . . by the board to go check into purchasing it." Id. at 126:22-25. At one point in his deposition, Johnson denied having any conversations with other members of the Board of Supervisors about the Township and the Fire Company purchasing the property together. Id. at 126:14-17. Later, however, he testified that the Board of Supervisors conducted a session in which it "probably" discussed buying the property with the Fire Company. Id. at 180:4-9. Johnson explained that "[i]t was not a very good property" and that he "was not interested at all in purchasing the piece of property to begin with, let alone with Honey Brook Fire Company." Id. at 181:14-18.

Barry Messner, the Chief of the Honey Brook Fire Company, testified that a "future growth committee" of the Fire Company, Dkt. No. 47-12 at 19:14-15, met with Michael Brown to discuss purchasing a property together. Id. at 27:4-12. Messner recalled that nothing materialized after the future growth committee's meeting with Brown. Id. at 32:19-24.

Ultimately, HBE and Ephraim Stoltzfus were the only two bidders at the auction. Pl.'s Ex. A at 117:1-11. Despite the averments of Brown and Levi Stoltzfus that they told Ephraim Stoltzfus that they did not want the property, Ephraim Stoltzfus testified that he was "figuring on them buying it" when he participated in the auction. Pl.'s Ex. H at 72:5. But there was no written agreement between Ephraim Stoltzfus, the Township and the Fire Company to purchase the property. Ephraim Stoltzfus admitted at his deposition that he had "no agreement" with the Township or the Fire Company and that if he had won the property at auction, the Township and the Fire Company "could've walked away and [the property] would have been [his]." Id. at 52:13-18. He also admitted that "[t]hey weren't obligated to buy [the property]." Id. at 72:7-8.

Nonetheless, four days after HBE purchased the property at auction, Ephraim Stoltzfus contacted Michael Petrelia, the president of HBE, to offer him $1.16 million for the property, or $75,000 more than what HBE paid for it. Pl.'s Ex. G. Petrelia testified at his deposition that he "didn't take [the offer] very seriously." Pl.'s Ex. A at 126:1-2. He expected HBE to make a profit off the property of more than $75,000. Id. at 126:4-8. Additionally, after closing costs, HBE paid more than $1.2 million for the property; HBE would have lost money had it accepted Ephraim Stoltzfus's offer. Id. at 126:17-21.

Almost three years after the auction, on September 19, 2008, Ephraim Stoltzfus left a voicemail with Petrelia saying that he "was bidding for" himself, the Township and the Fire Company at the auction. Pl.'s Ex. I. He further stated in the voicemail that if he had won the property, "we would have shared it." Id. At his deposition, however, Ephraim Stoltzfus explained that his voicemail "might not be like it sounds." Pl.'s Ex. H at 80:4-5. Although he "expected" the Township and the Fire Company to each contribute one third of the purchase price of the property if he been the high bidder, he testified that "they didn't send [him] on their bid" and that he "was on [his] own." Id. at 80:10-11. He explained that in retrospect it would have been a "goof" had he won the property because it would have been "hard" for him to repay a bank loan all by himself. Id. at 71:3-13.

III. Township Proceeds with Comprehensive Plan Update and Zoning Changes After HBE purchased the property, the Township continued to update its comprehensive plan. The Planning Commission met on March 3, 2006 and discussed zoning ordinance amendments with Theilacker of Brandywine. See Dkt. No. 47-14 at 41. Minutes from the meeting note that "[o]ne of the findings in the comprehensive plan is the township has more land zoned for intensive residential uses than is legally required, leading to expanding suburbanization." Id. Later that month, on March 22, the Comprehensive Plan Update Task Force voted to approve a final draft of the comprehensive plan update and submit it to the Planning Commission. Id. at 45. The minutes also state that Michael Brown said the final draft "will be available for public review at the Township building, the Honey Brook Library and at the Chester County Planning Commission." Id. at 45-46. At its April 27 meeting the Planning Commission held a public meeting to receive comments on the comprehensive plan update draft. See id. at 56. Three people, none of whom were affiliated with HBE, expressed concerns about the plan. Id. at 56-57. Despite these concerns the Planning Commission voted to recommend the plan's adoption to the Board of Supervisors. Id. at 57.

The Board of Supervisors then voted at its May 10 meeting to authorize advertisement of public hearings for the comprehensive plan update to take place the following month. Id. at 60. Separately on May 10 the Township sent letters to property owners whose parcels were to be affected by Ordinance #119, which contained amendments to the Township's zoning ordinance and zoning map. See id. at 62. The letter notified recipients that a public meeting to consider Ordinance #119 was to take place June 14, 2006. Id. HBE was among the property owners to receive the letter. See id. HBE's letter stated that "[a] portion of [HBE's] property . . . is under consideration for remapping from the Residential District to the Agricultural District." Id. The letter explained that the zoning map amendments were "consistent with the new comprehensive plan." Id. At that time, however, the updated comprehensive plan had not yet been adopted.

The Board of Supervisors did not vote to adopt the plan until December 6, 2006. Pl.'s Ex. L.

After Petrelia received the Township's May 10 letter he contacted Earl Felty, a land surveyor, explaining that "[t]he situation with the property we purchased in Honey Brook Township has dramatically changed over the last 3 days." Dkt. No. 47-14 at 65. Petrelia explained that he "need[ed] to submit a by right plan to Honey Brook Township by the first week in June." Id. Specifically, Petrelia requested "a fully engineered preliminary plan for development." Id.

Around the same time that the Township advertised pending changes to the zoning map, Brown became concerned that the proposed changes "would probably prompt lots of hasty subdivision plans." Pl.'s Ex. B at 242:6-12. Accordingly, Brown consulted with Township Solicitor Kristin Camp to determine whether he had the authority to review applications for completeness and reject those that were incomplete. Id. at 242:13-18. According to Brown, Camp "basically concluded" that Brown could undertake a completeness review but she advocated a "belt-and-suspenders approach" wherein the Township would also review applications for compliance with the Township's zoning ordinances. Id. at 242:19-23. Accordingly, at that time Brown instructed either Township Engineer Reinert or Reinert's supervisor, Jeff Kerlin, that "we needed to make sure [applications] were reviewed for completeness before we got into the review process." Id. at 247:21-24. Although Brown could not recall if Reinert or Kerlin was the person with whom he spoke, Reinert recalled at his deposition talking with Brown about conducting a completeness review of land development applications. Pl.'s Ex. F at 34:8-24.

Reinert and Kerlin then consulted by telephone with the Township's other Solicitor, John Good, about the completeness review. Reinert wanted Good's legal opinion because at that time "it wasn't customary to do a review of . . . completeness of an application." Id. at 39:2-10. According to Reinert, Good advised that the Township "could review the applications and determine whether or not they were complete or incomplete." Id. at 40:20-22. Incomplete applications "were to be rejected and the reasons for the rejection of being incomplete should be noted in a letter and then returned -- all materials returned to the applicant." Id. at 41:3-7. Reinert explained that Brown was to determine whether an application was complete and Reinert was to identify any missing components of an application. Id. at 41:23-42:2 and 43:24-44:4. To Reinert's knowledge, the Township did not notify the public that it was going to review applications for completeness. Id. at 38:14-16.

Section 405 of the Township's Subdivision and Land Development Ordinance, entitled "Submission of Preliminary Plan," pertains to the Township's authority to review applications for completeness and reject those applications that are incomplete. Two subsections of Section 405 are especially pertinent. One subsection states that

2. Official submission of a preliminary plan to the Subdivision Officer shall consist of:

A. Two copies of the application for review of preliminary subdivision or land development plan on the form promulgated for this purpose.

B. Copies of the preliminary plan and all supporting plans and information to enable proper ...

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