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Celestial Community v. City of Philadelphia; and Elser Street Properties

September 28, 2012

CELESTIAL COMMUNITY DEVELOPMENT CORP., INC.
v.
CITY OF PHILADELPHIA; AND ELSER STREET PROPERTIES, LLC, DEFENDANTS



The opinion of the court was delivered by: James Knoll Gardner United States District Judge

OPINION

This matter is before the court on two motions to dismiss: (1) Defendant City of Philadelphia's Motion to Dismiss Complaint Under Rule 12(b)(6), which motion to dismiss was filed on December 14, 2012 ("City's Motion to Dismiss"); and (2) Defendant, Elser Street Properties, LLC's Motion to Dismiss Plaintiff's Complaint Under Rule 12(b)(6), which motion to dismiss was filed on December 19, 2011 ("Elser Street LLC's Motion to Dismiss"). On January 17, 2012 plaintiff Celestial Community Development Corp., Inc. ("Celestial") filed a response in opposition to each defendant's motion. *fn1

SUMMARY OF DECISION

Plaintiff Celestial Community Development Corp., Inc. filed a three-count civil Complaint in the Court of Common Pleas of Philadelphia County, Pennsylvania, which was subsequently removed to federal court.

Count One against defendant City of Philadelphia is a federal claim brought pursuant to 42 U.S.C. § 1983. It alleges that defendant City, acting under color of Pennsylvania state law, deprived plaintiff of its property without just compensation in violation of the Fifth and Fourteenth Amendments to the United States Constitution (the "takings claim").

Count Two against defendant City is a pendent Pennsylvania state-law claim for fraudulent conveyance.

Count Three against defendant Elser Street Properties, LLC is a pendent Pennsylvania state-law claim for unjust enrichment.

For the reasons discussed below, I grant the City's Motion to Dismiss and dismiss defendant City of Philadelphia ("the City") from this action.

Specifically, I grant the City's motion and dismiss Count One from the Complaint because the section 1983 takings claim which plaintiff seeks to assert against the City is time-barred by the applicable statute of limitations.

Additionally, I grant the City's motion as unopposed and dismiss Count Two from the Complaint because of plaintiff's failure to respond to that portion of the City's motion. In the alternative, I dismiss Count Two on the merits because Count Two fails to state a claim against the City for fraudulent conveyance pursuant to Pennsylvania law; and because, if plaintiff is attempting to assert a fraudulent misrepresentation claim against the City in Count II, that claim is barred by governmental immunity and by the applicable statute of limitations.

Finally, after dismissing plaintiff's sole federal claim asserted in Count One, which was the basis for this court's jurisdiction, I decline to exercise pendent jurisdiction over plaintiff's remaining state-law unjust enrichment claim asserted against defendant Elser Street Properties, LLC ("Elser Street LLC") in Count Three. Accordingly, I remand this matter to the Court of Common Pleas of Philadelphia County.

Finally, I dismiss Elser Street LLC's Motion to Dismiss as moot without prejudice for Elser Street to raise the issues contained in its motion to dismiss regarding Count Three as preliminary objections in state court.

JURISDICTION

This court has original, federal question jurisdiction over plaintiff's federal constitutional claim in Count One pursuant to 28 U.S.C. § 1331. This court has supplement jurisdiction over plaintiff's state law claims in Counts Two and Three pursuant to 28 U.S.C. § 1367(a).

VENUE

Venue is proper pursuant to 28 U.S.C. § 1391(b)(2) because the events giving rise to plaintiff's claim allegedly occurred, and a substantial part of property that is the subject of this action is situated, in this judicial district.

PROCEDURAL HISTORY

Plaintiff Celestial Community Development Corp., Inc. filed its Complaint in the Court of Common Pleas of Philadelphia County, Pennsylvania, to Term Number 110800219 on August 26, 2011. Celestial named the City of Philadelphia, Elser Street Properties, LLC, Elkins Park Abstract Co. ("Elkins Park Abstract"), and the law firm of Friedman, Schuman, Applebaum Nemeroff & McCafferey, P.C. ("the Law Firm") as defendants.

On September 13, 2011 the City removed this action from the Philadelphia Court of Common Pleas to this court. *fn2

Defendants Elkins Park Abstract the Law Firm filed a motion to dismiss Celestial's claims against them on November 29, 2011. By Order dated January 3, 2012 and filed January 4, 2012, I granted that motion as unopposed and dismissed defendants Elkins Park Abstract and the Law Firm as parties to this action.

Defendant City of Philadelphia's Motion to Dismiss was filed December 14, 2011. Defendant Elser Street Properties' Motion to Dismiss was filed December 19, 2011. Plaintiff Celestial filed its response to each motion on January 17, 2012. Hence this Opinion.

STANDARD OF REVIEW

A claim may be dismissed under Federal Rule of Civil Procedure 12(b)(6) for "failure to state a claim upon which relief can be granted." A Rule 12(b)(6) motion requires the court to examine the sufficiency of the complaint. Conley v. Gibson, 355 U.S. 41, 45, 78 S.Ct. 99, 102, 2 L.Ed.2d 80, 84 (1957) (abrogated in other respects by Bell Atlantic Corporation v. Twombly, 550 U.S. 544, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007)). Generally, in ruling on a motion to dismiss, the court relies on the complaint, attached exhibits, and matters of public record, including other judicial proceedings. Sands v. McCormick, 502 F.3d 263, 268 (3d Cir. 2008).

Except as provided in Federal Rule of Civil Procedure 9, a complaint is sufficient if it complies with Rule 8(a)(2), which requires "a short and plain statement of the claim showing that the pleader is entitled to relief". Rule 8(a)(2) does not require heightened fact pleading of specifics, but only enough facts to state a claim to relief that is plausible on its face. Twombly, 550 U.S. at 570, 127 S.Ct. at 1974, 167 L.Ed.2d at 949. *fn3

In determining whether a complaint is sufficient, the court must accept all factual allegations as true, construe the complaint in the light most favorable to the plaintiff, and determine whether, under any reasonable reading, the plaintiff may be entitled to relief. Fowler, 578 F.3d at 210 (citing Phillips v. County of Allegheny, 515 F.3d 224, 233 (3d Cir. 2008)).

Although "conclusory" or "bare-bones allegations" will not survive a motion to dismiss, Fowler, 578 F.3d at 210, 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. Phillips, 515 F.3d at 231. Nonetheless, to survive a Rule 12(b)(6) motion, the complaint must provide "enough facts to raise a reasonable expectation that discovery will reveal evidence of the necessary element." Id. at 234 (quoting Twombly, 550 U.S. at 556, 127 S.Ct. at 1965, 167 L.Ed.2d at 940) (internal quotations omitted).

The court is required to conduct a two-part analysis when considering a Rule 12(b)(6) motion. First, the factual matters averred in the complaint, and any attached exhibits, should be separated from legal conclusions asserted. Fowler, 578 F.3d at 210. Any facts pled must be taken as true, and any legal conclusions asserted may be disregarded. Id. at 210-211.

Second, the court must determine whether those factual matters averred are sufficient to show that the plaintiff has a "plausible claim for relief." Id. at 211 (quoting Iqbal, 556 U.S. at 679, 129 S.Ct. at 1950, 178 L.Ed.2d at 884).

Ultimately, this two-part analysis is "context-specific" and requires the court to draw on "its judicial experience and common sense" to determine if the facts pled in the complaint have "nudged [plaintiff's] claims" over the line from "[merely] conceivable [or possible] to plausible." Iqbal, 556 U.S. at 679-680, 129 S.Ct. at 1949-1951, 178 L.Ed.2d at 884-885.

A well-pled complaint may not be dismissed simply because "it strikes a savvy judge that actual proof of those facts is improbable, and that a recovery is very remote and unlikely." Twombly, 550 U.S. at 556, 127 S.Ct. at 1965, 167 L.Ed.2d at 940-941 (internal quotations omitted).

FACTS

Based on the averments in plaintiff's Complaint, the exhibits to the Complaint, and the public-record exhibits to the parties' motion papers, each of which I must accept as true for purposes of this Opinion under the applicable standard of review discussed above, the pertinent facts are as follows.

Parties

Plaintiff Celestial Community Development Corp., Inc. is a tax-exempt non-profit corporation organized under the laws of the Commonwealth of Pennsylvania. Celestial is also know as the "Celestial Tabernacle Holiness Church of God" and has an office at 2808-2814 West Thompson Street, Philadelphia, Pennsylvania 19121. *fn4 Plaintiff church has a membership of approximately 300 people, and, as part of its mission, does community development work in "drug addled neighborhoods of North Philadelphia." As part of Celestial's redevelopment work, it acquires and restores old properties "in order to establish positive community centers as a counter balance to the drug activity and violence in the neighborhood." *fn5

Defendant City of Philadelphia is Pennsylvania municipal government entity. The City's Law Department is located at 1515 Arch Street, Philadelphia, Pennsylvania 19102. The City operates the Office of the City and County of Philadelphia. *fn6

Defendant Elser Street Properties, LLC is a Pennsylvania limited liability company which has an office at 622 Minor Street, Reading, Pennsylvania 19622. *fn7

The Property This civil action concerns a block of property in north Philadelphia, Pennsylvania identified by Celestial as 2808-2814 West Thompson Street, which Celestial refers to as the "Subject Premises". More precisely, this action concerns the dispute over 2808 West Thompson Street, and 2810-2814 West Thompson Street. The portion of the Subject Premises which plaintiff identified as 2810-2814 West Thompson Street is also known as 1257 North Newkirk Street. *fn8 For ease of reference, I will refer to the two portions of the contested property as 2808 West Thompson Street and 1257 North Newkirk Street, respectively, in this Opinion.

By a single deed dated June 25, 1986 and recorded in the Office of the Recorder of Deeds of Philadelphia County in Deed Volume 510, page 325, Flora J. Kricheff, Grantor, conveyed both 2808 West Thompson Street and 1257 North Newkirk Street to Hugh R. Older, Grantee. Sometime in February 2004, the City initiated two actions against Mr. Older, who, at that time, owned both 2808 West Thompson Street and 1257 North Newkirk Street. Those actions concerned Mr. Older's municipal tax delinquencies.

The first of those actions, Philadelphia v. Older I, resulted in the sheriff's tax sale of 2808 West Thompson Street on August 18, 2004. *fn9 The second action, Philadelphia v. Older II, resulted in the sheriff's tax sale of 1257 North New-kirk Street on November 19, 2008. *fn10

Alleged Deficiencies in August 18, 2004 Sheriff's Tax Sale

Celestial avers that certain errors were made by the City -- through the sheriff's office -- in the execution of the August 18, 2004 sheriff's ...


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