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Orange Stones Co. v. City of Reading

Commonwealth Court of Pennsylvania

March 21, 2014

Orange Stones Co., Appellant
City of Reading and Fred Lachat

Argued: February 11, 2014.

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[Copyrighted Material Omitted]

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Appealed from No. 12-19696. Common Pleas Court of the County of Berks. Sprecher, J.

George W. Bishop, Williamsport, for appellant.

Christine D. Steere, Media, for appellees.



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Orange Stones Company (Orange Stones) appeals the February 19, 2013 order of the Court of Common Pleas of Berks County (trial court), which sustained the preliminary objections of the City of Reading (the City) and the City's attorney Fred Lachat (Lachat),[1] (collectively, Defendants) and dismissed with prejudice Orange Stones' second amended complaint asserting claims for wrongful use of civil proceedings, abuse of process, and intentional interference with contractual relations. We affirm.

I. Facts/Procedural History

By way of background, the City filed a complaint before a magisterial district judge (MDJ) in November 2011, seeking

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civil penalties for Orange Stones' continued violations of an allegedly un-appealed enforcement notice/stop work order (Enforcement Notice) dated August 14, 2008. The Enforcement Notice stated that Orange Stones violated the City's ordinance by creating and establishing a business office without the required permit. (R.R. at 18a-22a.) In response, Orange Stones filed a cross-complaint in February 2011, averring that the Enforcement Notice was technically defective on a variety of grounds; that Orange Stones attempted to appeal the Enforcement Notice, but the City refused to accept the appeal; and that the City's complaint was vexatious, frivolous, and brought in bad faith. (R.R. at 271a-81a.) On March 21, 2012, the City voluntary withdrew its complaint against Orange Stones without stating a reason. (R.R. at 282a.)

Orange Stones' cross-complaint proceeded to disposition, and, following a hearing, an MDJ found that the City's complaint was frivolous and awarded judgment in favor of Orange Stones in the amount of $12,181.55. (R.R. at 3a.) The City then filed an appeal de novo to the trial court and issued a praecipe upon Orange Stones to file a complaint. (R.R. at 7a.)

On September 11, 2012, Orange Stones filed a complaint in the trial court, and an amended complaint as a matter right after Defendants filed preliminary objections. Defendants then filed preliminary objections to the amended complaint, and, on December 17, 2012, the trial court granted these objections without prejudice to Orange Stones filing a second amended complaint to address the deficiencies raised in Defendants' objections and to aver sufficient facts to support its claims. (R.R. at 957a.)

On January 14, 2013, Orange Stones filed its second amended complaint and alleged as follows. Orange Stones is a corporation located in Williamsport, Lycoming County, and does business in the City as a drug and alcohol rehabilitation facility; the City is a municipal corporation organized under the Third Class City Code, Act of June 23, 1931, P.L. 932, as amended, 53 P.S. § § 35101-39701; and Lachat, at all relevant times, was acting as an agent and employee of the City. (R.R. at 960a.)

According to Orange Stones' second amended complaint, the City's civil complaint before the MDJ alleged that Orange Stones failed to appeal the August 14, 2008 Enforcement Notice and sought civil penalties based upon violations of the Enforcement Notice. However, the Zoning Administrator " unlawfully" refused to accept a timely, written appeal that Orange Stones' representative presented in person and via facsimile; the City's Zoning Hearing Board (ZHB) refused to hear the appeal; and the City deprived the ZHB of jurisdiction to hear the appeal by filing for an injunction in the trial court. (R.R. at 960a-62a.)

Further, Orange Stones' second amended complaint stated that the Enforcement Notice was " defective" and in violation of the ordinance at the time it was issued for numerous reasons. Namely, the Enforcement Notice was not sent to the proper owner of the property or his designee; it failed to list specific violations with citations to applicable provisions of the ordinance; it did not mandate a specific date in which the remedial measures must be completed; and it did not include a provision required by the ordinance directing that continued non-compliance could result in civil remedies. (R.R. at 960a.)

Finally, Orange Stones' complaint alleged that the City's complaint before the MDJ was " improper" on the ground that the complaint sought civil penalties for each day of the alleged violation, whereas

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the ordinance only permits a judgment of not more than $500. Also, the City's complaint was barred under the doctrine of laches, which, allegedly, only allows the filing of an action within two years of the purported violation and the City waited over three years. (R.R. at 962a.)

Based upon these averments, Orange Stones asserted that Defendants " acted with actual malice and willful misconduct in order to impair [Orange Stones'] ability to operate at the subject property." (R.R. at 963a.) Orange Stones alleged that Defendants " maliciously filed a complaint which they knew to be frivolous and not based in fact in order to shut down [Orange Stones'] business and in order to impede its ability to service its clientele." (R.R. at 963a.) On these grounds, Orange Stones stated claims for wrongful use of civil proceedings, abuse of process, and intentional interference with contractual relations.

With respect to the wrongful use of civil proceedings claim, Orange Stones averred that Defendants engaged in willful misconduct when they filed the complaint before the MDJ without probable cause and/or based upon an inadequate investigation which would have revealed a meritless Enforcement Notice. (R.R. at 964a-96a.)

In regards to the abuse of process claim, Orange Stones contended that Defendants improperly used the proceedings before the MDJ to force Orange Stones to shut down its operations, which is not a legitimate object of the legal process. (R.R. at 969a-70a.)

Concerning the intentional interference claim, Orange Stones averred that it has " contracts with Managed Care Organizations and County and State Agencies regarding services it provides to individuals with drug and alcohol dependencies." (R.R. at 967a.) Orange Stones asserted that " [b]y publicly posting the property with the [Enforcement Notice] and, by filing the false and improper complaint, Defendants interfered with these contracts as well as impeded [Orange Stones] from fulfilling its obligations to third parties under those contracts." (R.R. at 967a.)

Orange Stones alleged that all actions undertaken by Defendants were outrageous, willful, malicious, and without legal justification and that as a result, Orange Stones has suffered consequential damages, including attorneys' fees, legal costs, and harm to its business reputation. (R.R. at 968a.)

On January 14, 2013, Defendants filed preliminary objections to Orange Stones' second amended complaint. Defendants asserted that Orange Stones' three claims were legally insufficient (demurrer) and were barred under the governmental immunity provisions of sections 8541 and 8542 of the Judicial Code, 42 Pa.C.S. § § 8541-8542,[2] commonly referred to as

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the Political Subdivision Tort Claims Act (Tort Claims Act). Defendants further asserted that Orange Stones' claims against Lachat were barred under the doctrine of high public official immunity. (R.R. at 1255a-84a.)

In its response to Defendants' preliminary objections, Orange Stones contended that the second amended complaint stated viable causes of action for wrongful use of civil proceedings, abuse of process, and intentional interference with contractual relations. (R.R. at 1599a-1605a.) Orange Stones also contended that Defendants improperly raised immunity defenses by way of preliminary objections which, according to Orange Stones, must be raised as new matter in a responsive pleading. (R.R. at 1605a-06a.)

Finally, Orange Stones maintained that Lachat is not shielded with governmental/official immunity under section 8550 of the Tort Claims Act[3] because he was acting as an employee of the City and committed willful misconduct and/or intentional torts. Orange Stones further argued that Lachat is not entitled to high public ...

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