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Allentown Patriots, Inc. v. City of Allentown

Commonwealth Court of Pennsylvania

May 23, 2017

Allentown Patriots, Inc., a/k/a Allentown Patriots of Allentown, PA
v.
City of Allentown and Edward J. Pawlowski, in his official capacity as the Mayor of the City of Allentown, Appellants Allentown Patriots, Inc., a/k/a Allentown Patriots of Allentown, PA, Appellants
v.
City of Allentown and Edward J. Pawlowski, in his official capacity as the Mayor of the City of Allentown

          ARGUED: March 7, 2017

          BEFORE: HONORABLE PATRICIA A. McCULLOUGH, JOSEPH M. COSGROVE, BONNIE BRIGANCE LEADBETTER, Senior Judge

          OPINION

          BONNIE BRIGANCE LEADBETTER, Senior Judge

         The City of Allentown and Mayor Pawlowski (collectively, the City) appeal from an order of the Court of Common Pleas of Lehigh County (common pleas) denying the City's motion for post-trial relief and/or new trial in a matter originating with a December 2014 complaint for declaratory relief against the City filed by the Allentown Patriots, Inc., a/k/a Allentown Patriots of Allentown, PA, (the Patriots). The precipitating event for the litigation was Mayor Pawlowski's 2014 advising of the City's termination of a 1967 agreement. In that agreement, the Patriots granted the City an option to purchase certain tracts of land in the Twelfth Ward (collectively, Patriots Park) that the nonprofit corporation was using for recreational purposes "only if and when" one of three events occurred: "(a) Seller shall cease to exist or dissolve, or (b) when Seller shall cease using the property solely for park or public recreation purposes, or (c) Seller shall convey or attempt to convey the property to a party other than Purchaser."[1] Advising the Patriots that the City was formally rejecting what he characterized as an "open offer option, " the Mayor stated that the City was no longer interested in purchasing Patriots Park, that it was relinquishing all rights under the agreement, and that, effective immediately, it was ceasing performance thereunder.

         In ruling on the ensuing litigation, common pleas concluded that the seven-page agreement was a valid and enforceable option contract, which the Mayor improperly terminated despite having termination authority, and that damages in the amount of $3948 were warranted due to the City's breach of the agreement when it stopped tendering the contemplated consideration. We reverse.

         Recorded in the Lehigh County Recorder of Deeds Office, the agreement is, at least nominally, an option contract[2] for the sale of real estate. It first provides that the Patriots are currently using the land for recreational purposes, that the City wants that land to continue to be used and made available for such purposes, and that the parties are in agreement with these principles. December 11, 2014, Complaint for Declaratory Relief, Exhibit B at 1; Reproduced Record (R.R.) at 48a. To that end, "[i]n consideration of the sum of One ($1.00) Dollar and other good and valuable consideration to it in hand paid by Purchaser [the City], the receipt whereof is hereby acknowledged, Seller [the Patriots] hereby agrees to grant an option to sell and convey to the Purchaser [the land and buildings described in the agreement]." Id. The agreement further provides that the City shall pay the Patriots one dollar per year for the option and that, upon exercise of the option, it "shall use the property only for park or public recreation purposes and shall not resell the property for any other use." Id. at 5; R.R. at 52a.

         Regarding activation of the option, paragraph 4 provides that it shall be effective "only if and when" one of the aforementioned three conditions occurs. Paragraph 5 provides as follows:

Upon the occurrence of any one of the events giving rise to this option, Purchaser may exercise its option within sixty (60) days after it shall first learn of the occurrence of such event. Upon any of the conditions under which this option is exercisable, the purchase price then payable by the City . . . to the Seller shall be the sum of One ($1.00) Dollar.

Id. at 5-6; R.R. at 52-53a.

         Regarding the parties' respective responsibilities during the option period, paragraph seven provides that the Patriots "shall be responsible for all applicable insurance coverage on the premises including, but not necessarily limited to, fire and theft and liability insurance." Id. at 6; R.R. at 53a. Paragraph nine provides that "[t]he City for the right granted to it by the Seller in this option, hereby agrees that it will maintain the grounds and softball fields, said maintenance to include the cutting of grass, the trimming of hedges, and general cleaning after major events held by the Seller." Id.

         Paragraph ten refers to a City-owned parcel adjacent to the land subject to the agreement and being used by the Patriots for recreational purposes. Pursuant to that paragraph, the City agrees that the Patriots "shall have the right to use said premises, without charge by the [City] to the [Patriots], as long as the premises owned by the [Patriots] are used for the purposes herein stated, namely, recreational activities conducted by the [Patriots]." Id.

         Further, the agreement provides that, if the option is exercised and the City effectuates the purchase, realty transfer taxes are to be divided equally and federal revenue stamps shall be the Patriots' responsibility. Id. Finally, it provides that the parties and their successors are bound by the agreement. Id. at 7; R.R. at 54a. Signatories included then Mayor Bracy and past Patriots President Philip Schantz.

         The circumstances leading to the present litigation involved the maintenance aspects of the agreement, which evolved over time. As common pleas observed, although the City "initially performed grass cutting, tree trimming, and leaf pick-up services at Patriots Park[, ]" the Patriots gradually assumed those duties. October 28, 2016, Common Pleas Opinion at 32. However, "[f]or the last several years prior to the [Mayor's July 2014, termination], the City . . . collected trash and recycling items from the park and provided services such as hedge trimming, cutting bushes, and snow plowing in the parking lots." Id. In any event, the Patriots' attorney sent the City a letter on July 9, 2014, referencing the agreement and complaining that the City had recently stopped picking up trash barrels and requesting that it resume trash pickup. December 11, 2014, Complaint for Declaratory Relief, Exhibit C at 1; R.R. at 57a. In response, the City Manager sent the Patriots a July 14 letter notifying the entity that the City would no longer provide trash and recycling collection services and that, pursuant to City Ordinance 12703, nonprofits were required to recycle and to provide trash and recycling services at their own expense. Id., Exhibit D at 1; R.R. at 58a.

         Subsequently, the Mayor in a July 30 letter, referencing the Patriots' July 9 letter, stated in pertinent part as follows:

After much discussion and review of the Master Parks Plan, this is to inform you that the City is no longer interested in the purchase of the real property described in the Agreement. Therefore, the City formally rejects the open offer option under the terms of the Agreement and relinquishes all rights under the Agreement. In view of ...

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