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City of Philadelphia v. Galdo

Supreme Court of Pennsylvania

September 26, 2019

CITY OF PHILADELPHIA, Appellant
v.
FRANCIS GALDO, Appellee

          ARGUED: May 15, 2019

          Appeal from the Order of Commonwealth Court entered on 03/28/2018 at No. 1953 CD 2016, vacating and remanding the Judgment entered on 05/27/2016 in the Court of Common Pleas, Philadelphia County, Civil Division at No. 2885 April Term 2014.

          SAYLOR, C.J., BAER, TODD, DONOHUE, DOUGHERTY, WECHT, MUNDY, JJ.

          OPINION

          BAER, JUSTICE.

         This appeal involves an ejectment action commenced by the City of Philadelphia ("City") against Francis Galdo and a counterclaim to quiet title filed by Galdo, claiming ownership of the property at issue by adverse possession. The trial court ruled in favor of the City, holding that it was immune from suit because a claim of adverse possession cannot lie against a municipality. The Commonwealth Court vacated the trial court's order and remanded for trial on the adverse possession claim. The court held that the adverse possession claim could proceed against the City because the property was not devoted to a public use during the twenty-one-year prescriptive period, as required for immunity to apply. For the reasons set forth herein, we agree that the City is not immune from a claim of adverse possession under the facts presented and affirm the order of the Commonwealth Court.

         I. Background

         The record establishes that the property at issue in this appeal is a rectangular lot of undeveloped land located at 1101-1119 N. Front Street in Philadelphia (hereinafter, "the Parcel"). To understand the origin of the City's ownership of the Parcel, we begin by observing that on May 31, 1956, the City passed an ordinance granting consent to the Department of Highways of the Commonwealth of Pennsylvania to establish and occupy rights of way and certain traffic interchanges for the construction of the Delaware Expressway between the Walt Whitman Bridge and Poquessing Creek in Philadelphia. The City entered into an agreement with the Commonwealth on July 30, 1962, to assist in the construction of the various state highways. The agreement stated, inter alia, that the City would cooperate with the Commonwealth by: securing the City Planning Commission's approval of the final approved construction plans; contributing to the construction costs of the Delaware Expressway and its appurtenances; and providing the detour of traffic necessitated within the City before and during the construction period. The agreement did not require the City to condemn property, but provided, instead, that "[c]ondemnation shall be effected by the Commonwealth." Agreement between City of Philadelphia and Commonwealth of Pennsylvania, 7/30/1962, at ¶ 8.

         Nevertheless, in 1974, City Council passed an ordinance authorizing the Commissioner of Public Property to execute a Declaration of Taking of several properties, including the Parcel. On November 13, 1974, the City obtained fee simple title to the Parcel by condemnation, with the notice of condemnation stating that the Parcel had been condemned for transit purposes. At a public hearing regarding the condemnation held before the City Council Committee on Public Property and Public Works, testimony was presented establishing that the purpose of condemning the Parcel and other properties in the immediate area was to divert temporarily the Frankford Elevated train line so that the Commonwealth could construct Legislative Route 1000 ("I-95"). Notes of Testimony ("N.T."), Philadelphia City Council Meeting, 9/10/1974, at 2. Notably, it was further established at the hearing that, upon completion of new I-95, the City intended that the temporary structure constructed to facilitate that highway project would be demolished and that the land condemned would be available for disposition by the City. Id. at 3, 4, and 13.

         On January 19, 1976, the Commonwealth filed a notice of condemnation against several of the City's lots, indicating that the Commonwealth would permanently retain the land in the I-95 right-of-way, and that the Commonwealth would have a temporary easement on other condemned properties, including the Parcel condemned by the City, during the period that the Elevated Frankford train line was rerouted to allow for construction of I-95. Germane to this appeal, the parties agree that the City has not physically occupied the Parcel since completion of the work connected to the rerouting of the Elevated Frankford train line in the 1970s.[1] Parties' Stipulated Facts, 3/22/2016, at ¶ 16. Further, it is undisputed that the City has not performed any maintenance, grass-cutting, grading, or landscaping on the Parcel. Id. at ¶ 17. Instead, after the highway construction was completed, the City viewed the Parcel as "surplus property" that was not actively being used. N.T. (Deposition of Ilene Burak), 10/26/2015, at 10.

         At least a decade after construction of I-95 had been completed, in September of 1989, Galdo purchased a two-story dwelling on 1115 N. Lee Street, Philadelphia, which is located directly across the street from the Parcel. At that time, the Parcel was not being maintained and was purportedly home to "prostitutes" and "derelicts". N.T. (Deposition of Nancy Klenk), 10/26/2015, at 17. In early 1990, Galdo cleared the Parcel of weeds and trash, poured a concrete slab, and parked his vehicles there. He also used the Parcel to discard debris from the remodeling of his home. By 1992, Galdo poured another concrete slab on the Parcel for storing materials and enclosed that area with a fence. In 1994, he installed on the Parcel a fire pit and a picnic table affixed to the ground.

         In 1997, a nearby factory burned down and Galdo created a driveway on the Parcel with materials collected from the remains of the factory. He also planted two maple trees and built a carport with metal poles, which was later replaced with a wooden pavilion. Additionally in 1997, Galdo converted the fire pit on the Parcel into a brick barbeque, installed two oversized trailers to store gardening tools and the like, and installed a sand volleyball court and horseshoe pit. Between 1998 and 2001, Galdo planted grass seed on a portion of the Parcel, and he planted a willow tree in 2010. From 2010 through 2014, he built a tree-house deck on the Parcel. Although Galdo regularly obtained permits to work on properties that he owns in connection with his business, he has never obtained any permits to make improvements to the Parcel, did not pay property taxes for the Parcel, and did not provide evidence that he insured the Parcel. Further, it is undisputed that the City never gave Galdo permission to possess the land at issue.

         In the meantime, in 2008, the City entered into an agreement to sell the Parcel to Tower Properties, but that sale was never finalized. On or about February 4, 2013, the City posted a public notice on the Parcel, directing all individuals to remove personal property from the site within thirty days of the notice. Galdo refused to comply. On April 24, 2014, the City filed an ejectment action against Galdo. Galdo responded by filing a counterclaim to quiet title, claiming ownership of the property by adverse possession.[2] In his counterclaim, Galdo contended that he had been in continuous and exclusive possession of the Parcel without the City's consent or authorization since September of 1989. He further asserted that the Parcel had not constituted a public use since 1976. The parties filed preliminary objections, which the trial court overruled.

         The parties subsequently filed cross-motions for summary judgment. In its motion for summary judgment, the City argued, inter alia, that it was immune from Galdo's claim of adverse possession under two alternate theories: (1) it was protected by the Commonwealth's immunity because it obtained title to the property as an agent of the Commonwealth for the purpose of facilitating the construction of I-95; and (2) it was immune because it held the Parcel for a public use as it was acquired through eminent domain and was held for resale purposes.[3] Galdo asserted in his summary judgment motion that he had established title to the Parcel by adverse possession, and the City could not prevail on its ejectment action as a matter of law. He further maintained that the City waived the immunity defense by not pleading it as new matter. The trial court denied the cross-motions for summary judgment on February 24, 2016.

         Following a bench trial on March 24, 2016, the trial court returned a verdict in favor of the City. Galdo subsequently filed post-trial motions, contending, inter alia, that the City was not protected by the Commonwealth's immunity under an agency theory; the City did not have immunity pursuant to a theory of public use; the City waived any immunity defense by failing to raise the defense in new matter; and the coordinate jurisdiction rule was violated when the trial court ultimately ruled in favor of the City after having denied the City's motion for summary judgment based on the same evidence.[4]The trial court denied Galdo's post-trial motions on April 29, 2016. Judgment was subsequently entered on May 27, 2016.

         In its opinion dated June 27, 2016, the trial court explained that it was unnecessary to examine the elements of adverse possession because one "cannot adversely possess a property owned by the City of Philadelphia." Trial Court Opinion, 6/27/2016, at 3. Citing the Commonwealth Court's decision in Lysicki v. Montour School District, 701 A.2d 630, 631-32 (Pa. Cmwlth. 1997), the trial court reasoned that adverse possession could never be established against the Commonwealth or its agents; thus, the City was immune as a Commonwealth agent because it condemned the Parcel "at the behest of the Commonwealth to facilitate the Commonwealth's construction of a highway." Trial Court Opinion at 4. Notably, in addition to finding immunity based on an agency theory, the trial court further held that the City was immune because the Parcel was devoted to a public use, as the City obtained the Parcel through its eminent domain power. Id.

         The trial court also rejected Galdo's claim that the City waived its immunity defense by not including it in new matter pursuant to Rule 1030(a) of the Pennsylvania Rules of Civil Procedure (setting forth the general rule that all affirmative defenses, including immunity from suit, "shall be pleaded in a responsive pleading under the heading 'New Matter'"). The trial court emphasized that because Galdo's adverse possession claim was filed as a counterclaim in his answer to the City's complaint in ejectment, the City did not waive its immunity defense by proffering it in its preliminary objections filed in response to Galdo's counterclaim. Trial Court Opinion at 4 (citing Pa.R.C.P. 1032(a), entitled "Waiver of Defenses. Exceptions. Suggestion of Lack of Subject Matter Jurisdiction or Failure to Join Indispensable Party, " which provides, in relevant part, that "[a] party waives all defenses and objections which are not presented either by preliminary objection, answer or reply . . ."). Finally, the trial court held that the coordinate jurisdiction rule did not apply to this case because the standards applicable to the resolution of a summary judgment motion differ from those applicable to a determination of whether the City was immune from Galdo's adverse possession claim. Trial Court Opinion at 5.

         The Commonwealth Court vacated the trial court's order denying Galdo's post-trial motions, and remanded the matter for trial on Galdo's adverse possession claim. City of Philadelphia v. Galdo, 181 A.3d 1289 (Pa. Cmwlth. 2018) ("Galdo"). The intermediate appellate court viewed the primary issue as "whether a claim of adverse possession can lie against the City, a municipality, when the City's only use of the [Parcel] during the statutory period was to hold the [Parcel] for possible future sale." Id. at 1292. The court began its analysis by acknowledging the well-established proposition that "political subdivisions, such as counties, townships, municipalities, and boroughs, are not immune from claims of adverse possession, although the Commonwealth is." Id. at 1293 (citing Evans v. Erie County, 66 Pa. 222, 228 (Pa. 1870)). It explained, however, that claims alleging title by adverse possession cannot be made against any entity, including a municipality, where the property at issue is devoted to a public use. Galdo, at 1293.

         Rejecting the trial court's conclusion that the City enjoyed the Commonwealth's immunity pursuant to an agency theory, the Commonwealth Court clarified that its prior decision in Lysicki "did not provide political subdivisions with total immunity from claims of adverse possession." Id. at 1294. Rather, the court explained, Lysicki held that property owners adjacent to school district property could not maintain a claim of adverse possession against the school district because school districts are "agents of the Commonwealth to which the legislature has delegated authority in order to fulfill the state's responsibility to provide public education." Id. at 1293 (citing Lysicki, 701 A.2d at 632 (internal citations and emphasis omitted)). The Commonwealth Court emphasized that the school district in Lysicki was immune from the adverse possession claim only because it held the school district property pursuant to a legal responsibility, bestowed upon it by the Commonwealth, to provide public education. Galdo, at 1295. The court found that, here, the City had no legal obligation to hold the Parcel as an agent of the Commonwealth during the prescriptive period, i.e., from 1989 through 2014, before Galdo filed his claim for title by adverse possession. It reasoned that, even assuming that the City condemned the property at the Commonwealth's behest, any agency relationship ceased in the late 1970s, when the construction project was completed. Id. at 1294 n.4.

         Significantly, the Commonwealth Court further discounted the trial court's alternative holding that the City was immune from Galdo's claim of adverse possession because it held the Parcel for a public use. The court agreed that immunity arises when the property in question is devoted to a public use, but concluded there was no public use here. In reaching this conclusion, the Commonwealth Court examined Torch v. Constantino, 323 A.2d 278 (Pa. Super. 1974), which held that the twenty-one-year prescriptive period for adverse possession tolled during the years that the county held the property for tax sale for the nonpayment of taxes. The intermediate appellate court reasoned that, in Torch, it was the legislative mandate, ...


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