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Grace Land II, LLC v. Bristol Township

United States District Court, E.D. Pennsylvania

September 30, 2019

GRACE LAND II, LLC, et al.
v.
BRISTOL TOWNSHIP, et al.

          MEMORANDUM

          JUAN R. SÁNCHEZ, C.J.

         Plaintiffs Grace Land II, LLC (Grace Land) and Daybreak Treatment Solutions (Daybreak) bring claims against Defendants Bristol Township (the Township), Bristol Township Zoning Hearing Board (ZHB), Craig Bowen, William McCauley, and Thomas Scott (the Individual Defendants), individually and in their official capacities, for constitutional violations pursuant to 42 U.S.C. § 1983, and violations of the Americans with Disabilities Act and the Rehabilitation Act. Plaintiffs’ claims arise from Defendants’ refusal to issue a permit for operation of a medical office for outpatient treatment of persons suffering from alcohol and drug addiction disorders. Defendants move to dismiss Plaintiffs’ Amended Complaint pursuant to Federal Rule of Civil Procedure 12(b)(6). For the reasons set forth below, Defendants’ Motion to Dismiss will be granted in part and denied in part.

         FACTS

         Grace Land and Daybreak are associated entities providing outpatient treatment services for persons suffering from alcohol and drug addiction disorders. Jonathon Goodman is the sole owner of Grace Land and the majority owner of Daybreak. Daybreak is licensed through the Pennsylvania Department of Drug and Alcohol Programs to operate a medical office located in Levittown, Pennsylvania. Grace Land and Daybreak want to offer substance abuse and alcohol rehabilitation services to more persons in the community than is currently offered at their location in Levittown.

         At issue in this dispute is a parcel of land located at 2104 Bath Road, Bristol Township, Pennsylvania (the Property), which Grace Land purchased from Inspire Federal Credit Union (the Bank) on December 18, 2017. Daybreak has a leasehold agreement with Grace Land, as Grace Land’s treatment branch, to operate a medical clinic at the Property. The Property comprises approximately 1.7 acres and is improved with a building containing approximately 9, 758 square feet (the Building) and parking fields with spaces for approximately 59 vehicles. At the time of the purchase, the Property was zoned for commercial use, which permitted the Property to be used as a medical office providing outpatient treatment.

         Prior to Grace Land’s purchase of the Property, however, the Property was zoned for residential use. In November 2015, the Bank approached the Township to change the Property’s zoning to commercial. While the Bank’s zoning application was pending, Defendant Township Council President Craig Bowen told the Bank’s president and CEO, James Merrill, the Township did not have a problem with rezoning the Property as long as the Bank did not intend to sell the Property to a drug and alcohol treatment provider. See Am. Compl. ¶ 29. On July 26, 2016, the Township rezoned the Property to commercial.

         On September 8, 2017, the Bank and Grace Land entered into an agreement of sale for the Property. Grace Land subsequently submitted an application to the Township, requesting a use and occupancy permit to operate an inpatient detoxification facility at the Property (the Detox Application). Within days after the Detox Application was submitted, Defendant Township Manager William McCauley, telephoned Marc Kaplin, Esquire, the attorney representing Grace Land and told Kaplin the Township did not want a drug treatment facility operating on the Property. See Am. Compl. ¶ 34. At a meeting on or about September 18, 2017, Township Council President Bowen, told Grace Land’s real estate broker Jack Kitchen, “the Township had plans to build a water park next to the Property and the Township did not want any drug treatment facility at the Property.” Id. ¶ 35. Township Council President Bowen was concerned addicts would try to use the water park to take showers. Id.

         Township Council President Bowen suggested to Kitchen that Grace Land should purchase vacant school properties the School District[1] was offering for sale in the Township. After this suggestion, an affiliate of Grace Land, Progressive Living Unites & Systems of Pennsylvania (PLUS) submitted a good faith offer to the School District to purchase four of the five elementary schools located in the Township for $1.75 million. This offer was higher than the other offers the School District receive by nearly $800, 000. The Township later countered with its own offer for the schools, matching the offer price, but seeking to acquire five schools rather than four. Plaintiffs allege the Township never intended to “make good” on its offer to buy the schools, but rather they were just “scheming to delay Grace Land from being able to use the Property as a drug and alcohol treatment facility.” Id. ¶ 43.

         On October 11, 2018, the Township denied the Detox Application. Grace Land learned of the denial on October 18, 2018. The following day, Kitchen arranged for Township Council President Bowen to meet with Goodman. At the meeting, Township Council President Bowen told Goodman and Kitchen the Township faulted the Bank for agreeing to sell the Property to Grace Land, when the Bank knew the Township did not want a drug and alcohol treatment facility at the Property under any circumstances. See Id . ¶ 38. Township Council President Bowen also stated the Township would not have approved the change to commercial zoning had it known a drug and alcohol treatment provider would buy the Property. See Id . Plaintiffs agreed to hold their challenge to the denial of the Detox Application in abeyance while they submitted a second application.

         On December 6, 2017, Grace Land submitted a second application to the Township for a permit to operate a medical office at the Property (the Medical Office Application). The medical office would provide rehabilitation outpatient treatment services to persons suffering from alcohol and/or drug addictions. Defendant Township Zoning Officer Thomas Scott, sent a letter stating he could not process the Medical Office Application without first having (a) “information on the certification of the outpatient treatment methods by a board or agency authorized by statute to issue such certification”; (b) the proposed hours of operation; and (c) the plan for off-street parking. Id. Ex. C, at 2.

         In a letter to Zoning Officer Scott, Grace Land explained Daybreak is precluded from obtaining a state license to operate a treatment center at the Property until the Township issues the permit allowing for that use. Grace Land further explained the medical office would be located in 4, 407 square feet of the Building, the same area which the Bank operated its retail branch and stated it would comply with the Township’s parking requirements under § 205-120(7) of the Zoning Ordinance because only a total of 37 parking spaces would be needed. See Id . Ex. D.

         Zoning Officer Scott sent a second letter, requesting more information, including (1) a copy of the medical director’s license, and (2) Grace Land’s plans for using the remaining vacant portions of the Building. See Id . Ex. F, at 1. Grace Land complied by providing a copy of the medical director’s license and confirmed Grace Land had no current plans to utilize the rest of the Building. Grace Land stated it would apply to the Township for a permit when it decided on a plan for using the rest of the Building. See Id . Ex. G, at 1-2.

         On April 10, 2018, the Township denied the Medical Office Application and claimed it did not approve a split or separate use of a portion of the Building and “assumed for purposes of this determination that the entire building is proposed to be utilized for medical offices.” Id. Ex. H, at 1. Based on this allegedly false premise, the Township denied the Medical Office Application for not meeting the Township’s parking requirement. Id. at 1-2. The Township’s requirement for Grace Land to reserve additional parking was contradicted by its allowance for the Bank to use the entire Building without additional parking although financial establishments are subject to the same parking requirements as the medical offices Grace Land proposed. See Id . ¶ 55.

         On March 16, 2018, Grace Land appealed the Township’s denial of the Medical Office Application to the Defendant ZHB. At the May 14, 2018, ZHB hearing, Stacy Hill, an executive officer of Grace Land and Daybreak, testified to Grace Land’s intent to operate the medical office solely in the 4, 407 square foot portion of the Building and Grace Land would apply for a permit to use the remainder of the Building once it had a plan for that space. The Township did not offer any evidence to contradict Hill’s sworn testimony. Hill further explained Daybreak utilizes its own vans to transport patients to and from treatment and therefore the patients will not be operating vehicles to and from the Property.

         At the ZHB hearing, Township officials and residents opposed the proposed treatment center. At one point, the ZHB’s Solicitor Ken Federman, voiced his skepticism over the Township’s claim against Grace Land using only part of the Building. Specifically, he stated, “it’s not really about the parking, because theoretically the board can do what the board wants to do, right?” Id. ¶ 60.

         After hearing the Township and residents’ opposition, the ZHB members unanimously, and without deliberation, voted to reject Grace Land’s appeal. In its written June 28, 2018, decision, the ZHB acknowledged the Property is zoned C-Commercial and “such zoning designation does allow[ ] for an outpatient medical office use pursuant to Section 205-36 and 205-16C(2) of the Zoning Ordinance.” Id. Ex. I, at 4. Nonetheless, the ZHB denied Grace Land’s permit, stating (1) the request for a permit constituted land development; (2) Grace Land could not satisfy the Township’s parking requirements based upon the “assumption” that Grace Land would be using the entire Building; and (3) Grace Land was not entitled to occupy only a portion of the Building. See Id . at 4-5. Plaintiffs allege these reasons were merely pretext.

         To address the Township’s pretextual concern with parking, on April 6, 2018, Grace Land applied for a building permit to add parking spaces within the Property’s existing impervious surface area (the Building Permit). The Township denied the Building Permit, stating the proposed work constituted land development. See Id . Ex. J, at 2. On May 31, 2018, Grace Land appealed the Township’s denial to the ZHB. At the July 9, 2018, ZHB hearing, the Township and the residents again opposed Grace Land’s Building Permit. At the conclusion of the residents’ comments, without deliberation, the ZHB unanimously voted to reject Grace ...


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