Cowell v. Palmer Township

263 F.3d 286
CourtCourt of Appeals for the Third Circuit
DecidedAugust 27, 2001
Docket00-1075
StatusUnknown
Cited by10 cases

This text of 263 F.3d 286 (Cowell v. Palmer Township) is published on Counsel Stack Legal Research, covering Court of Appeals for the Third Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Cowell v. Palmer Township, 263 F.3d 286 (3d Cir. 2001).

Opinion

OPINION OF THE COURT

SLOVITER, Circuit Judge.

Eileen Cowell, Richard Cowell, Sylvester Pany, and Eastgate Land & Development Corp. (collectively “plaintiffs”) brought takings and due process claims pursuant to 42 U.S.C. § 1983, as well as various state law claims, against Palmer Township, various township officials, and the Township’s law firm (collectively “defendants”). The basis for these claims was the defendants’ alleged interference in the plaintiffs’ land development plans, specifically the imposition of two municipal liens on the plaintiffs’ properties in 1992 and 1993. The District Court dismissed the federal law claims under Fed.R.Civ.P. 12(b)(6), declined to allow plaintiffs leave to amend their complaint, and further dismissed the state law claims without prejudice. We now review the plaintiffs’ appeal.

*288 I.

FACTS AND PROCEDURAL HISTORY

Eileen Cowell, Richard Cowell, and Sylvester Pany were owners of Eastgate Land & Development Corp. (“Eastgate”), a Pennsylvania ' real estate development company that owned a 23-acre parcel of land in Palmer Township, Pennsylvania known as the Palmer Business Park. In 1987, the plaintiffs began a three phase project to improve the land for development. This project was subject to the local land use codes of Palmer Township. Defendants Robert Lammi, Jeffrey Young, Robert Elliot, Robert Wasser, and H. Robert Daws were on the Township’s Board of Supervisors at all relevant times. Défen-dant Virginia S. Riekert was also on the board and served as the Treasurer of Palmer Township. Defendant Theodore Borek was the Township’s Director of Planning. Defendant Donald Himmelreich was the Solicitor for Palmer Township, and his law firm, Hemstreet, Himmelreich & Nitchkey, served as counsel to the Township.

Appellants planned to sell lots to Mc-Donalds and Kentucky Fried Chicken for the development of restaurants, as well as to build a shopping mall to be called East-gate Mall. Before contracts could be signed to finalize these plans, the Township allegedly changed the zoning classification of these lots from commercial use to “planned office buildings,” thereby preventing the development of these commercial enterprises. Eastgate sued to prevent these zoning changes from taking effect. Plaintiffs allege, and defendants do not deny, that the parties reached a settlement in which Eastgate agreed to cease its plans to build the Eastgate Mall and the Township agreed to approve all projects that had already been proposed for Phases I, II, and 11(a) at Palmer Business Park as well as assume responsibility for certain municipal improvements. But when East-gate proceeded with the development of Phase II, the Township allegedly imposed a building moratorium in July 1987 which prohibited any and all commercial development of the. property and caused severe financial hardship for Eastgate.

It is the allegations of the events occurring after 1990 that are most relevant to this appeal. Beginning in 1990, the plaintiffs worked to improve Lots 12 through 17 of Palmer Business Park in order to sell them as buildable lots. On October 22, 1992, the Township imposed a $25,000 lien on Lots 14 and 15, naming Richard Cowell and Nicholas J. Pugliese as owners of those lots. The lien was filed “on the basis of anticipated non-payment of the installation of certain municipal improvements.” App. at 206.

The Township explains that the lien was imposed pursuant to an agreement that Cowell and Pugliese would be responsible for paying for paving work on a subdivision called Milford Street, with the Township serving as the guarantor. The Township contends that when neither Cowell nor Pugliese paid the paving contractor on time, the Township paid the bill and then imposed the lien. The plaintiffs respond that Richard Cowell had sold his interest in Milford Street to Pugliese in 1991 and should not have been responsible for any municipal improvements. More important, they argue that the lien was unlawful under the Municipal Lien Code, 53 Pa. Cons. Stat. Ann. §§ 7101 et seq., because no improvements were made on Lots 14 and 15 for which a lien could be legally placed. They further argue that the Township imposed the lien to retaliate against them for successfully challenging the Township’s zoning changes in 1987 and to cause financial harm to the plaintiffs.

On March 9, 1993, the Township imposed a second municipal lien in the *289 amount of $250,000 on the subdivisions of Palmer Business Park owned by Eastgate. This lien was filed “for present and future unfunded escrow review accounts and unfunded escrow accounts for municipal improvements.” App. at 209. On March 24, 1993, Himmelreich sent a letter to East-gate on behalf of the Township explaining that the lien was intended to serve as a security for (1) the anticipated failure by Eastgate to complete municipal improvements and (2) the unlawful depletion of funds held in an escrow account for the Township’s benefit, accomplished by Richard and Eileen Cowell forging signatures of various township officials in order to obtain the release of various funds held in escrow.

The Cowells had indeed pled guilty to forgery and theft by receipt of stolen property. However, the plaintiffs contend that the reference to the Cowells’ criminal conduct was a smokescreen and that the $250,000 lien was imposed for the municipal improvements only. They further allege that the Township refused to remove this lien even after it was informed that the plaintiffs had sufficient funds to pay for the municipal improvements.

In April 1994, Eastgate filed a Chapter 11 bankruptcy petition. As part of their Plan of Reorganization, Eastgate agreed to pay $30,000 to the Township in exchange for a discharge of the $250,000 lien. Eileen Cowell also filed for personal bankruptcy. During Eileen Cowell’s bankruptcy proceeding, the bankruptcy judge lifted and expunged the $25,000 lien on July 13, 1998, and thereafter noted in the amended order that “a municipal improvement lien cannot be filed against a property not so improved.” App. at 222-223. 1 Specifically, the bankruptcy judge found that Lot 14 was not affected or benefitted by the improvements done on Milford Street, which was one mile away and in a separate development.

On June 25, 1999, Eileen Cowell, Richard Cowell, Sylvester Pany, and Eastgate filed the present suit against Palmer Township, various township officials, and the Township’s law firm. The complaint alleges that the imposition of the two municipal liens violated the Takings Clause of the Fifth Amendment and the Due Process Clause of the Fourteenth Amendment, as well as various state laws.

The defendants moved to dismiss all of the claims for failure to state a claim upon which relief could be granted pursuant to Fed R. Civ. P. 12(b)(6). The defendants asserted, inter alia, that the actions alleged did not amount to a taking and that the takings claim was not yet ripe. The defendants further asserted that the due process claim was barred by the statute of limitations.

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Eileen Cowell v. Palmer Township
263 F.3d 286 (Third Circuit, 2001)

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Bluebook (online)
263 F.3d 286, Counsel Stack Legal Research, https://law.counselstack.com/opinion/cowell-v-palmer-township-ca3-2001.