Lehman Bros. v. Redevelopment Authority

64 Pa. D. & C.2d 533, 1973 Pa. Dist. & Cnty. Dec. LEXIS 93

• Court: Pennsylvania Court of Common Pleas, Dauphin County
• Decided: August 8, 1973
• Docket: no. 420
• Status: Published

Opinions

SWOPE, P. J.,

This matter is before us on defendant’s exceptions to our opinion and order dated November 30, 1972. Plaintiff, Lehman Bros., Inc., and defendant, Redevelopment Authority of the City of Harrisburg, had entered into a contract on March 26, 1969, whereby defendant was to sell and convey to plaintiff a tract of land in the City of Harrisburg, commonly referred to as the “Walnut Street Project,” for purposes of private redevelopment by plaintiff. Pursuant to the terms of this agreement, plaintiff placed an $80,000 good faith deposit with defendant.

Plaintiff, in its complaint, averred that defendant had failed to make a proper tender of title to the land in question within the time allowed following notice by plaintiff that it was invoking the 30-day “cure period” as provided in the contract. Specifically, plaintiff claimed that defendant had not fulfilled conditions precedent to the conveyance contained in the contract which included the determination of a definite purchase price, approval of the Amended Urban Renewal Plan by the authority, approval of the Amended Urban Renewal Plan by the Department of Housing and Urban Development (HUD), and approval of the conveyance by the Harrisburg City Council. The authority denied that it had made an invalid tender and refused plaintiff’s demand for return of the $80,000 deposit. Whereupon, plaintiff had instituted this action.

The court found that the cure period had commenced to run on February 20, 1970, on which date plaintiff had sent by letter a demand that defendant sign certain amendments to the contract and, in the event that defendant refused, the letter would servé as notice of the invoking of the 30-day cure period. Within the 30-day period, on March 20, 1970, the authority tendered an offer of title which the court nevertheless found to be defective in that it was made following only the “conditional approval” of HUD. HUD’s approval was conditioned upon Harrisburg City Council’s passing a resolution affirming the need for transient housing in the “Walnut Street Project.” The resolution in question was passed on March 24,1970. In our original opinion, we held that the term “approval” in the contract meant the final and unconditional approval from HUD, without which the authority’s tender was defective. HUD’s final approval, after passage of the necessary resolution by Harrisburg City Council, was dated April 9, 1970.

The authority now takes the position that the court incorrectly stated the date upon which the cure period began and that by using the correct date as proposed by the authority, the tender would have been effective before the cure period expired. Because plaintiff had not sent the notice of cure by registered mail, as required by the contract, it is the contention of defendant that the cure period ran not from the date of its mailing, February 20th, but rather from the date of its receipt, February 23, 1970, to March 26, 1970. Defendant authority insists that this time difference is crucial on the theory that on March 24,1970, when the Harrisburg City Council approved the resolution required by HUD, the conditional approval of HUD automatically became final. Therefore, defendant claims that the tender of March 20,1970, did become effective prior to the expiration of the cure period.

While the contention of defendant as to the dates governing the running of the cure period appear meritorious, we fail to see that this would necessitate a change in our original decision inasmuch as we continue of the opinion that until the final approval was actually forthcoming from HUD, on April 9, 1970, the authority could not make a valid tender. We are satisfied that the “conditional approval” of HUD was not such an approval as was anticipated by the parties in the contract, and we hold that the authority could not make a valid tender until the approval of HUD was forthcoming without further qualifications. It would seem, in light of the fact that HUD, in fact, issued its final approval on April 9,1970, that HUD itself did not consider its earlier conditional approval as having been rendered final automatically by the action of the Harrisburg City Council on March 24, 1970, or else it would have been unnecessary for HUD to take any further step to render it so. And yet it did take such a step. Conceivably, keeping in mind the great attention paid to technicalities by most agencies of the Federal government, including, we feel we may safely assume, HUD, even though the action of Harrisburg City Council taken on March 24, 1970, in passing a resolution was intended to satisfy the condition imposed by HUD, such resolution might have been found deficient by HUD and not, in fact, sufficient to satisfy it, whereupon, certainly, HUD’s conditional approval would have continued unsatisfied. The only agency which could properly make such a determination was HUD itself, defendant’s theory to the contrary in this regard notwithstanding. We are firmly of the opinion that the approval of HUD may only be taken as having become final when HUD said it was final. It did, in fact, say so, but not until April 9, 1970, well beyond the expiration of the 30-day cure period, even calculated, as we think the authority properly contends it must be, from February 23, 1970, to March 26, 1970.

Defendant further now contends that section 702 of the contract required that plaintiff give notice not only of the invoking of the 30-day cure period but also of its desire to terminate following the expiration of this 30-day period. Although this matter is raised for the first time in these exceptions, we do not, in any event, believe that this contention has any merit. From a reading of the letter, it is clear that plaintiff intended to terminate the contract if defendant did not execute the proposed amendments to the contract. While the letter was to serve as the notice of the beginning of the 30-day cure period in the event that the amendments were not signed, plaintiff indicated that it did not believe that defendant could tender a valid offer within 30 days and, therefore, plaintiff would consider the contract terminated at the end of the 30-day period. Plaintiff left no doubt as to its planned action and the court is of the opinion that the letter of February 20, 1970, effectively served as notice to defendant of plaintiff’s plan to terminate the contract.

August 27, 1973.

The cautionary exceptions to the court’s order and opinion of November 30, 1972, filed by plaintiff need not be considered in light of the foregoing.

Accordingly, we make the following

ORDER

Now, August 8, 1973, the exceptions of defendant Redevelopment Authority of the City of Harrisburg to our opinion and order dated November 30, 1972, in the above-captioned matter, as well as the exceptions thereto of Lehman Bros., Inc., are hereby overruled each and severally and the order affirmed.