Victoria Gardens Condominium Ass'n. v. Kennett Tp. of Chester

23 A.3d 1098, 2011 WL 1499666
CourtCommonwealth Court of Pennsylvania
DecidedApril 21, 2011
Docket1652 C.D. 2009
StatusPublished
Cited by10 cases

This text of 23 A.3d 1098 (Victoria Gardens Condominium Ass'n. v. Kennett Tp. of Chester) is published on Counsel Stack Legal Research, covering Commonwealth Court of Pennsylvania primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Victoria Gardens Condominium Ass'n. v. Kennett Tp. of Chester, 23 A.3d 1098, 2011 WL 1499666 (Pa. Ct. App. 2011).

Opinion

OPINION BY

Senior Judge KELLEY.

Victoria Gardens Condominium Association (Association) appeals the order of the Court of Common Pleas of Chester County (trial court) sustaining the preliminary objections of Kennett Township of Chester County 1 , Allan Falcoff, Mike Elling and Robert Hammaker (collectively, “Township *1100 Defendants”) 2 , and dismissing Counts I and V of the Association’s Complaint. 3 We affirm.

The Association is a condominium association composed of unit owners in the Victoria Gardens development in the Township. Victoria Gardens, L.P. (hereinafter, “Developer”), is the record owner of the streets, clubhouse, common areas and certain common elements in the development. On July 26, 2001, the Township approved subdivision plans submitted by Developer for the development pursuant to the provisions of the Township’s Subdivision and Land Development Ordinance (Ordinance). 4

On August 7, 2001, Developer and the Township executed a Road and Improvement Construction Agreement (Construction Agreement) under which Developer agreed to complete construction of the roads and improvements in the development in three phases. In Phase I of construction, Developer agreed to complete construction of the roads within three years. In Phase II, Developer agreed to complete construction of the public improvements, facilities and common amenities within three years. In Phase III of construction, Developer agreed to complete construction of the control measures relating to soil erosion and sedimentation within three years. The Association was not a party to the Construction Agreement.

The Construction Agreement also provided for financial security with respect to the construction in the development as a condition precedent to the agreement. The security was set at 110% of the cost of the construction in Phases I and II, was to be posted with a bank, and could take the form of an irrevocable letter of credit. Once the Phase I and II work was reduced to an amount equal to 110% of the cost of Phase III, no further reduction in the escrow was permitted until the Phase III work commenced. The agreement also provided that, should Developer fail to complete the construction within three years, the amount of security would be automatically increased to the higher of either 10% for each additional year, or an amount 110% of the cost of- completing construction. In addition, if Developer did not automatically increase the security at the end of the three year period, Developer was in default and the Township could revoke all building permits and refuse to grant new permits. Further, if Developer failed to complete construction, the Township could withdraw the funds necessary for completion, and Developer would reimburse the Township for any funds in ex *1101 cess of the escrow funds that were needed for completion. 5 , 6

In light of the Construction Agreement, on August 7, 2001, Developer and the *1102 Township also entered into a Road and Improvement Construction Irrevocable Letter of Credit Agreement (Letter of Credit Agreement) with First Financial Bank (Bank). Under the Letter of Credit Agreement, a letter of credit 7 drawn on the Bank was issued in the amount of $1,745,392.00, which represented 110% of the cost of completing Phases I and II of the construction. Again, the Association was not a party to the Letter of Credit Agreement.

Starting in 2004, the Association repeatedly notified Developer and the Township that the improvements in the development were not completed or were severely deteriorating. In addition, Developer failed to furnish additional security as required by the Construction Agreement. Developer advised the Township and the Association that it has no funds or assets to repair and complete construction of the roads and improvements. The cost to complete construction and repair of the roads and improvements in the development according to the approved subdivision plans totals $665,802.00; however, only $202,000.00 remains in the escrow account.

As a result, on February 17, 2009, the Association filed the instant complaint in the trial court. In Count I of the complaint, sounding in mandamus, the Association sought to compel the Township to complete all of the roads and improvements in the development according to the approved subdivision plans. Likewise, in Count V of the complaint, sounding in specific performance, the Association sought to compel the Township to complete all of the roads and improvements in the development according to the approved subdivision plans. In support of this claim, the Association cited Safford v. Board of Commissioners, Annville Township, 35 Pa.Cmwlth. 631, 387 A.2d 177 (1978) and Kennedy v. Lehman Township, 74 Pa.Cmwlth. 377, 459 A.2d 921 (1983).

On March 12, 2009, the Township Defendants filed preliminary objections to Counts I and V of the Complaint. On March 25, 2009, the Association filed a response to the preliminary objections. Each of the parties filed a brief in support of their respective positions.

On August 7, 2009, the trial court issued an order sustaining the Township Defendants’ preliminary objections, and dismissing the claims against them sounding in mandamus and specific performance. 8 *1103 The Association then filed the instant appeal of the trial court’s order. 9 , 10

In this appeal, the Association claims: (1) the trial court erred in failing to accept as true all well-pleaded facts set forth in the complaint as well as all inferences fairly deducible therefrom; (2) the trial court erred in sustaining the preliminary objections because the Association and it members are intended third party beneficiaries of the Construction Agreement and Letter of Credit Agreement; (3) the trial court erred in sustaining the preliminary objections because equity requires that the Township provide for the completion of the roads and improvements; (4) the trial court erred in sustaining the preliminary objections because the actions of the Township’s Board of Supervisors constituted willful misconduct; and (5) the trial court erred in sustaining the preliminary objections because the Association has pleaded a valid cause of action in mandamus.

The Association first claims that the trial court erred in failing to accept as true all well-pleaded facts set forth in the complaint as well as all inferences fairly deducible therefrom. More specifically, the Association contends that the trial court erred in failing to accept as true the *1104 averment in the complaint that it was an intended third party beneficiary of the Construction Agreement.

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Bluebook (online)
23 A.3d 1098, 2011 WL 1499666, Counsel Stack Legal Research, https://law.counselstack.com/opinion/victoria-gardens-condominium-assn-v-kennett-tp-of-chester-pacommwct-2011.