THE CARDINAL RULE
APPEALS COURT TOSSES DEVELOPER’S $8M CLAIM AGAINST MARPLE>>
The Pennsylvania Commonwealth Court has upheld dismissal of a Jenkintown developer’s complaint seeking more than $8 million from Marple Township over a failed bid to develop the former Don Guanella Village in 2016.
“Although we understand why Cardinal Crossing believes it was wronged, there is no error in Common Pleas’ conclusion that it is certain under the law that no recovery is possible,” a three-judge panel of the Commonwealth Court found.
Developer Bruce Goodman, filing as Cardinal Crossing GP and Cardinal Crossing Realty Associates, alleged a single count for promissory estoppel against the township in a complaint filed in the Delaware County Common Pleas Court last year.
He claimed Marple officials overseeing the mixeduse Cardinal Crossing development induced him to make certain investments with promises that necessary zoning amendments would be approved at the appropriate time.
But Delaware County Common Pleas Court Judge Chad F. Kenney found Goodman could not hope to succeed because reliance on any individual’s alleged statements or promises cannot be bootstrapped to any legally binding promises made by a municipality – the only legal authority that can actually implement zoning changes.
The developer struck a deal with the Archdiocese of Philadelphia in 2015 to buy the plot for $47 million. The agreement required a $5 million non-refundable deposit and was originally set to close March 1, 2016. That was later extended to June 30.
Goodman filed applications and supporting documents to rezone the tract for a massive missed-use office/commercial and residential complex, but was ultimately defeated when Marple commissioners said at a May meeting that they would not approve changing the ordinances.
Cardinal Crossing claimed that move was contrary to everything commissioners had indicated during approximately two years of meetings, where no negative viewpoint on the development had ever been uttered.
The agreement of sale expired July 1 and the archdiocese decided not to further extend the agreement. Cardinal Crossing was looking recoup the $5 million deposit and more than $2 million it claims to have laid out in other development expenses.
But Marple Solicitor Hugh Donaghue argued in preliminary objections that the complaint failed to identify any actual promises made by the township through its commissioners or any “official action” taken by the township that Goodman could have relied upon in continuing to make expenditures.
Kenney agreed that any party to the highly complex and technical realm of land development deals could not reasonably expect any promises made by officials to be construed as legally binding “township” promises and that Goodman could not hope to succeed with his claim.
Even assuming Goodman not aware of that law, Kenney said, such ignorance would not be justifiable even for the average, non-sophisticated citizen making an application.
“Otherwise, every disappointed zoning or land use applicant would be able to sue the municipality in a separate common pleas action to recover damages and costs on the allegation they were induced to spend money to continue to proceed with the process based on alleged ‘promises’ made to them … by a variety of township solicitors, representative and committee people,” the opinion said.
Goodman argued on appeal that whether Cardinal Crossing was justified in relying on the alleged assurances of Marple officials was a question of fact that should not have been decided at the preliminary objection stage.
The appeal also argued that Goodman was justified in relying on the representations of the Development Committee because it was designated as the board’s agent in developing the property.
The township responded that the process of enacting and amending a zoning ordinance is a legislative function of a municipality’s governing body. Goodman had not identified anything that could be viewed as a contract-like promise by the township to enact the proposed amendment upon which he relied and there was therefore no recovery available by law.
The Commonwealth Court agreed, noting that even Goodman had said he was aware of community opposition to the development and expressed hesitation at expending funds prior to the board enacting the required zoning amendments.
“It is well settled that, as a purely legislative act, a governing body’s consideration of an application to rezone is ‘within the complete discretion of the local governing body,’” the opinion states. “… As this could only be performed through an official action of a majority of board during a public meeting, we agree with common pleas that Cardinal Crossing’s reliance on unofficial statements and representations as being legally binding promises of (the) township was not reasonable or justified.”
“Although we understand why Cardinal Crossing believes it was wronged, there is no error in Common Pleas’ conclusion that it is certain under the law that no recovery is possible.” — A three-judge panel of the Commonwealth Court