IN THE COMMONWEALTH COURT OF PENNSYLVANIA
Associated Property Management, :
Inc., d/b/a Associated Realty :
Property Management, Mark Bigatel :
and Student Housing Association :
of Pennsylvania, :
:
Petitioners :
:
v. : No. 280 M.D. 2017
: Argued: December 4, 2017
Commonwealth of Pennsylvania, :
Office of Attorney General, :
:
Respondent :
BEFORE: HONORABLE PATRICIA A. McCULLOUGH, Judge
HONORABLE MICHAEL H. WOJCIK, Judge
HONORABLE BONNIE BRIGANCE LEADBETTER, Senior Judge
OPINION NOT REPORTED
MEMORANDUM OPINION
BY JUDGE WOJCIK FILED: May 29, 2018
Before the Court are the preliminary objections of the Commonwealth
of Pennsylvania, Office of Attorney General (OAG) to the petition for review filed
by Associated Property Management, Inc. d/b/a Associated Realty Property
Management (Associated), Mark Bigatel, and the Student Housing Association of
Pennsylvania (SHA) (collectively, Petitioners), seeking declaratory judgment and a
permanent injunction. We sustain the preliminary objections and dismiss the
petition for review.
On June 20, 2017, Petitioners filed a petition for review in our original
jurisdiction seeking declaratory relief and a permanent injunction. Associated is a
property management company that manages rental housing for various tenants,
including college students, in Pennsylvania. Mark Bigatel serves as the president of
SHA, which is a non-profit corporation that maintains an office in Harrisburg, but
provides a forum for Pennsylvania college and university student landlords to
exchange ideas and information and to advocate for their common interests.
On or about February 15, 2015, OAG served a subpoena on Associated
seeking various documents relating to the names and contact information of tenants,
security deposit information, sample leases, marketing materials, and lawsuits that
have been filed against it. Associated complied with OAG’s request and provided
the aforementioned information, including a sample lease, its rental Rules and
Regulations, and its move-out instructions. Petitioners assert that OAG, acting
through its Bureau of Consumer Protection, threatened to file suit if Petitioners did
not execute an Assurance of Voluntary Compliance (Assurance). The proposed
Assurance alleges that Petitioners violated the Unfair Trade Practices and Consumer
2
Protection Law (Consumer Protection Law)1 and/or the Landlord and Tenant Act of
1951 (Landlord and Tenant Act)2 in the following respects:
1. Providing insufficient notice to tenants of damages and
costs;
2. Assessing administrative fees that were in violation of
the law;
3. Disseminating confusing and misleading rules and
regulations;
4. Assessing fines for violations of local ordinances;
5. Using confusing and misleading terms in the lease;
6. Using terms that governed the landlord’s right to enter
the premises that were inconsistent with the law;
1
Act of December 17, 1968, P.L. 1224, as amended, 73 P.S. §§201-1 – 201-9.3.
Specifically, Section 5 of the Consumer Protection Law states:
In the administration of this act, [OAG] may accept an assurance
of voluntary compliance with respect to any method, act or practice
deemed to be violative of the act from any person who has engaged
or was about to engage in such method, act or practice. Such
assurance may include a stipulation for voluntary payment by the
alleged violator providing for the restitution by the alleged violator
to consumers, of money, property or other things received from
them in connection with a violation of this act. Any such assurance
shall be in writing and be filed with the court. Such assurance of
voluntary compliance shall not be considered an admission of
violation for any purpose. Matters thus closed may at any time be
reopened by [OAG] for further proceedings in the public interest,
pursuant to section 4.
73 P.S. §201-5.
2
Act of April 6, 1951, P.L. 69, as amended, 68 P.S. §§250.101 – 250.602.
3
7. Limiting the tenant’s right to purchase goods and
services; and
8. Reserving the right to change the Rules and
Regulations.
Petition for Review at ¶21.
The proposed Assurance states that the above deficiencies cause a
likelihood of confusion or misunderstanding as to the source, sponsorship, approval,
or certification of goods. The Assurance would: (1) require Petitioners to comply
with the Consumer Protection Law and the Landlord and Tenant Act; (2) prohibit
the collection of administrative fees associated with tenants’ breaches of the lease
agreement; (3) prohibit the joint inspection requirement; (4) require advance notice
of landlord entry for the purpose of maintenance; (5) prohibit the collection of
attorney’s fees unless the same would be awarded by a court; and (6) require
payment of $57,824.32 to OAG along with payment of the costs of investigation.
The parties have attempted to, but have not resolved OAG’s
complaints. Petitioners believe that OAG’s allegations that serve as the basis of the
Assurance are grounded in an incorrect interpretation of the Consumer Protection
Law and the Landlord and Tenant Act and an incorrect perception of Petitioners’
business practices. Petitioners argue that OAG’s threats are improper and
detrimental to the well-being of law-abiding landlords in the Commonwealth.
Petitioners contend that OAG arbitrarily and capriciously seeks to impose fines
without a basis in fact or law.
Petitioners also contend that they and the other individual landlords
must hire counsel to defend against OAG’s allegations and the subpoenas that have
been issued. They contend that hiring counsel and interposing a defense is costly
and that similarly situated landlords may be compelled to settle with OAG to avoid
4
these costs. As a result, Petitioners seek relief by requesting declaratory judgment
interpreting the Consumer Protection Law and the Landlord and Tenant Act and a
permanent injunction to enjoin OAG’s arbitrary and capricious enforcement of those
statutes.
Respondent OAG concedes that it initiated an investigation of
Petitioners for violations of the Consumer Protection Law and the Landlord and
Tenant Act. As a result, OAG has been in discussions with Petitioners to resolve the
matter. However, OAG has filed preliminary objections to the petition for review.3
OAG first asserts that SHA lacks standing because there is no allegation
that it is investigating SHA. Although there is a blanket averment that OAG’s
investigation may lead to enforcement actions against SHA’s members, OAG argues
that a declaratory judgment cannot be obtained in anticipation of events that have
not and may never occur and can only be obtained when there is an actual case or
controversy. As a result, OAG contends that SHA should be dismissed as a party
pursuant to Pa. R.C.P. No. 1028(a)(4).4
3
As this Court has explained:
In reviewing preliminary objections, all material facts averred in the
complaint, and all reasonable inferences that can be drawn from
them, are admitted as true. However, a court need not accept as true
conclusions of law, unwarranted inferences, argumentative
allegations, or expressions of opinion. “Preliminary objections
should be sustained only in cases that are clear and free from doubt.”
Seitel Data, Ltd. v. Center Township, 92 A.3d 851, 859 (Pa. Cmwlth. 2014), appeal dismissed, 111
A.3d 170 (Pa. 2015) (citations omitted).
4
Rule 1028(a)(4) states, “Preliminary objections may be filed by any party to any pleading
and are limited to the following grounds: . . . legal insufficiency of a pleading (demurrer)[.]”
5
Second, OAG argues that Petitioners do not specify which portions of
the Consumer Protection Law and the Landlord and Tenant Act that the investigation
violates, so this Court should dismiss the petition for review pursuant to Pa. R.C.P.
No. 1028(a)(3)5 due to lack of specificity as required by Pa. R.C.P. No. 1019(a).6
OAG contends that Petitioners’ admission that they are seeking declaratory relief
that goes beyond the terms of any particular lease seeks an advisory opinion.
Third, OAG argues that a permanent injunction is a remedy, and not a
cause of action that can only be issued in response to a legal wrong. Petitioners seek
to enjoin OAG from prosecuting them or from recovering costs in the absence of
formal regulations that put them on notice of OAG’s interpretation of the law. As a
result, OAG requests that we sustain the preliminary objections and dismiss the
petition for review seeking a permanent injunction.
On review, it is clear that Petitioners are not entitled to the requested
declaratory and injunctive relief. “‘Pennsylvania is a fact-pleading jurisdiction. A
complaint must therefore not only give the defendant notice of what the plaintiffs’
claim is and the grounds upon which it rests, but it must also formulate the issues by
summarizing those facts essential to support the claim.’” Unified Sportsmen of
Pennsylvania v. Pennsylvania Game Commission, 950 A.2d 1120, 1134 (Pa.
Cmwlth. 2008) (citations omitted).
In the petition for review, Petitioners allege that OAG has erroneously
interpreted the Consumer Protection Law and the Landlord and Tenant Act in
pursuing its unfounded complaints about Associated’s and Bigatel’s rental practices.
5
Rule 1028(a)(3) states, “Preliminary objections may be filed by any party to any pleading
and are limited to the following grounds: . . . insufficient specificity in a pleading[.]”
6
Rule 1019(a) states, “The material facts on which a cause of action . . . is based shall be
stated in a concise and summary form.”
6
Petition for Review at ¶¶26, 27. Although they request a declaration that their leases
do not violate the relevant law, Petitioners do not identify any section of any actual
lease or the relevant sections of the Consumer Protection Law or the Landlord and
Tenant Act at issue in this matter.7 Instead, Petitioners assert their own
interpretations of the terms in a “specimen” lease and conclude that they do not
violate those statutes. Petition for Review at ¶¶29, 36. Petitioners claim that these
“kinds of provisions” satisfy the pleading requirements because their challenge is
“stated more broadly than to a specific lease in itself” and that they are seeking a
“declaration that goes beyond the terms of any given lease so that the matters may
be settled generally and not in piecemeal litigation involving different parties and
7
As this Court has explained:
Pa. R.C.P. No. 1028(a)(3) permits a preliminary objection
based on insufficient specificity of a pleading. To determine if a
pleading is sufficiently specific, a court must ascertain whether the
facts alleged are sufficiently specific to enable a defendant to
prepare his defense. Preliminary objections in the nature of a motion
for a more specific pleading raise the sole question of whether the
pleading is sufficiently clear to enable the defendant to prepare a
defense. Further, in pleading its case, the complaint need not cite
evidence but only those facts necessary for the defendant to prepare
a defense.
Additionally, in determining whether a particular paragraph
in a complaint is stated with the necessary specificity, such
paragraph must be read in context with all the allegations in the
complaint. Only then can a court determine whether the defendant
is put on adequate notice of the claim against which it must defend.
Unified Sportsmen of Pennsylvania, 950 A.2d at 1134-35 (citations omitted).
7
different leases.” Answer to Preliminary Objections at ¶¶24, 25.8 Thus, Petitioners
are not asking this Court to declare that the provisions of an executed lease are not
unlawful under the Consumer Protection Law or the Landlord and Tenant Act or that
OAG may not pursue an enforcement action under those statutes based on any
particular lease.
As the Supreme Court has explained:
Only where there is a real controversy may a party
obtain a declaratory judgment. . . . A declaratory judgment
must not be employed to determine rights in anticipation
of events which may never occur or for consideration of
moot cases or as a medium for the rendition of an advisory
opinion which may prove to be purely academic.
Gulnac by Gulnac v. South Butler School District, 587 A.2d 699, 701 (Pa. 1991)
(citations omitted). Moreover, “[i]t is well settled that ‘[i]n Pennsylvania,
declaratory relief is unavailable when it is sought merely in anticipation of an action
at law by another party.’ Similarly, as here, where a declaratory judgment action
has been filed in anticipation of an administrative enforcement proceeding, a court
should decline to exercise jurisdiction.” GGNSC Clarion LP v. Kane, 131 A.3d
1062, 1068-69 (Pa. Cmwlth.), aff’d, 152 A.3d 983 (Pa. 2016). Further, “[i]njunctive
relief is not available to eliminate a possible remote future injury or invasion of
rights.” Jamal v. Department of Corrections, 549 A.2d 1369, 1371 (Pa. Cmwlth.
1988), appeal denied, 554 A.2d 512 (Pa. 1989) (citations omitted).
As a result, we will not grant the requested declaratory and injunctive
relief in anticipation of any OAG enforcement proceeding. Petitioners can and may
raise any claims regarding OAG’s purported misapplication of the Consumer
8
Petitioners’ assertions “in [their] answer to the preliminary objections is clearly binding
and cannot be ignored.” University of Dominica v. Pennsylvania College of Podiatric Medicine,
446 A.2d 1339, 1341 (Pa. Super. 1982) (citation omitted).
8
Protection Law or the Landlord and Tenant Act in any enforcement actions that may
be filed against them. Petitioners can refuse to execute the Assurance without
liability, OAG may or may not proceed under the Consumer Protection Law, and
Petitioners may raise any or all of these claims in any future enforcement
proceedings, if any occur.9
Accordingly, the preliminary objections are sustained, and the petition
for review is dismissed.
MICHAEL H. WOJCIK, Judge
9
Petitioners’ reliance on Arsenal Coal Company v. Department of Environmental
Resources, 477 A.2d 1333 (Pa. 1983), and its progeny is misplaced. In those pre-enforcement
cases, the statutory authority of the governmental entity to act in the first instance was at issue,
which is not present in the instant appeal. See, e.g., Pennsylvania Dental Hygienists’ Association,
Inc. v. State Board of Dentistry, 672 A.2d 414, 417 (Pa. Cmwlth. 1996) (“[C]osts incurred to
challenge the regulations in a case-by-case post-enforcement proceeding are not the type of direct
and immediate harm justifying this Court’s exercise of its original jurisdiction.”) (citation omitted).
9
IN THE COMMONWEALTH COURT OF PENNSYLVANIA
Associated Property Management, :
Inc., d/b/a Associated Realty :
Property Management, Mark Bigatel :
and Student Housing Association :
of Pennsylvania, :
:
Petitioners :
:
v. : No. 280 M.D. 2017
:
Commonwealth of Pennsylvania, :
Office of Attorney General, :
:
Respondent :
ORDER
AND NOW, this 29th day of May, 2018, the preliminary objections of
the Office of Attorney General are SUSTAINED, and the petition for review is
DISMISSED.
__________________________________
MICHAEL H. WOJCIK, Judge
Associated Property Mgmt., Inc. v. PA OAG
Combined Opinion