IN THE COMMONWEALTH COURT OF PENNSYLVANIA
Charles W. Walsh, III, Laura Blau and :
Philadelphia Community Development :
Coalition :
:
v. : No. 862 C.D. 2018
: Submitted: August 16, 2019
Teresa F. Isabella and 325 S. 18th :
Street, LLC :
:
Appeal of: 325 S. 18th Street, LLC :
BEFORE: HONORABLE P. KEVIN BROBSON, Judge
HONORABLE CHRISTINE FIZZANO CANNON, Judge
HONORABLE BONNIE BRIGANCE LEADBETTER, Senior Judge
OPINION NOT REPORTED
MEMORANDUM OPINION
BY JUDGE BROBSON FILED: April 24, 2020
Appellant 325 S. 18th Street, LLC (18th Street) appeals from an order of the
Court of Common Pleas of Philadelphia County (trial court), dated May 23, 2018
(docketed May 29, 2018), which denied 18th Street’s petition to remove the
Philadelphia Community Development Coalition (Coalition) as conservator of
property located at 325 S. 18th Street, Philadelphia, Pennsylvania (the Property). 1
We affirm.
1
18th Street appealed pursuant to Pennsylvania Rule of Appellate Procedure 311(a)(2),
which provides:
The relevant procedural history of this case is as follows. On June 3, 2016,
the Coalition and two individuals, Charles W. Walsh, III (Walsh) and Laura Blau
(Blau), filed a Petition for Appointment of a Conservator (Act 135 Petition) pursuant
to the Abandoned and Blighted Property Conservatorship Act (Act or Act 135), Act
of November 26, 2008, P.L. 1672, as amended, 68 P.S. §§ 1101-1111, seeking to
appoint the Coalition as conservator of the Property due to its severely blighted
condition.2 At the time the Act 135 Petition was filed, Teresa F. Isabella (Isabella)
owned the Property and was named the sole respondent in the conservatorship
action. On April 28, 2017, while the Act 135 Petition was pending, 18th Street
allegedly purchased the Property from Isabella for $1,000,000. On May 2, 2017, the
trial court held a hearing on the Act 135 Petition to determine whether the statutory
conditions existed for appointment of a conservator. As the purported owner of the
Property, the trial court granted 18th Street leave to intervene as a party-in-interest
and to participate fully at the May 2, 2017 hearing. Following the hearing, by order
dated May 15, 2017 (and docketed May 17, 2017), the trial court granted the Act 135
Petition and appointed the Coalition conservator of the Property (Appointment
(a) General Rule. – An appeal may be taken as of right and without
reference to Pa. R.A.P. 341(c) from:
....
(2) Attachments, etc. – An order confirming, modifying, dissolving,
or refusing to confirm, modify or dissolve an attachment,
custodianship, receivership, or similar matter affecting the
possession or control of property, except for orders pursuant to
23 Pa. C.S. §§ 3323(f), 3505(a).
2
Walsh resides and operates a business near the Property, and Blau owns a rental property
within 2,000 feet of the Property. (Reproduced Record (R.R.) Volume (Vol.) I at 42a-43a.) Under
the Act, Walsh and Blau are considered “parties in interest” and have standing to initiate a
conservatorship action. See Sections 3 and 4 of the Act, 68 P.S. §§ 1103, 1104.
2
Order).3 (R.R. Vol. II at 580a-82a.) 18th Street did not appeal the Appointment
Order.4
3
The Appointment Order provided, in relevant part:
B. [The Coalition] is appointed Conservator of the Property with all the
rights and duties as set forth in Act 135, including, but not limited to, Section [6 of
the Act, 68 P.S. § 1106]. The [Coalition] is granted immediate access to the
Property. The Property shall be secured and made safe pending submission of a
Proposed Final Plan. Conservator shall obtain any necessary permits from the City
of Philadelphia and maintain fire and liability insurance.
....
E. [18th Street] alleges that it took title to the Property by deed dated
April 28, 2017, but did not submit a copy of said deed into the record nor did it seek
to submit any oral or documentary evidence during [the] May 2, 2017 record
hearing. [18th Street] did not seek to establish the terms upon which it allegedly
took title. [18th Street] was afforded the opportunity to fully participate at the
hearing and . . . did in fact cross examine witnesses on the record. While [18th
Street] was represented by counsel at the hearing, no other witness, member or
representative appeared on behalf of [18th Street].
F. At the May 2, 201[7] hearing, [18th Street] did not seek to elect
“Conditional Relief” pursuant to Section [5(f) of the Act, 68 P.S. § 1105(f)].
G. [18th Street] may request the termination of the instant Conservatorship
and elect conditional relief as the successor owner, upon separate petition and the
submission of “adequate assurances” that it is the legal successor-in-interest to . . .
Isabella concerning the above-captioned matter, that it is the new title owner of the
Property and that it provides, as set forth in [Section 10 of the Act,] 68 P.S. § 1110,
adequate assurances to the Court that the conditions that constituted grounds for the
appointment of [the Coalition] as Conservator will be promptly abated, all
obligations, expenses and improvements of the conservatorship, including the
reimbursement or payment of all fees and expenses incurred by [Walsh, Blau,] and
the [Coalition], have been fully paid or provided for and the purposes of the
conservatorship will be fulfilled as set forth in a plan in accordance with the
Conditional Relief provisions of Section [5(f) of the Act, 68 P.S. § 1105(f)].
(R.R. Vol. II at 581a.)
4
Isabella filed a notice of appeal, docketed with this Court as Walsh v. T. Isabella,
791 C.D. 2017, but we dismissed the appeal for failure to comply with a defect correction notice.
On June 27, 2017, 18th Street filed a motion to strike the trial court’s May 15, 2017 order, which
the trial court denied following a hearing. 18th Street appealed to this Court, and by memorandum
3
Eleven months later, on April 24, 2018, 18th Street filed an “Emergency
Petition for Termination of Conservatorship, or, in the Alternative, Removal of [the
Coalition] as Conservator Pursuant to [Section 10(a)(4) of the Act, 68 P.S.
§ 1110(a)(4)]” (Termination Petition). (R.R. Vol. VI at 3041a-81a.) Therein,
18th Street asserted that since the Coalition’s appointment as conservator, the
Coalition has been derelict in its duties to rehabilitate and make the Property safe as
required by Paragraph B of the Appointment Order. Specifically, 18th Street
attached a violation notice issued by the Philadelphia Department of Licenses and
Inspections (L&I) on April 10, 2018. (Id. at 3053a-54a.) The violation notice
declared the rear wall, side wall, and chimney of the building on the Property
structurally unsafe and advised that failure to remedy the unsafe portions of the
building within 30 days could result in partial or total demolition. (Id.) 18th Street
requested emergency relief to terminate the conservatorship, maintaining that as
owner of the Property, it will suffer irreparable harm if the Property is destroyed due
to the Coalition’s inaction. 18th Street further argued that it was in the best position
to rehabilitate the Property because 18th Street’s sole member, Tony Rufo, is a
highly respected builder in the Philadelphia area. The Termination Petition sought
emergency termination of the conservatorship or removal of the Coalition as
conservator and permission for 18th Street to cure the outstanding violations set forth
in the notice issued by L&I.
The trial court held a hearing on April 25, 2018, to determine whether
18th Street was entitled to emergency relief and denied the request the following
and order dated May 30, 2018, docketed at 325 S. 18th St. v. Walsh, 353 C.D. 2018, we quashed
the appeal.
4
day.5 (See N.T., 4/25/2018, 1-65; R.R. Vol. IX at 4183a-4247a; R.R. Vol. VII
at 3126a.) The trial court concluded that 18th Street failed to establish that it would
suffer irreparable harm if the Termination Petition was heard in the ordinary course
and sent the underlying Termination Petition to the Honorable Kenneth Powell, who
had been handling the instant conservatorship action, for consideration.
(R.R. Vol. VII at 3126a.)
Following the emergency hearing, the Coalition filed a response to the
Termination Petition and brief in support disputing the allegations of inaction cast
by 18th Street. (R.R. Vol. VII at 3216a-34a.) In its brief, the Coalition listed the
tasks it had completed in its effort to make the Property safe pending approval of its
final blight remediation plan. (Id. at 3227a-28a.) Additionally, the Coalition argued
that if 18th Street wishes to step into the shoes of conservator of the Property, it
could do so by complying with the requirements of Section 10(2) of the Act, 68 P.S.
§ 1110(2), as directed in the Appointment Order. The Coalition contended that,
instead of seeking to terminate the conservatorship in accordance with this clear
statutory process, 18th Street has “embarked [on] a truly outrageous crusade of
meritless litigation” in an attempt to regain possession and control of the Property
free and clear of judicial oversight. (Id. at 3230a-31a.) On May 23, 2018, the trial
court denied 18th Street’s underlying Termination Petition without holding an
additional hearing. (Id. at 3379a.)
5
Due to the emergency nature of the Termination Petition, the trial court’s duty judge, the
Honorable Abbe Fletman, conducted the hearing. (See Notes of Testimony (N.T.), 4/25/2018,
1-65; R.R. Vol. IX at 4183a-4274a.)
5
On appeal,6 18th Street raises eleven issues for consideration. Most of 18th
Street’s issues involve matters that are irrelevant, outside the scope of this appeal, or
waived because they were not raised before the trial court.7 Those issues are not
6
This Court’s review determines “whether the trial court abused its discretion or committed
an error of law necessary to the outcome of the case.” City of Bethlehem v. Kanofsky,
175 A.3d 467, 475 n.8 (Pa. Cmwlth. 2017) (quoting In re Conservatorship Proceeding In Rem by
Germantown Conservancy, Inc., 995 A.2d 451, 459 n.6 (Pa. Cmwlth. 2010)), appeal denied,
191 A.3d 744 (Pa. 2018).
7
Specifically, the “Statement of Questions Involved” section of 18th Street’s brief
provides:
(A) Whether the failure to attach a resolution to the
underlying Act 135 Petition vitiates these proceedings, as a matter
of law, where [the Coalition] conservatorship [sic] is entirely based
on its status as a non-profit corporation and where the Philadelphia
Court of Common Pleas’ General Court Regulation No. 2009-1
requires, inter alia, that a certification and resolution be of the
Act 135 Petition?
(B) Whether, the trial court proceedings are null and void,
as a matter of law, due to [the Coalition’s] failure to comply with
Rules 1900(g) and (h)(1) of the Philadelphia Rules of Judicial
Administration regarding protocols vis-à-vis exhibits, physical
evidence and electronic evidence offered during hearings in the
Philadelphia Court of Common Pleas, where, to date, [the Coalition]
has not submitted any of its evidence from the May 2, 2017 hearing
via the Electronic Filing System and hence, the evidence is not part
of the record?
(C) Whether the trial court lacks subject matter jurisdiction
over the instant proceedings, as a matter of law, where, in 2014, the
Pennsylvania Legislature specifically amended [Section 5(a) of the
Act, 68 P.S. § 1105(a),] to reduce the time for holding a hearing to
appoint a conservator from 120 to 60 days “to balance the rights” of
property owners against the rights of developers and the public; and
where the hearing in the instant case occurred over 300 days after
the time proscribed [sic] in Act 135?
(D) Whether the temporal provision in [Section 6(c)(1) of
the Act, 68 P.S.] § 1106(c)(1), requiring the trial court to schedule a
6
Hearing to Approve a Final Plan within one hundred twenty (120)
days of the Conservator’s appointment is mandatory or directory?
(E) Whether the temporal provisions in [Section 6(c)(2) of
the Act, 68 P.S. § 1106(c)(2),] requiring the Conservator to file a
Final Plan thirty (30) days prior to the date of the Final Plan hearing
is mandatory or directory?
(F) Whether the contents of a “Final Plan” as specifically
defined in [Section 6(c)(3) of the Act, 68 P.S. § 1106(c)(3),] can be
modified by the [C]onservator or the trial court?
(G) Whether [the Coalition] failed to comply with
Paragraph “B,” of the trial court’s [Appointment] Order which
stated, inter alia, “The Property shall be secured and made safe
pending submission of a Proposed Final Plan;” where violations
were issued during [the Coalition’s] tenure as Conservator; and
where none of the violations against the “property” have been
addressed from the date of [the Coalition’s] appointment on May
15, 2017 up to and beyond the date of the trial court’s May 23, 2018
Order denying [18th Street’s] Motion to Terminate the
Conservatorship under [Section 10(4) of the Act, 68 P.S.]
§ 1110(4)?
(H) Whether [18th Street’s] opposition to the underlying
Act 135 proceedings precluded [the Coalition] from performing its
duties as Conservator as specifically defined in [Section 6 of the Act,
68 P.S. § 1106,] and the trial court’s [Appointment] Order?
(I) Whether Prehearing property inspections are permitted
under Act 135 and precedential case law and, whether such
inspections vitiate the proceedings and/or render evidence gleaned
therefrom inadmissible?
(J) Whether the trial court’s failure to permit [18th Street]
to present evidence prior to issuing its [Appointment] Order
constitutes a violation of due process where the trial court and the
parties stipulated to grant [18th Street] “Intervenor status” but
denied [18th Street] an opportunity to adequately prepare and be
heard?
(K) Whether the trial court abused its discretion and/or erred
as a matter of law in denying [18th Street’s] Motion to Terminate
[the Coalition’s] Conservatorship pursuant to [Section 10(4) of the
Act, 68 P.S. § 1110(4),] where: (1) [the Coalition] failed to comply
7
properly before this Court and will not be addressed. The only issues 18th Street
preserved for appeal relate to whether the Coalition’s alleged inaction warrants
termination of the conservatorship and whether 18th Street should be permitted to
rehabilitate the Property on its own.8
We begin with a review of the procedures for terminating a conservatorship
under Act 135. Section 10 of the Act, 68 P.S. § 1110, provides:
Upon request of a party in interest or the conservator, the
court may order the termination of the conservatorship if
it determines:
(1) the conditions that were the grounds for the petition
and all other code violations have been abated or
corrected, the obligations, expenses and improvements of
the conservatorship, including all fees and expenses of the
conservator, have been fully paid or provided for and the
purposes of the conservatorship have been fulfilled;
(2) the owner, mortgagee or lienholder has requested the
conservatorship be terminated and has provided adequate
assurances to the court that the conditions that constituted
grounds for the petition will be promptly abated, all
with the terms of Paragraph “B,” of the trial court’s [Appointment
Order] that required [the Coalition] to “make the premises safe
pending the approval of a Final Plan;” and[] (2) where [the
Coalition] failed to comply with the temporal and substantive
requirements of [Section 6(c)(2) and (3) of the Act, 68 P.S. §
1106(c)(2) and (3),] which required [the Coalition] to serve and file
a “Final Plan” as defined by the Act, thirty (30) days prior to at least
one of the three (3) hearings to approve a Final Plan?
(18th Street’s Brief at 4-7 (emphasis and footnote omitted).)
8
Isabella filed a brief in this matter addressing a single issue: whether prehearing property
inspections are permitted under Act 135 and precedential case law. This issue challenges the
validity of the Appointment Order, which Isabella appealed to this Court on June 5, 2017, docketed
at Walsh v. T. Isabella, 791 C.D. 2017. This Court, however, dismissed Isabella’s appeal on
July 13, 2017, for failure to comply with a defect correction notice. Accordingly, the argument is
waived as untimely and outside the scope of this appeal.
8
obligations, expenses and improvements of the
conservatorship, including all fees and expenses of the
conservator, have been fully paid or provided for and the
purposes of the conservatorship have been fulfilled;
(3) the building has been sold by the conservator and the
proceeds distributed in accordance with [S]ection 9(d) [of
the Act, 68 P.S. § 1109(d)]; or
(4) the conservator has been unable, after diligent effort,
to present a plan that could be approved under
[S]ection 6(b)(3) [of the Act, 68 P.S. § 1106(b)(3)] or to
implement a previously approved plan or, for any reason,
the purposes of the conservatorship cannot be fulfilled.
18th Street filed the Termination Petition pursuant to Section 10(4) of the Act and,
therefore, was required to prove: (1) that after diligent effort, the Coalition was
unable to present a plan that could be approved by the trial court; (2) that the
Coalition was unable to implement a previously approved plan; or (3) that the
conservatorship could not be fulfilled for any other reason. The thrust of
18th Street’s argument below was that the Coalition neglected its duty to make the
Property safe as required by the Appointment Order and that 18th Street should be
granted the opportunity to rehabilitate the Property independently. As a result, we
presume 18th Street invoked the catchall provision found in Section 10(4)—i.e., that
the conservatorship could not be fulfilled.
In its brief to this Court, 18th Street argues, generally, that the conservatorship
is a “‘failed enterprise’ that can never be ratified or completed.” (18th Street’s Brief
at 46.) It recognizes that the Coalition fixed the pavement around the Property,
secured locks, and obtained insurance, but 18th Street maintains that such actions
are insufficient to make the Property safe as required by the Appointment Order.
This inaction, it argues, renders the conservatorship void as a matter of law.
9
In response, the Coalition lists each step it has taken in furtherance of the
conservatorship. Specifically, the Coalition maintains that it has: (1) secured
insurance on the Property; (2) repaired sidewalks around the Property; (3) secured
the rear and side yards of the Property; (4) replaced locks on the Property;
(5) retained an architect; (6) retained an engineer; (7) applied for and secured full
approval from the historical commission and L&I for its final plan for blight
remediation; (8) applied for and secured permits from L&I; and (9) secured windows
and doors on the Property. (Coalition’s Brief at 34-35.) These actions, the Coalition
contends, evidence compliance with the Appointment Order and prove that the
Coalition has rehabilitated the Property to the extent permitted prior to the approval
of a final plan. Moreover, the Coalition asserts that 18th Street improperly seeks to
terminate the conservatorship under Section 10(4) of the Act. The Coalition further
asserts that, to the extent 18th Street wishes to step into the shoes of conservator and
rehabilitate the Property, 18th Street must proceed under Section 10(2) of the Act,
in accordance with the clear language of the statute and as directed in the
Appointment Order. For these reasons, the Coalition maintains that the trial court
did not err in denying the Termination Petition.
We agree with the Coalition. The trial court did not abuse its discretion or
commit an error of law in determining that 18th Street failed to present sufficient
grounds for termination of the conservatorship pursuant to Section 10(4) of the Act.
We note that, in the Termination Petition, 18th Street placed great weight on the
violation notice issued by L&I on April 10, 2018. As the trial court explained,
however, at the time L&I issued the violation, the trial court had not approved a final
plan for blight remediation. That the severely blighted Property would continue to
have compliance issues before a final plan was approved and implemented was
10
somewhat obvious. In addition, this Court recognizes that, at the time 18th Street
filed the Termination Petition, the 30-day period to remedy the violations listed in
the notice had not run.9 For these reasons, the fact that L&I issued a violation notice
was not fatal to the Coalition’s appointment as conservator, and the trial court did
not err in declining to terminate the conservatorship based on the Coalition’s alleged
inaction.
Additionally, this Court agrees with the Coalition that 18th Street failed to
take advantage of the statutory process afforded to an owner of property that seeks
to remediate a blighted property sans conservator. Section 10(2) of the Act allows
an owner of property to abate blighted conditions if it “provide[s] adequate
assurances to the [trial] court that the conditions that constituted grounds for the
petition will be promptly abated,” and pays “all fees and expenses of the
conservator.” Instead of proceeding under Section 10(2) and presenting the
necessary evidence to achieve termination of the conservatorship, 18th Street merely
makes bald assertions that it is willing and able to make the repairs itself. In short,
18th Street did not pursue the proper statutory procedure to achieve its goal of
independently rehabilitating the blighted Property and terminating the
conservatorship. Accordingly, the trial court did not err or abuse its discretion in
denying the Termination Petition.
9
L&I issued the violation notice on April 10, 2018. (R.R. Vol. VI at 3053a-54a.)
18th Street filed the Termination Petition fourteen days later, on April 24, 2018. (Id.
at 3041a-81a.)
11
For the reasons stated above, the trial court’s order is affirmed.
P. KEVIN BROBSON, Judge
12
IN THE COMMONWEALTH COURT OF PENNSYLVANIA
Charles W. Walsh, III, Laura Blau and :
Philadelphia Community Development :
Coalition :
:
v. : No. 862 C.D. 2018
:
Teresa F. Isabella and 325 S. 18th :
Street, LLC :
:
Appeal of: 325 S. 18th Street, LLC :
ORDER
AND NOW, this 24th day of April, 2020, the order of the Court of Common
Pleas of Philadelphia County, dated May 23, 2018, is AFFIRMED.
P. KEVIN BROBSON, Judge