Ruiz v. New Garden Township

ROSENN, Circuit Judge,

Concurring.

I concur in the judgment reversing the District Court’s decision. I write separately, however, because I cannot agree with the majority’s analysis based on an assumption that the plaintiffs have a protected property interest. I also believe due process analysis is unnecessary to the disposition of this case.

I.

Where, as here, there is a claim of an alleged deprivation of property without due process, a two-part inquiry is required. Kovats v. Rutgers, 749 F.2d 1041, 1047 (3d Cir.1984), cert. denied sub nom. Varna v. Bloustein, 489 U.S. 1014, 109 S.Ct. 1126, 103 L.Ed.2d 188 (1989) (citing Logan v. Zimmerman Brush Co., 455 U.S. 422, 428, 102 S.Ct. 1148, 71 L.Ed.2d 265 (1981)).

The first question is whether the plaintiffs] [were] deprived of a protected property interest. Property interests, while protected by the [United States] Constitution, are not created by the Constitution. “Rather they are created and their dimensions are defined by existing rules or understandings that stem from an independent source such as state law.” Board of Regents v. Roth, 408 U.S. 564, 577, 92 S.Ct. 2701, 2709, 33 L.Ed.2d 548 (1972); see also Leis v. Flynt, 439 U.S. 438, 441, 99 S.Ct. 698, 700, 58 L.Ed.2d 717 (1979). The definition of property, therefore, may turn in some cases on a question of state law. If a property interest is found to exist, the second question-what process is due-is a matter of federal law. Memphis Light, Gas & Water Division v. Craft, 436 U.S. 1, 98 S.Ct. 1554, 56 L.Ed.2d 30 (1978); see Logan, 455 U.S. at 432, 102 S.Ct. at 1155.

*210Kovats, 749 F.2d at 1047. However, “[i]f there is no property interest, there can be no valid due process claim.” Id.

Where, as here, it is undisputed that a residential rental use of the property at issue was set up by the landowner in violation of state, county, and municipal laws, such use was null and void ab initio under Pennsylvania law. The landowner had acquired no vested property interest in his unlawful rental use of the property. The plaintiff-tenants, whose interest was derivative and at most coextensive with the landowner’s interest, had acquired no vested property interest either in the same rental use of the property. Where there is no property right, there can be no viable due process claim as a matter of law.

Where the plaintiffs’ due process claim fails as a matter of law under the first part of the two-part inquiry set forth in Logan, 455 U.S. at 428, 102 S.Ct. 1148, which is a matter of state law, the second part of what process is due, or not due, which is a matter of federal law, is irrelevant. Where the plaintiffs’ claim can be adjudicated as a matter of state law, we should not engage in any unnecessary constitutional due process analysis. Neese v. Southern Railway Co., 350 U.S. 77, 78, 76 S.Ct. 181, 100 L.Ed. 60 (1955).

The record in this case establishes that the landowner unlawfully installed the eleven mobile homes/trailers, without having obtained the required permits from the state, county, and municipal authorities and in violation of state and local (zoning) laws. These laws and ordinances were enacted to promote the health, welfare, and safety of not only the tenants, but also the general public in the community. For instance, the sewage permits are intended to protect the public against diseases. The issue, overlooked by the District Court and the parties in dispute, is whether a private rental arrangement between the landowner and the plaintiffs executed and operated in violation of state and local laws can ever give rise to constitutionally protected property interests.14 We consider the issue sua sponte because of the “traditional practice of ... refusing to decide constitutional questions when the record discloses other grounds of decision, whether or not they have been properly raised ... by the parties.” Neese, 350 U.S. at 78, 76 S.Ct. 131.

It is not disputed that the Zoning Hearing Board found, following a hearing attended by the landowner, that he had violated local zoning laws and the state statutes regarding health, safety, and real estate regulation in installing the mobile homes/trailers and that the landowner did not appeal the decision. The Board’s findings of violations are conclusive now. The Township asserts that it had placed valid zoning restrictions at least a decade before any of the eleven mobile home/trailers were placed on the land at Elliot Road, New Garden Township, Pennsylvania, which precluded the present residential use by the plaintiffs. Even if assuming that the owner had obtained a variance for residential use of his land, which is not the case here, residential use of his land would still have required the landowner to prepare a land development plan, obtain a conditional use permit, sewage and other permits required by the Township ordinances for any residential development before the owner could lease his property and the plaintiffs could occupy the property.

*211The Township solicitor testified in the District Court, and it is undisputed, that before the mobile homes were placed on the property, the owner had not obtained the required “sewage permit from the County Health Department for that mobile home park.” He also testified that installation of a sewage system would interconnect with the township sewer plant, as required. He further stated that the Township required a use and occupancy permit before the owner could install the mobile home/trailers on his property and rent them to the plaintiffs. The Township solicitor testified also that the owner was required to comply with the state and county health and safety codes governing uses of electrical and construction anchoring. It is undisputed that neither the landowner nor the plaintiff-tenants have complied with any of those codes. Nor have they applied for and obtained any health and safety permits necessary for the residential use of the property.

Rental operation in Pennsylvania is governed and regulated by state, county, and municipal laws. See Kelly v. Borough of Sayreville, N.J., 107 F.3d 1073, 1077 (3d Cir.1997) (“State law creates the property rights protected by the Fourteenth Amendment.”). Because the mobile homes/trailers were installed and operated in violation of those laws, their use as rental property by either the landowner or the plaintiff-tenants is also unlawful. Thus, their rental agreement is likewise unlawful and invalid. See generally Puleo v. Zoning Hearing Bd. of Schuylkill Township, 722 A.2d 789, 791 n. 4 (1999) (quoting Black’s Law Dictionary 1536 (6th ed.1990) (an “unlawful” act is “acting contrary to, or in defiance of the law”; “unlawful” agreements are “ineffective in law, for they involve acts which, though not positively forbidden, are disapproved by law and are therefore not recognized as ground of legal rights because they are against public policy”)); 6 Williston on Contracts 24 (4th ed. 1995) ([0]ne who has participated in a violation of the law will not be allowed to assert in court any right based upon or directly connected with the illegal transaction.”) (citing federal and state case law); Highpoint Townhouses, Inc. v. Rapp, 423 A.2d 932, 935 (D.C.1980) (“[A] contract made in violation of a licensing statute that is designed to protect the public will usually be considered void and unenforceable.”) (internal quotation marks omitted) (quoting Truitt v. Miller, 407 A.2d 1073, 1079 (D.C.1979)).

In Puleo, a new owner of a piece of real estate property, located in a “limited industrial zone,” had a dispute with a company as to the ownership of two billboards that it had installed. It was undisputed that the billboards constituted lawful nonconforming use. The company ended the dispute by cutting down the billboards with a chainsaw; there was no question that its act was knowing and intentional. Several months later, “without first securing a building permit,” the new owner “reconstructed the billboards.” Puleo, 722 A.2d at 790. The town denied the owner’s application after the fact for a building permit. The town’s zoning board also denied the owner’s request to continue the nonconforming use of the billboards because they were not “involuntarily” damaged and no building permit was secured within one year of their destruction within the meaning of the local ordinance. A Pennsylvania trial court affirmed the board’s decision.

On further appeal, the Commonwealth Court, a special state appellate court, noted that the owner did not challenge the validity of the zoning ordinance, but instead argued that its physical reconstruction of the billboards within a year of their destruction should be deemed to be in compliance with the ordinance and in eon-*212tinuation of the previous lawful nonconforming use. Id. at 791. The appellate court rejected the argument, concluding that the case was analogous to “an instance where a landowner applie[d] for and secure[d] a building permit through misrepresentation or fraud.” Id. (citing D’Emilio v. Bd. of Supervisors, 157 Pa.Cmwlth. 64, 628 A.2d 1230 (1993)). “It follows, therefore, that if a person who applies for and secures a building permit through fraudulent means acquires no rights in the structure, then a person who completely ignores the requirement of securing a building permit altogether also cannot acquire any vested right in the structure.” Puleo, 122. A.2d at 791 (emphasis added). The court concluded that the owner’s “failure to obtain a building permit, therefore, made the effect of its reconstruction a nullity.” Id. at 792 (emphasis added).

The violation in this case is much more flagrant than in Puleo. The owner in Pu-leo was at least trying to replace the two destroyed billboards that had been previously lawfully installed. In this case, the eleven trailer/mobile homes were installed not to replace any previous lawful use; they were installed without permission, and without the knowledge of the Township, in knowing violation of state, county, and local laws.15 Under the holding of Puleo, k landowner who completely ignores the requirements of state and local laws cannot have acquired any vested right in the rental use of his property.' Similarly, the unlawful occupation of the rental property by the plaintiff-tenants has vested no property right in them. To rule otherwise, as did the District Court, would be to fashion a property right that is not recognized under-and contrary to-state law.

The tenants here do not, and cannot, have greater right than that of the owner with regard to the rental property. See, e.g., Adams Outdoor Advertising v. City of East Lansing, 463 Mich. 17, 614 N.W.2d 634, 639 (2000) (“It is fundamental property law that a lessor can transfer no greater rights than he possesses”; lessees’ interest rights are limited to those possessed by the lessor.); State v. Vaughan, 319 S.W.2d 349, 354 (1959) (“[Tjenants who occupy the property have no greater right than the owners.”); Smith v. Woolery, 137 N.E.2d 632 (Ohio Ct.App.1955); Wilmington Housing Auth. v. Nos. 500, 502, and 507 King St., and Nos. 503, 505, and 507 French St., Commercial Trust Co., 273 A.2d 280, 281 (Del.Super.Ct.1970).16

*213Where, as here, the owner has no vested property right, it would be anomalous to conclude that the tenants have any vested property right. Because property rights, including leasehold interests, are created by state law and the rental arrangement between the owner and the tenants is unlawful, the plaintiffs obtained no vested right in the rental property. Their rental agreement with the owner gave them no valid leasehold interest recognized and protected by state law. Under such circumstances, there can be no valid due process claim as a matter of law because there can be no deprivation of a nonexistent right.17 Kovats, 749 F.2d at 1047. The District Court’s conclusion of due process violations predicated on a nonexistent right is, therefore, reversible error.

II.

In footnote 9 of the majority opinion, the majority characterizes my analysis above as one that “begins and ends with charging the plaintiffs with the outcome of the zoning hearing.... ” The majority opines that unless the plaintiffs had an “opportunity to appear at the zoning hearing that found their property to be in violation and therefore could ... defend against that allegation,” my analysis “does not adequately respond to the legal challenge implicit in plaintiffs’ appeal.”

Although the majority’s criticism has some surface appeal, it misses the real issue here. Conceivably the plaintiffs may not have become aware of their landlord’s zoning violations until after the Township’s zoning enforcement hearing, but when and how, the plaintiffs became aware of the violations does not, and cannot, affect the reality of the landlord’s zoning violations. My analysis is grounded on the view that where the landowner’s rental use of his property was invalid and void ab initio for violations of state and municipal laws, as established by the zoning enforcement hearing attended by the landowner, his tenants did not acquire any right in the same rental use as a matter of law. To suggest otherwise would be to accord tenants greater rights than those possessed by the landowner in contravention of well established landlord-tenant laws.

To the extent that the majority’s criticism embraces the plaintiffs’ argument that the Township’s zoning enforcement decision cannot be valid and binding on the tenants unless they participated in the enforcement hearing, the majority, as well as the tenants, has shown no legal authority to support that argument. The majority’s own position has implicitly rejected that argument in light of its holding that the plaintiffs, with their de minimis interest, are not entitled to actual notice of the zoning enforcement hearing because their tenancy interest can be terminated at thir*214ty-days’ notice and the Township has given them several months to vacate the property.

Admittedly, my analysis does not answer the question of how or when the tenants knew or should have known that their occupancy of the property was invalid because of the landowner’s zoning violations prior to the Township’s negative determination. That issue, however, is not present in the tenants’ action here. The tenants’ argument, that they should have been given adequate notice of a land use violation would be valid if the Township brought an action against them for the land use violations, instead of the landowner. Where, as here, it is not disputed that the landowner had converted his property to a residential rental use in violation of state, county, and municipal laws, when and how the tenants should have become aware of their landowner’s unlawful use of his land is irrelevant to the issue of whether they have any valid property right.18 Their interest in the residential rental use of the property is at most coextensive with the landowner’s interest. Pennsylvania law holds only the landowner, not his tenants, responsible for any zoning violations that occur on his property.19 Even if the tenants may not have become aware of their landowner’s zoning violations until after the zoning enforcement hearing, the established landowner’s violations, resulting in nullification of his rental use of his property, precludes the tenants’ due process claim as a matter of law. There cannot be a due process violation claim when the claimant has no valid property interest.

For these reasons, I do not believe that assuming that the tenants have a valid property interest does not resolve their constitutional claim. Under well-established case law, where, as here, the court is confronted with a due process claim, the court must determine first whether there is a valid property interest possessed by the plaintiffs. Kovats, 749 F.2d at 1047 (citing Logan, 455 U.S. at 428, 102 S.Ct. 1148). I see no reason for the court to shirk its responsibility of making this initial determination by making an assumption contrary to state law.

Furthermore, the majority’s resolution of the tenants’ due process claim, by reasoning that there is no deprivation of their property interest because, at most, they have a month-to-month leasehold interest, which requires only a thirty-day advance notice for termination under state law, and they have been given more than thirty days to vacate the property does not adequately respond to their due process claim. To the extent that such analysis is contingent on the tenants having a mere month-*215to-month leasehold interest and an adequate post-deprivation remedy, would the analysis be sustainable if the plaintiffs were year-to-year tenants, as some have claimed? The state statute, quoted in footnote 6 of this concurring opinion, mandates no separate notice of zoning violation hearing to any type of tenants (unless they have filed a written request with the municipality, or the landowner has requested in writing to the municipality that his tenants receive such notice), regardless of the length or type of tenants’ leasehold interests.

III.

Mindful of the Supreme Court’s instruction that traditionally the courts should refuse to “decide constitutional questions when the record discloses other grounds of decision, whether or not they have been properly raised ... by the parties,” Neese, 350 U.S. at 78, 76 S.Ct. 131, we should not engage in a constitutional due process analysis when the record discloses beyond dispute another ground for disposal of the plaintiffs’ claim. That ground is that the tenants have no vested property interest under state law. This approach is especially appropriate where the plaintiffs have not attacked the facial constitutionality of the state statute, MPC § 10616.1.

I would, therefore, reverse the District Court’s judgment on the ground that the plaintiffs have shown no cognizable property interest under state law and eschew unnecessary federal due process analysis.

. The Township's briefs, particularly its reply brief, have touched on the issue, but failed to develop its argument.

. The landowner has not claimed mistake or ignorance.

. The cases cited by the tenants with respect to their standing to apply for a zoning variance, to bring a condemnation action, or to challenge their eviction because of health and living conditions are inapposite. Because the alleged leasehold interest in this case is legally non-existing, this case is materially different from those cases where lessees with lawfully constituted leasehold interests challenge condemnation or zoning ordinances that affect their property interests. See, e.g., Richman v. Philadelphia Zoning Bd. of Adjustment, 391 Pa. 254, 137 A.2d 280, 283 (1958) (a long-term commercial lessee had standing to apply for a use variance); Nicholson v. Zoning Bd. of Adjustment, 392 Pa. 278, 140 A.2d 604, 606 (1958) (same); Mobil Oil Corp. v. Zoning Hearing Bd. of Tredyffrin Township, 100 Pa.Cmwlth. 480, 515 A.2d 78, 79 (1986).

For the same reasons, all the case law regarding whether tenants have standing to bring a condemnation action, alleging unlawful taking effected under a zoning ordinance or rezoning, is also inapposite. See, e.g., Millcreek Township v. N.E.A. Cross Co., 152 Pa.Cmwlth. 576, 620 A.2d 558, 561 (1993) (commercial lessees with rights to explore natural gas and develop wells had standing to petition for de facto taking).

Finally, this case is materially different from such cases as involving condemnation of property occupied by tenants because of serious and dangerous living - conditions. See, *213e.g., Grayden v. Rhodes, 345 F.3d 1225 (11th Cir.2003) (involving condemnation and eviction of tenants in an apartment complex for their protection because of serious and dangerous living conditions). It was not disputed that the tenants in Grayden had legal right to live in the apartment complex. The tenants in all the cases cited above had lawful tenancy rights established and recognized under state laws.

. Following the Township Zoning Hearing Board's finding of violation against the landowner and denial of his variance request, the owner filed an application for conditional use of the property as a trailer/mobile home park. Some of the renters, as well as the owner, have appealed the zoning board's subsequent denial of the conditional use application to the state trial court. That appeal has been stayed pending the resolution of this appeal. Because both the owner and the plaintiffs have no property right vested and recognized under the state law for their unlawful use of the property, their joint conditional use application is now an opportunity for them to establish their lawful use for the first time.

. People who rent property usually run the risk that the ostensible owner of it may not have good title to the property, that it may be subject to foreclosure because of a mortgage default or other lien delinquency, or that a lease may be void because it violates local zoning or state laws. Interested parties can avoid legal complications by obtaining information pertaining to the title and lien status of the property from the dockets of the county court house; information concerning the applicable zoning laws is generally available at the clerk's office for the local municipality.

. Under the Pennsylvania Municipalities Planning Code (MPC) § 10616.1, the plaintiffs are not entitled to notice of a zoning enforcement hearing against the landowner. The statute provides in relevant part:

(b) The enforcement notice shall be sent to [1] the owner of record of the parcel on which the violation has occurred, to [2] any person who has filed a written request to receive enforcement notices regarding that parcel, and to [3] any other person requested in writing by the owner of record.

53 Pa. Stat. Ann. § 10616.1 (emphases added). The plaintiffs have not attacked the facial constitutionality of the statute.