YOHN, District Judge.
Leroy Sterling filed this action against the Redevelopment Authority of the City of Philadelphia (the "RDA"), the Philadelphia Authority for Industrial Development ("PAID"), the City of Philadelphia (the "City"), and Crane Arts, LLC. I previously dismissed the City as a party to this action. Now pending are the motions filed by the RDA and PAID for summary judgment under Federal Rule of Civil Procedure 56, as well as their motion to exclude the report and testimony of Sterling's damages expert. For the reasons that follow, I will grant in part and deny in part the RDA's motion for summary judgment, and I will grant PAID's motion for summary judgment. I will also grant the motion to exclude the expert report and testimony.
This case arises from a dispute regarding property that was conveyed to Sterling as part of a plan for the development of the North Philadelphia Redevelopment Area.
The RDA is a "public body and a body corporate and politic" that was created under Pennsylvania's Urban Redevelopment Law, 35 Pa. Stat. Ann. §§ 1701 et seq. See 35 Pa. Stat. Ann. § 1703(a). The RDA is authorized, among other things, to acquire property by purchase, gift, or eminent domain; to lease and sell property; and to plan and contract with private, corporate, or governmental redevelopers, for
PAID is a public authority incorporated by the City under the Economic Development Financing Law, 73 Pa. Stat. Ann. §§ 371 et seq. (Def. PAID's Statement of Uncontested Material Facts ("PAID's Facts") ¶ 6.) PAID is managed by the Philadelphia Industrial Development Corporation (the "PIDC"), a "private, not-for-profit Pennsylvania corporation." http://www. pidc-pa.org/about-us (last visited Nov. 4, 2011).
In July 1996, in accordance with its power of eminent domain, the RDA condemned the property located at 1425-43 North American Street, in Philadelphia. (PAID's Facts ¶ 7; Def. PAID's Mot. for Summ. J. on Pl.'s Claims ("PAID's Mot. for Summ. J.") Ex. D.) On December 15, 2000, Sterling executed a land-reservation agreement in which the PIDC agreed to reserve the property for purchase by Sterling. (See PAID's Mot. for Summ. J. Ex. E.) In its letter describing the terms and conditions of the land reservation, the PIDC explained that the reservation was "subject to review and comment by the RDA," which was holding the property for PIDC and PAID, and was "subject to their Redevelopment Agreement." (Id. at 1.) The PIDC asserted that during the reservation period, Sterling was expected to "prepare a set of schematic plans, including a site plan, soil erosion and sedimentation plan, [and] a landscaping plan, [and] execute the RDA Redevelopment Agreement, and a financing commitment satisfactory to PIDC, if applicable." (Id.) The PIDC advised Sterling to "review the zoning of the site in order to make certain that you can legally use it for your intended purposes ... and satisfy yourself as to the environmental condition of the site" because "[t]his property is being sold `as is' and neither RDA, PIDC nor PAID will indemnify the buyer for any site conditions whatsoever." (Id.)
Sterling wanted to purchase the property to build a facility for his cement masonry business and to create and develop a training program for cement mason workers. (PAID's Facts ¶ 10; Def. RDA's Mot. for Summ. J. ("RDA's Mot. for Summ. J.") Ex. I, Dep. of Leroy Sterling (Oct. 19, 2010) ("Sterling Dep.") at 22:21-26:13.)
On August 22, 2002, the RDA entered into a redevelopment agreement with PAID, under which PAID was to develop the property. (RDA's Mot. for Summ. J. Ex. B ("Redevelopment Agreement").) The agreement provided that PAID, referred to in the agreement as the "Redeveloper," was to begin the development of the property within three months and was to complete the development, "to the satisfaction of the [RDA]," within eighteen months. (Id. ¶ 3.7.) The Redeveloper was responsible for securing and paying for any required permits, licenses, approvals, and variances, but the RDA agreed to assist the Redeveloper in securing them. (Id. ¶ 3.6.) The agreement granted the RDA a "right of re-entry"; in the event of default, including the Redeveloper's failure to complete the development of the property in the time specified in the agreement, the RDA could, after proper notice to the Redeveloper and the Redeveloper's failure to cure the default in the specified time, "enter into the Premises or any appurtenant easement and, by this entry terminate the estate that had been conveyed by the [RDA] to the Redeveloper by such deed and revest title to the Premises or any appurtenant easement in the [RDA] absolutely." (Id. ¶ 5.5.)
The agreement provided that "[n]one of the provisions in this Agreement shall be deemed or are intended to be merged by reason of any subsequent deed, and any subsequent deed which shall be recorded shall not be deemed to affect or impair the provisions, obligations and covenants of this Agreement." (Id. ¶ 6.4.)
The RDA conveyed the property located at 1425-43 North American Street to PAID by deed on September 10, 2002. (See RDA's Mot. for Summ. J. Ex. D.) The deed and a "Memorandum of Redevelopment Agreement" were recorded on September 18, 2002. (See id. Exs. C and D; PAID's Facts ¶ 20.)
On September 10, 2002, PAID assigned its rights and obligations under the Redevelopment Agreement with the RDA to Sterling. (PAID's Facts ¶¶ 21-23.) Sterling agreed, in an Amendatory Agreement with the RDA and PAID, to "assume and perform all of the terms and conditions[,] obligations and requirements contained in the Redevelopment Agreement between the PIDC
Sometime after closing, the City asked the PIDC to pay for a survey that Sterling needed in order to consolidate the individual lots that made up the property and begin development. (PAID's Facts ¶ 29.) Sterling's architect, Kenneth Brinkley, who was responsible for getting proper approvals to develop the property (PAID's Facts ¶ 26), told the City that he received the funds for the survey on June 30, 2003. (Def. RDA's Reply to Pl.'s Mem. of Law in Opp'n to Mot. for Summ. J. ("RDA's Reply Br.") Ex. S (letter from Kenneth Gordon Brinkley to Vincent Dougherty (July 3, 2003)).) And on September 15, 2003, he reportedly told the City that the survey had been completed. (Id. Ex. S (e-mail from Denis Murphy to Vincent Dougherty (Sept. 15, 2003, 3:48 p.m.)).) Nonetheless, as of January 31, 2005, Sterling had not developed the property, as evidenced by a letter of that date to Brinkley from Denis Murphy, who worked for the City's Empowerment Zone and held the title of American Street business organizer, in which Murphy thanked Brinkley for his "prompt attention to the problem of high weeds that [the City] reported in September" and asked whether Sterling "still intend[ed] to develop the site and what the timeline [was] for beginning construction."
On April 25, 2006, approximately three and a half years after Sterling entered into the Amendatory Agreement with the RDA and PAID, the RDA sent a notice of default to Sterling informing him that he was in default of several provisions of the Redevelopment Agreement. (See RDA's Mot. for Summ. J. Ex. F.) According to the notice, Sterling had failed to submit final plans for the redevelopment project in accordance with paragraph 3.2 of the Redevelopment Agreement; had failed to begin construction within three months after settlement and to complete construction within eighteen months of settlement, as required by paragraph 3.7 of the agreement; had failed to redevelop and "prosecute work vigorously" as required by paragraph 5.1(5) of the agreement; had failed to "furnish and supply a sufficiency of property, materials and workmen required to prosecute the work to completion" in accordance with paragraph 5.1(6) of the agreement; and had failed "to keep, perform or comply with the terms, provisions and covenants" of the agreement in accordance with paragraph 5.1(11). (Id. at 2.) Citing paragraph 5.2 of the Redevelopment Agreement, the RDA demanded that Sterling "proceed immediately to cure or remedy these defaults within 60 days,"
Approximately eighteen months later, on November 2, 2007, the RDA, exercising its power of attorney and right of re-entry, executed a deed transferring the property back to itself.
On September 22, 2009, the RDA conveyed the property to defendant Crane
Sterling filed this action in the Court of Common Pleas for Philadelphia County on April 15, 2010, and on May 20, 2010, the City, with the consent of all the defendants, removed the action to this court. Sterling asserts four counts. In count I, brought under 42 U.S.C. § 1983, Sterling alleges that the RDA, PAID, and the City violated the due-process clause of the Fourteenth Amendment by depriving him of his property without due process of law. In count II, Sterling asserts breach-of-contract claims against those three defendants. Sterling alleges that the RDA breached the Redevelopment Agreement by failing to render assistance to Sterling as required under the agreement.
After the parties had the opportunity to conduct limited discovery, the City filed a motion to dismiss the claims against it for failure to state a claim under Rule 12(b)(6). I granted that motion and dismissed the City as a party to this action in a memorandum and order dated July 27, 2011.
The RDA and PAID have now moved for summary judgment as to the claims against them. They have also filed a motion to exclude the report and testimony of Sterling's damages expert.
A motion for summary judgment shall be granted "if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." Fed.R.Civ.P. 56(a). "Where the record taken as a whole could not lead a rational trier of fact to find for the nonmoving party, there is no `genuine issue for trial.'" Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986) (quoting First Nat'l Bank of Ariz. v. Cities Serv. Co., 391 U.S. 253, 289, 88 S.Ct. 1575, 20 L.Ed.2d 569 (1968)). To defeat a motion for summary judgment, the nonmoving party must show more than "[t]he mere existence of a scintilla of evidence" for elements on which it bears the burden of production, Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 252, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986), and may not "rely merely upon bare assertions, conclusory allegations or suspicions," Fireman's Ins. Co. v. DuFresne, 676 F.2d 965, 969 (3d Cir.1982). When evaluating a motion for summary judgment, the court "is not to weigh the evidence or make credibility determinations." Petruzzi's IGA Supermarkets, Inc. v. Darling-Delaware Co., 998 F.2d 1224, 1230 (3d Cir.1993). "The evidence of the nonmovant is to be believed, and all justifiable inferences are to be drawn in his favor." Anderson, 477 U.S. at 255, 106 S.Ct. 2505.
Sterling asserts claims against the RDA and PAID under section 1983 as well as under state law for breach of contract and conversion.
To state a section 1983 claim, a plaintiff must demonstrate that the defendant, acting under color of state law, deprived him of a right secured by the Constitution or the laws of the United States. Kaucher v. County of Bucks, 455 F.3d 418, 423 (3d Cir.2006). There is no dispute that the RDA and PAID were acting under color of state law. The issue here is whether they violated Sterling's constitutional rights.
Sterling claims that the RDA's execution of the deed transferring the property back to itself (and certain related actions by the RDA and PAID) violated his rights to due process under the Fourteenth Amendment.
The RDA and PAID argue that Sterling's due-process claims are barred by the statute of limitations and that, in any event, his claims must fail on the merits as a matter of law.
Sterling's due-process claims, like all section 1983 claims, are subject to the state statute of limitations for personal-injury actions, see Wallace v. Kato, 549 U.S. 384, 387, 127 S.Ct. 1091, 166 L.Ed.2d 973 (2007), which in Pennsylvania is two years, see Sameric Corp. of Del., Inc. v. City of Philadelphia, 142 F.3d 582, 599 (3d Cir.1998); see also 42 Pa. Cons.Stat. Ann. § 5524.
Here, Sterling's due-process claims stem from the RDA's execution of the deed transferring the property back to itself. The RDA executed the "reverter" deed on November 2, 2007, and Sterling received notice on February 21, 2008, that the RDA had deeded the property back to itself. The two-year statute of limitations governing Sterling's claims thus began to run — at the latest — on February 21, 2008. Because Sterling did not file this action until April 15, 2010, his section 1983 claims stemming from the RDA's transfer of the property back to itself are untimely.
Sterling argues, however, that these claims are not time-barred, because the RDA's subsequent sale of the property to Crane Arts, which occurred on September 22, 2009, and was thus within the two-year limitations period, was a "continuing violation."
Here, even assuming that the sale of the property to Crane Arts could be construed as a "violation" for purposes of determining the applicability of the doctrine, the RDA's execution of the "reverter" deed had a degree of permanence that should have put Sterling on notice of his duty to assert his rights. By deeding the property back to itself, the RDA permanently deprived Sterling of his ownership interest in the property, and there was nothing to prevent Sterling from promptly asserting a claim against the RDA after he was notified of the RDA's actions.
Sterling similarly argues that the failure of PAID to return the money that he paid for the property, after the RDA deeded the property back to itself, was a continuing violation; Sterling was not compensated until February 2011, when the RDA sent him a check for the amount he paid
Because Sterling filed this action more than two years after the RDA notified him that it had executed a deed transferring the property back to itself, and because the continuing-violations doctrine does not apply here, Sterling's due-process claims stemming from the RDA's transfer of the property back to itself are time-barred. In any event — and to the extent that his other due-process claims are timely — his claims fail on the merits as a matter of law, as discussed in the next subsection below.
Sterling claims that the RDA and PAID violated his rights to due process under the Fourteenth Amendment. The due-process clause provides that no state shall "deprive any person of life, liberty, or property, without due process of law." U.S. Const. amend. XIV, § 1. "While on its face this constitutional provision speaks to the adequacy of state procedures," Nicholas v. Pa. State Univ., 227 F.3d 133, 139 (3d Cir.2000), the Supreme Court has held that the due-process clause "`guarante[es] more than fair process,' and ... cover[s] a substantive sphere as well, `barring certain government actions regardless of the fairness of the procedures used to implement them.'" County of Sacramento v. Lewis, 523 U.S. 833, 840, 118 S.Ct. 1708, 140 L.Ed.2d 1043 (1998) (quoting Washington v. Glucksberg, 521 U.S. 702, 719, 117 S.Ct. 2258, 138 L.Ed.2d 772 (1997), and Daniels v. Williams, 474 U.S. 327, 331, 106 S.Ct. 662, 88 L.Ed.2d 662 (1986)). Here, Sterling asserts violations of his rights to both procedural and substantive due process. I consider each in turn.
To sustain a claim for a violation of the procedural due-process clause, a plaintiff must establish that "(1) he was
Here, Sterling claims that the RDA violated his rights to procedural due process when it executed a deed transferring the property back to itself without proper notice or a hearing. (Although Sterling also brings this claim against PAID, he alleges no conduct by PAID that violated his procedural due-process rights, or any other facts in support of such a claim.)
With respect to the first element of a procedural due-process claim, there is no dispute that ownership of real property is a property interest protected by the Fourteenth Amendment. But "[i]t does not suffice to say that a litigant holds property. The inquiry also must focus on the dimensions of that interest." O'Bannon v. Town Court Nursing Center, 447 U.S. 773, 796, 100 S.Ct. 2467, 65 L.Ed.2d 506 (1980) (Blackmun, J., concurring).
Here, contrary to his contentions, Sterling did not have an unconditional interest in the property. Under the terms of the Redevelopment Agreement, which Sterling agreed to "assume and perform" when he signed the Amendatory Agreement (Amendatory Agreement ¶ 2), in the event that Sterling, "in the opinion of the [RDA], fail[ed] to prosecute the work upon the Premises vigorously with such force of workmen and mechanics as shall be satisfactory to the [RDA]" (Redevelopment Agreement ¶ 5.1(5)), or otherwise defaulted, the RDA could, after proper notice and an opportunity on the part of Sterling to cure the default, "enter into the Premises or any appurtenant easement and, by this entry terminate the estate ... and revest title to the Premises or any appurtenant easement in the [RDA] absolutely" (id. ¶ 5.5).
Sterling correctly points out that the deed from PAID conveying title in the property to Sterling contained no reference to any conditions subsequent or the RDA's right of re-entry.
Thus, rather than holding a fee simple in the property, Sterling held a fee simple subject to a condition subsequent. Accordingly, Sterling could have no reasonable expectation of any interest in the property once he failed to develop it within the time period specified in the Redevelopment Agreement, or otherwise defaulted under the agreement, because the RDA could exercise its right of re-entry.
There is no dispute here that Sterling did not fulfill his development obligations under the agreement. And the RDA, as required by the Redevelopment Agreement, provided notice to Sterling of his default on April 25, 2006, in which it advised him that if he did not cure his default within sixty days, the RDA would pursue its remedies, including its right to re-enter the property.
Accordingly, this procedural due-process claim against the RDA (and PAID) must fail.
Sterling also claims that the RDA's subsequent sale of the property to Crane Arts, without notice, violated his right to procedural due process. This claim must similarly fail, because Sterling has failed to identify a property interest of which he was deprived by the sale of the property. Indeed, at the time of the sale, the RDA was the owner of the property, the RDA having lawfully and properly exercised its right of re-entry and deeded the property back to itself, as discussed in more detail
Because neither the RDA nor PAID deprived Sterling of a protected property interest (and because Sterling's claims relating to the RDA's transfer of the property back to itself are time-barred in any event), I will grant summary judgment in favor of the RDA and PAID as to Sterling's procedural due-process claims.
Sterling also claims that the RDA and PAID violated the substantive component of the due-process clause.
The "core" of the concept of substantive due process has long been understood "to be protection against arbitrary action," County of Sacramento v. Lewis, 523 U.S. 833, 845, 118 S.Ct. 1708, 140 L.Ed.2d 1043 (1998), and the Supreme Court has repeatedly emphasized that "only the most egregious official conduct can be said to be `arbitrary in the constitutional sense,'" id. at 846, 118 S.Ct. 1708 (quoting Collins v. City of Harker Heights, 503 U.S. 115, 129, 112 S.Ct. 1061, 117 L.Ed.2d 261 (1992)). To that end, the Supreme Court has described the "cognizable level of executive abuse of power as that which shocks the conscience." Lewis, 523 U.S. at 846, 118 S.Ct. 1708. Thus, to sustain a substantive due-process claim, "a plaintiff must prove [that] the particular interest at issue is protected by the substantive due process clause and [that] the government's deprivation of that protected interest shocks the conscience." Chainey v. Street, 523 F.3d 200, 219 (3d Cir.2008).
Sterling claims that the reverter deed issued by the RDA was unlawful and that it was not a proper remedy for his default. He claims that David Auspitz, the chairman of the zoning board, was interested in his property and put pressure on Vincent Dougherty, an assistant director of the City's Commerce Department and "the City's point person for economic development in the American Street Corridor" (RDA's Reply Br. Ex. JJ), who in turn pressured the RDA to issue the reverter deed. He claims that the RDA, in deeding the property back to itself, ignored the advice of counsel, and contends that the actions of those involved reflect "a brazen disregard of the law and self-dealing" in violation of the substantive due-process clause (Pl.'s Resp. to RDA at 21.)
The first question is whether Sterling's claim asserts a property interest protected by the substantive due-process clause. In analyzing Sterling's procedural due-process claim, I concluded that because Sterling had only a conditional interest in the property — a fee simple subject to a condition subsequent — the RDA's exercise of its right of re-entry did not deprive Sterling of a protected property interest and Sterling thus was not constitutionally entitled to a hearing or other process before the RDA exercised its right of re-entry. But to the extent that the RDA's re-entry was, as Sterling alleges here, arbitrary and improper, it arguably implicates his ownership interest in the property, an interest that is clearly subject to substantive due-process protection. See DeBlasio v. Zoning Bd. of Adjustment, 53 F.3d 592, 601 (3d Cir.1995) ("[O]ne would be hard-pressed to find a property interest more worthy of substantive due process protection than ownership."), abrogated on other grounds, United Artists Theatre Circuit, Inc. v. Township of Warrington, 316 F.3d 392 (3d Cir.2003).
Nonetheless, Sterling's claim fails because he cannot satisfy his burden, under the second part of the test, of presenting evidence from which a jury could reasonably find that the RDA engaged in the sort
There is no dispute that Sterling failed to develop the property within the time specified in the Redevelopment Agreement and was in default of the agreement. And contrary to Sterling's contentions, there was nothing improper or unlawful about the RDA's exercise of its right of re-entry or its execution of the deed transferring the property back to itself. Sterling makes two arguments — neither to any avail — as to why the reverter deed was unlawful.
Sterling contends first that he did not appoint the RDA as his attorney and thus that the RDA had no authority to execute the deed as his attorney in fact and convey the property back to itself. But paragraph 5.7 of the Redevelopment Agreement expressly grants the RDA a power of attorney. By entering into the Amendatory Agreement, and thereby agreeing to "assume and perform all of the terms and conditions[,] obligations and requirements contained in the Redevelopment Agreement" (Amendatory Agreement ¶ 2), Sterling irrevocably appointed the RDA his "true and lawful attorney[] ... to enter into and take possession of the Premises and appurtenant easements ... and to grant, bargain and sell the same or any part thereof, ... and to make, execute, acknowledge and delivery good and sufficient deeds and conveyances for the same" (Redevelopment Agreement ¶ 5.7). Moreover, contrary to Sterling's suggestion, this power of attorney was properly executed — not only was the Amendatory Agreement signed and dated by Sterling, as required by 20 Pa. Cons.Stat. Ann. § 5601(b), but it was also witnessed and notarized.
Sterling next contends that the RDA could not properly declare him in default of the Redevelopment Agreement or pursue any remedies against him, because the agreement "restricts legal default to `parties'" and he was not a party to the agreement and "was not in privity of contract" with the RDA.
There is no merit to Sterling's argument that the RDA could not declare him in default or pursue any remedies against him. While Sterling is correct that PAID remained liable to the RDA under the Redevelopment Agreement, it does not follow that the RDA's only remedies were against PAID. On the contrary, by entering into the Amendatory Agreement with the RDA and PAID and thereby agreeing to assume, as PAID's assignee,
Moreover, paragraph 6.15 of the Redevelopment Agreement provides that "[t]his agreement shall be binding upon and inure to the benefit of the parties hereto, their successors and assigns, including ... any transferee of the Redeveloper," and further provides that "any reference to the [RDA] or the Redeveloper in this Agreement shall include reference to their respective successors, assigns and transferees, unless the contrary is explicitly provided." Thus, although Sterling was not an original party to the Redevelopment Agreement, as PAID's assignee he was considered a party to the agreement, and the default provisions, including paragraph 5.2 (providing for notice of default), applied to him.
There is thus no reason that the RDA could not exercise its power of attorney and right of re-entry and execute a deed transferring the property back to itself. And the RDA's legal department ultimately reached this same conclusion. (See Pl.'s Resp. to RDA Ex. I (e-mail from Hope Yusem (June 29, 2006, 3:25 p.m.)).)
Moreover, even assuming that David Auspitz's interest in Sterling's property influenced the RDA and that the RDA's decision to declare Sterling in default of the Redevelopment Agreement and to exercise its right of re-entry was based on an improper motive, as Sterling contends, the Third Circuit has made it clear that "merely alleging an improper motive is insufficient [for purposes of the "shocks the conscience" standard], even where the motive is unrelated to the merits of the underlying decision." Chainey, 523 F.3d at 220; cf. United Artists Theatre Circuit, 316 F.3d at 400 (describing the "improper motive" test as "less demanding" than the "shocks the conscience" standard). Indeed, in cases such as this one, the Third Circuit has failed to find conscience-shocking behavior in the absence of allegations of corruption, self-dealing, bias against an ethnic group, or similar facts. See Eichenlaub
Because a jury could not reasonably find that the RDA engaged in the sort of egregious conduct that would "shock the conscience," Sterling's substantive due-process claim against the RDA must fail. And, as previously discussed, this claim is time-barred in any event. Accordingly, I will grant summary judgment in favor of the RDA as to this claim.
Finally, Sterling claims that PAID's failure to return the money that Sterling paid for the property, after the RDA deeded the property back to itself, "shocks the conscience" and violated his rights to substantive due process. The problem, however, is that Sterling has asserted no basis for his contention that PAID should have returned the money. It was the RDA, not PAID, that reclaimed the property. And nothing in the Amendatory Agreement that Sterling entered into with the RDA and PAID requires PAID to compensate Sterling in the event that the RDA exercises its right of re-entry. Moreover, even if the agreement did require PAID to compensate Sterling, any claim that Sterling had against PAID for its failure to compensate
Sterling's substantive due-process claim against PAID must therefore fail, and I will grant summary judgment in favor of PAID as to this claim.
Next, Sterling asserts breach-of-contract claims against the RDA and PAID.
Sterling claims that the RDA breached paragraph 3.6 of the Redevelopment Agreement, under which the RDA agreed to assist him in securing any permits, licenses, approvals, and variances required for his development of the property. And he contends that because of difficulties in obtaining the necessary permits and approvals, he was unable to develop the property within the eighteen-month time period specified in the Redevelopment Agreement.
The RDA argues that Sterling's claim must fail and that it is entitled to summary judgment because Sterling never asked the RDA for assistance — the RDA contends that any requests by Sterling for help were directed to the City of Philadelphia.
Because I conclude that the Redevelopment Agreement is ambiguous as to whether the RDA had an affirmative duty to provide assistance even in the absence of a request by Sterling for assistance, and "thus presents a question of interpretation for a jury," Am. Eagle Outfitters v. Lyle & Scott Ltd., 584 F.3d 575, 587 (3d Cir.2009),
"The paramount goal of contractual interpretation is to ascertain and give effect to the intent of the parties." Morningstar v. Hallett, 858 A.2d 125, 129 (Pa.Super.Ct.2004). "Where the meaning of a written contract is clear and unambiguous, its interpretation and construction are for the court, not the jury." Hewes v. McWilliams, 412 Pa. 270, 194 A.2d 339, 342 (1963). But "where the language chosen by the parties is ambiguous, deciding the intent of the parties becomes a question of fact for a jury." Am. Eagle Outfitters, 584 F.3d at 587 (citing Cmty. Coll. of Beaver Cnty. v. Cmty. Coll. of Beaver Cnty., Soc'y of the Faculty, 473 Pa. 576, 375 A.2d 1267, 1275 (1977)).
Thus, as a preliminary matter, a court must determine, as a matter of law, whether the terms of a contract are clear or ambiguous. See id. "A contract is ambiguous if it is reasonably susceptible of different constructions and capable of being understood in more than one sense." Hutchison v. Sunbeam Coal Corp., 513 Pa. 192, 519 A.2d 385, 390 (1986). In determining whether a contract is ambiguous, the meaning of the contract's language should not be distorted, and "a court must not rely upon a strained contrivancy" to establish an ambiguity. Steuart v. McChesney, 498 Pa. 45, 444 A.2d 659, 663 (1982).
In this case I cannot conclude that the Redevelopment Agreement, as the RDA implicitly argues, unambiguously imposes on the RDA an obligation to assist Sterling only in the event that Sterling asks for assistance. The relevant provision reads as follows:
(Redevelopment Agreement ¶ 3.6.) Although the RDA's interpretation is not unreasonable, the provision could also be interpreted, contrary to the RDA's contention, to impose on the RDA an affirmative obligation to assist the Redeveloper in securing the necessary permits even in the absence of a request by the Redeveloper for such assistance.
Given this ambiguity, I must deny the RDA's motion for summary judgment; it is for the jury to interpret the Redevelopment Agreement and determine the scope of the RDA's duty to provide assistance.
Sterling claims that PAID breached an implied contract to assist him; he claims that to induce him to enter into the Amendatory Agreement, PAID promised to assist him in obtaining City contracts as
Even assuming, for purposes of PAID's summary-judgment motion, that an implied contract exists, Sterling's claim must fail because he never built his masonry business on the property and there is no evidence that he hired workers from the area or bid on any City contracts. I will therefore grant summary judgment in favor of PAID as to this claim.
Sterling lastly asserts a claim against the RDA for the common-law tort of conversion.
"[C]onversion is the deprivation of another's right of property in, or use or possession of, a chattel, or other interference therewith, without the owner's consent and without lawful justification." Stevenson v. Econ. Bank of Ambridge, 413 Pa. 442, 197 A.2d 721, 726 (1964) (emphasis added).
Here, Sterling claims that the RDA unlawfully took, or converted, his property, arguing that the "reverter" deed was unlawful. This claim must fail, however, because real property cannot be the subject of an action for conversion. See 18 Am. Jur.2d Conversion § 15; 90 C.J.S. Trover and Conversion § 17; cf. Norriton East Realty Corp. v. Central-Penn. Nat'l Bank, 435 Pa. 57, 254 A.2d 637 (1969) (asserting that if gas ranges, air conditioners, and refrigerators in apartment building were fixtures and part of the real estate, they could not be the subject of an action for conversion).
Apparently conceding that the tort of conversion does not apply to real property, Sterling now argues that the RDA's deeding of the property back to itself constituted theft. But his claim fares no better under this reasoning, because there is no private cause of action for theft. See Schwartz v. Steven Kramer & Assocs., No. 90-4943, 1995 WL 3673 (E.D.Pa. Jan. 4, 1995) (finding no private causes of action for forgery or theft under Pennsylvania law); Waye v. First Citizen's Nat'l Bank, 846 F.Supp. 310, 320 (M.D.Pa. 1994) (explaining that "`[t]heft' refers to criminal conduct governed by statutory law found at 18 Pa. Cons.Stat. Ann. chap. 39").
In any event, there is no merit to Sterling's claim. As discussed in connection with his due-process claims, there was nothing unlawful or improper about the RDA's exercise of its right of re-entry or its execution of the deed transferring the property back to itself.
Finally, the RDA has submitted a motion to exclude the report and testimony of Sterling's damages expert, Bradley R. Ryden.
The admissibility of expert testimony is governed by Federal Rule of Evidence 702, which provides as follows:
Fed.R.Evid. 702. As the Third Circuit has explained, the Federal Rules of Evidence "embody a strong and undeniable preference for admitting any evidence which has the potential for assisting the trier of fact," and Rule 702 "has a liberal policy of admissibility." Kannankeril v. Terminix Int'l, Inc., 128 F.3d 802, 806 (3d Cir.1997). Nonetheless, "Rule 702 embodies three distinct substantive restrictions on the admission of expert testimony: qualifications, reliability, and fit," Elcock v. Kmart Corp., 233 F.3d 734, 741 (3d Cir.2000), and a district court must act as a "gatekeeper" to ensure that evidence presented by expert witnesses meets these requirements, Schneider ex rel. Estate of Schneider v. Fried, 320 F.3d 396, 404 (3d Cir.2003); see also Daubert v. Merrell Dow Pharm., Inc., 509 U.S. 579, 589, 113 S.Ct. 2786, 125 L.Ed.2d 469 (1993) ("[T]he trial judge must ensure that any and all scientific testimony or evidence admitted is not only relevant, but reliable."). The burden is on the proponent of the evidence — in this case Sterling — to establish admissibility by a preponderance of the evidence. See Padillas v. Stork-Gamco, Inc., 186 F.3d 412, 418 (3d Cir.1999).
Here, in seeking to exclude Ryden's report and testimony, the RDA challenges the assumptions or factual basis underlying Ryden's analysis.
Ryden calculated Sterling's economic loss as the difference between his projected net income had he developed the property and his actual net income from his existing masonry business, for 2006 through 2010. (See RDA's Mot. to Exclude the Report & Testimony of Bradley R. Ryden, CPA ("RDA's Mot. to Exclude") Ex. A ("Ryden Report").) Using two sets of revenue projections (a "low end" and a "high end"), Ryden estimated Sterling's lost income over this five-year period to be between $100,705 and $328,428. (See id. Sched. 1.) The problem, according to the RDA, is that Ryden based his revenue projections solely on Sterling's estimates as to the amount of revenue his business could have generated had he been able to obtain the necessary permits and approvals and develop the property.
"As a general rule, the factual basis of an expert opinion goes to the credibility
Similarly, here, Ryden testified that he relied solely on Sterling's estimates of projected revenue (see RDA's Mot. to Exclude Ex. B, Dep. of Bradley Ryden (May 20, 2011) ("Ryden Dep.") at 10:22-11:4), and because these estimates are merely speculative, and have no factual basis, Ryden's report and testimony must be excluded.
At the low end, Sterling estimated his projected revenue, had he been able to develop the property, to be $150,000 in 2006, $250,000 in 2007, $300,000 in 2008, $300,000 in 2009, and $350,000 in 2010. At the high end, he estimated his projected revenue to be $250,000 in 2006, $400,000 in 2007, $500,000 in 2008, $500,000 in 2009, and $550,000 in 2010. By comparison, Sterling's actual revenue for his existing masonry business was $50,415 in 2006, $159,696 in 2007, $235,125 in 2008, $86,793 in 2009, and $46,239 in 2010. (See Ryden Report Sched. 4.)
According to Ryden's report, Sterling's revenue projections were based on several assumptions. First, Sterling told Ryden that "the new site would have provided better access for the trucks" and that "the new set-up would have been much more efficient than the operations he had and currently has." (Id. at 2.) Second, Sterling "stated that he would have made an agreement with the City of Philadelphia and PIDC and become one of their sponsored contractors," which would have "increased his business significantly." (Id.) He explained that a City ordinance required the City to hire a certain percentage of minority contractors for City construction projects, and he "was certain he would [have been] able to increase his business significantly, if the [C]ity of Philadelphia had assisted him as promised." (Id.) Sterling suggested that he was not currently benefiting from the minority-contracting requirement because he "was forced to operate out of a rental facility that was inadequate." (Id.) Third, Sterling told Ryden that "between approximately 2003 and 2006, the [C]ity of Philadelphia (particularly American Street) experienced a building boom," and Sterling believed that "he would have received multiple jobs through that time period, thus increasing his revenue." (Id.) Sterling suggested to Ryden that "he
Sterling has adduced no evidence to support his assumptions and projections, however, and Ryden did not independently investigate their reasonableness. Ryden testified, for example, that he did not inspect Sterling's current facility or the property on American Street. (Ryden Dep. 16:20-17:2.) Nor was Ryden aware of the number of minority contractors performing masonry work in the City of Philadelphia (id. at 14:17-24), or the number of jobs that the City funded during this period (id. at 15:1-3). Although Ryden attempted to conduct an investigation regarding Wm. Proud Masonry, he testified that he was unable to find any useful information and that he was unable to verify how much business the company was doing or its income. (Id. at 28:19-30:14.)
Moreover, when asked whether the economy had had any effect on Sterling's revenue in 2009 and 2010 — Sterling's revenue decreased from $235,125 in 2008 to $86,793 in 2009 and $46,239 in 2010, but Sterling nonetheless projected revenue of $300,000 in 2009 and $350,000 in 2010 at the low end — Ryden replied, "I don't know [the] answer to that." (Id. at 24:14-25:1.) He said that he had asked Sterling why his revenue had decreased and that Sterling had explained that "he was very distraught over this situation and really didn't work that hard to find work." (Id. at 25:2-8.)
Sterling's estimates as to the revenue he would have generated had he been able to develop the property are based on nothing more than optimistic speculation. Even assuming that there is merit to Sterling's assumptions that his development of the property would have allowed him to generate additional revenue, he has offered no evidence to support the magnitude of his projected increases. And Ryden's unqualified acceptance of Sterling's projections without verification or investigation renders his opinion too speculative to offer any assistance to the jury. I will therefore grant the RDA's motion to exclude Ryden's report and testimony.
For the reasons set forth above, I will grant the RDA's motion for summary judgment as to the section 1983 and conversion claims against it, but I will deny its motion as to the breach-of-contract claim against it, and I will grant PAID's motion for summary judgment as to all claims against it. I will also grant the RDA's motion to exclude the report and testimony of Ryden regarding damages. An appropriate order accompanies this memorandum.
1. The RDA's motion for summary judgment is
2. PAID's motion for summary judgment is
3. The RDA's motion to exclude the report and testimony of Bradley R. Ryden is
4. PAID's motion to exclude the report and testimony of Bradley R. Ryden is
5. Trial in this matter is scheduled for February 21, 2012, at 10:00 a.m.
The RDA and PAID also argue that Sterling's section 1983 claims are barred by Monell v. Department of Social Services, 436 U.S. 658, 98 S.Ct. 2018, 56 L.Ed.2d 611 (1978). Because I conclude that Sterling's claims fail on the merits, I do not address whether they are also barred by Monell.
(Redevelopment Agreement ¶ 5.2.)
Sterling's right to compensation, to the extent that he has such a right in the event that the Redevelopment Authority exercises its right of re-entry, is governed by paragraph 5.8 of the Redevelopment Agreement, which requires the RDA, upon exercising its right of re-entry, to use its best efforts to resell the property and provides that the proceeds of such a sale shall be applied "first, to reimburse the [RDA] ... for all costs and expenses incurred" and "second, to reimburse the Redeveloper up to the amount equal to the sum of the purchase price paid by it for the Premises... and the monies actually invested by it in making any of the improvements on the Premises or part thereof, less any gains or income withdrawn or made by it from this Agreement." (Redevelopment Agreement ¶ 5.8.) As discussed above, however, such contract rights are not entitled to substantive due-process protection.