Savage, District Judge.
Plaintiff Allstate Vehicle and Property Insurance Company filed this subrogation action against defendant Philadelphia Housing Authority ("PHA") for damages sustained to its insured's home caused by a fire that originated in an adjacent vacant building owned by the PHA. Moving to dismiss the complaint, the PHA argues that, as a Commonwealth agency, it is entitled to immunity under the Pennsylvania Sovereign Immunity Act, 42 Pa.C.S. § 8521. Allstate admits that the PHA is a Commonwealth agency, but contends that the real estate exception, 42 Pa.C.S. § 8522(b)(4), applies, exposing the PHA to liability for the damage to the Torres property.
Because the fire was caused by a trespasser and not by an artificial condition or a defect of the PHA's real estate, the exception does not apply. Therefore, we shall grant the motion.
On January 14, 2018, a fire occurred at 1420 North 7th Street, in Philadelphia, Pennsylvania, a vacant property owned by the PHA.
In its amended complaint, Allstate alleges that the PHA property had been vacant and abandoned since 2005, allowing vagrants to squat there.
In 2012, the Department of Licensing and Inspections ("L&I") issued a violation under Philadelphia Property Maintenance Code 302.2/4, for failure to clean and maintain the lot.
On January 14, 2018, a fire started in the kitchen area of the property. According to the amended complaint, the "Fire Marshal opined that the fire was caused by a vagrant who had been known to stay freely" at the property.
Asserting a negligence claim, Allstate alleges that had the original property been safe and secure or properly demolished, the fire would not have occurred.
Although immunity is an affirmative defense, a complaint may be dismissed
The Pennsylvania Sovereign Immunity Act granted the Commonwealth and its agencies
Under the real estate exception, a Commonwealth agency may be liable for injury caused by "a dangerous condition of Commonwealth agency real estate" which causes injury. 42 Pa.C.S. § 8522(b)(4). A plaintiff "must allege that the dangerous condition derived, originated or had as its source the Commonwealth realty itself, if it is to fall within the Sovereign Immunity Act's real estate exception." Jones v. SEPTA, 772 A.2d at 443 (internal citations omitted). "In other words, ... the Commonwealth may not raise the defense of sovereign immunity when a plaintiff alleges, for example, that a substance or an object on Commonwealth realty was the result of a defect in the property or in its
A plaintiff seeking to invoke the exception must establish that (1) he could, absent immunity, recover damages from the person who caused the injury; and (2) the injury was caused by the agency's negligence, rendering the property unsafe for its intended use and creating a dangerous condition or defect in the real estate which causes the injury. Snyder v. Harmon, 522 Pa. 424, 562 A.2d 307, 312 (1989); Williams v. Phila. Hous. Auth., 873 A.2d at 85-86; Mascaro, 523 A.2d at 1123.
As to the first requirement, Allstate has stated a cause of action against PHA for negligence in allowing its property to fall into a state of disrepair, rendering it unsafe and dangerous. See Sections 364 and 448 of the Restatement of Torts (Second). Pennsylvania courts have consistently "held landowners liable for failing to take precautions against unreasonable risks that stem directly or indirectly from the property including the contemplated acts of third parties, whose crimes are facilitated by the condition of the property." Mascaro, 523 A.2d at 1122 (collecting cases).
Allstate alleges that the fire was caused by a vagrant who was known to squat in the PHA's dilapidated and unsecured property.
As alleged in the complaint, PHA was negligent in permitting its property to fall into disrepair, creating an unreasonable risk to the adjacent property, specifically the predictable acts of a third party. Therefore, Allstate has stated a cause of action maintainable at common law against PHA absent its having immunity.
Allstate has not satisfied the second requirement. The amended complaint avers that the fire was caused by a trespasser, and it does not link the cause of the fire to any act or failure to act on PHA's part. Allstate alleges that the fire originated in the PHA property. It avers that the fire was caused by a vagrant in the kitchen area. It does not describe how the fire started or what the vagrant did.
The allegations, viewed in the light most favorable to Allstate, do not satisfy the real estate exception. As the PHA correctly argues, the fire did not derive, originate, or have as its source the PHA-owned real estate itself.
In Mascaro, the Pennsylvania Supreme Court reasoned that the legislature "clearly precluded the imposition of liability on itself or its local agencies for the acts of third parties by its language of § 8541, ... and that it has not seen fit to waive immunity for these actors or their acts in any of the eight exceptions." 523 A.2d at 1124. It considered its reasoning as "consistent with the general rule that the criminal and negligent acts of third parties are superseding causes which absolve the original actor ... of the harm caused by such third parties." Id.
The Pennsylvania Supreme Court, in Jones, concluded that the legislature's
That is not what is alleged. PHA's failure to act—including its failure to secure the property—did not cause the fire. Nor did any substance, object, or defect in the property construction, maintenance, repair, or design. Rather, the amended complaint avers that the fire was caused by a trespasser and does not link the origin of the fire to any act or failure to act on PHA's part.
At most, Allstate claims that the condition of PHA's property facilitated the damage caused by the trespasser. The acts of a third party, rather than the agency, causing harm do not subject the agency to liability. Mascaro, 523 A.2d at 1124. The real estate exception applies "only where it is alleged that `the artificial condition or defect of the land itself causes the injury, not merely when it facilitates the injury by the acts of others, whose acts are outside the statute's scope of liability." Brewington for Brewington v. City of Phila., ___ Pa. ___, 199 A.3d 348, 360 (2018) (quoting Mascaro, 523 A.2d at 1124). To invoke the real estate exception, a plaintiff must allege that the condition or defect on the property caused the injury, not just facilitated it by the act of another. Mascaro, 523 A.2d at 1124; Dean v. Dep't of Transp., 561 Pa. 503, 751 A.2d 1130, 1134 (2000). Allstate has not done so.
Leave to amend should be freely given. Fed. R. Civ. P. 15(a)(2). Leave ordinarily should be granted absent a substantial reason to deny. Fraser v. Nationwide Mut. Ins. Co., 352 F.3d 107, 116 (3d Cir. 2003); Shane v. Fauver, 213 F.3d 113, 115-17 (3d Cir. 2000). We cannot conclude at this stage that amendment would be futile.
Allstate has not alleged that the PHA's real estate caused the fire that damaged its insured's property. Hence, the PHA is immune from liability.
Some courts have concluded that the PHA is a local governmental agency and not a Commonwealth agency, but not in the context of sovereign immunity under 42 Pa.C.S. § 8521. See, e.g., James J. Gory Mech. Contracting, Inc. v. Phila. Hous. Auth., 579 Pa. 26, 855 A.2d 669, 678-79 (2004) (finding PHA a local agency for jurisdictional purposes); Swift v. McKeesport Hous. Auth., No. 08-0275, 2009 WL 3856304, at *7 (W.D. Pa. Nov. 17, 2009) (holding the local housing authority as a municipality to be a local governmental agency and therefore not entitled to Eleventh Amendment immunity from suit in federal court).
Whether the PHA is a Commonwealth agency under the Sovereign Immunity Act or a local agency under the Political Subdivisions Tort Claims Act is a distinction without a difference in this case. Both Acts have similar real estate exceptions. Williams v. Phila. Hous. Auth., 873 A.2d 81, 85-86 & n.9 (Pa. Commw. Ct. 2005); see also 42 Pa.C.S. §§ 8522(b)(4), 8542(b)(3).
The report noted that the property was "squatter occupied" and "PHA housing." Additionally, the Fire Marshal's investigation revealed that a squatter named Mary lived there and was present on the night of the fire. A neighbor reported that Mary had requested a bucket of water from him and returned to the property. The neighbor also stated that when the Philadelphia Fire Department arrived 20 minutes later, Mary was no longer at the scene. The Fire Marshal remarked that he was "unable to conduct a full investigation due to structural collapse." He ultimately ruled the cause of the fire was "undetermined."
Even though we do not consider the contents of the report, we reference it here to show how it bears on futility. Unless Allstate has information beyond the report, it cannot state a claim based on the real estate exception.
