Cornell Narberth, LLC v. Borough of Narberth

IN THE COMMONWEALTH COURT OF PENNSYLVANIA

Cornell Narberth, LLC, :

Appellant :

:

v. : No. 1577 C.D. 2016

: Argued: May 1, 2017

Borough of Narberth, Montgomery :

County, Pennsylvania and Yerkes :

Associates, Inc., C. O'Brien :

Architects, Inc. and Cheryl A. O'Brien :

BEFORE: HONORABLE MARY HANNAH LEAVITT, President Judge

HONORABLE RENÉE COHN JUBELIRER, Judge

HONORABLE MICHAEL H. WOJCIK, Judge

OPINION

BY PRESIDENT JUDGE LEAVITT FILED: July 14, 2017

Cornell Narberth, LLC (Cornell) appeals an order of the Court of

Common Pleas of Montgomery County (trial court) granting summary judgment to

the Borough of Narberth (Borough) and its building inspector, Yerkes Associates,

Inc. (Yerkes). Cornell argues that the trial court erred by finding that its breach of

contract, promissory estoppel, and negligent misrepresentation claims were barred

by the governmental immunity provisions under the act commonly known as the

Political Subdivision Tort Claims Act (Tort Claims Act), 42 Pa. C.S. §§8541-8542,

and the related official immunity provisions.1 Cornell also argues that the trial

1

Section 8541 of the Tort Claims Act provides: “[e]xcept as otherwise provided in this

subchapter, no local agency shall be liable for any damages on account of any injury to a person

or property caused by any act of the local agency or an employee thereof or any other person.”

42 Pa. C.S. §8541. Section 8545 of the Judicial Code further provides: “[a]n employee of a local

agency is liable for civil damages on account of any injury to a person or property caused by acts

of the employee which are within the scope of his office or duties only to the same extent as his

employing local agency and subject to the limitations imposed by this subchapter.” 42 Pa. C.S.

§8545.

court erred in holding that its evidence was insufficient to survive summary

judgment on its equal protection claim. For the following reasons, we affirm.

Background

Cornell, a real estate developer, applied to the Borough for building

permits to construct detached single-family homes on a four-lot subdivision known

as Narberth Arbors. Before submitting the permit applications, Cornell’s

representatives met with William Martin, the Borough manager, and Robert

Loeper, a representative of Yerkes, which does building inspections for the

Borough, to discuss the construction of the residences. The Borough informed

Cornell that the local ordinances did not require installation of an automatic

sprinkler system in a detached single-family residence.

Thereafter, Cornell submitted construction drawings to Yerkes

showing that the homes would be built with pre-engineered wood roof trusses and

would not have automatic sprinklers. Third Amended Complaint ¶13; Reproduced

Record at 1286a (R.R. ___). Yerkes reviewed and approved the drawings. The

Borough then issued building permits for each residence. The permits, which did

not mention sprinklers, were issued “subject to the provisions of the Borough

Ordinances.” Id., Exhibit A; R.R. 1305a. Cornell paid the required fees associated

with the permits and began construction.

A representative from Yerkes visited the site regularly and inspected

each stage of the construction. Third Amended Complaint ¶20; R.R. 1287a. At no

time during these inspections did anyone from Yerkes inform Cornell that it was

required to install automatic sprinklers. Id., ¶21; R.R. 1287a. After Cornell

completed the Lot 1 residence, Yerkes did a final inspection and notified the

Borough to issue a certificate of occupancy. Id., ¶23; R.R. 1287a.

2

The Borough refused to issue the certificate of occupancy because

Cornell had not installed automatic sprinklers, which are required for homes

constructed with pre-engineered wood roof trusses. By letter dated September 15,

2010, Martin, the Borough manager, informed Cornell that the sprinkler systems

were required under Ordinance No. 843, the Fire Prevention Code (Fire Code),

which provides in pertinent part:

(1) All new construction except single family detached and

single family semi-detached dwellings located within the

Borough will be equipped with full sprinkler systems.

a. Exception: if a single family detached or

single family semi-detached dwelling is

constructed with wooden truss floors or roof

supports the structure must be sprinklered.

Third Amended Complaint, Exhibit B, at 1; R.R. 1311a.

Martin’s letter further explained that “[a]lthough the Borough has

adopted the Uniform Construction Code (“UCC”),[2] the provisions of the UCC do

2

34 Pa. Code §§401.1-405.42. By way of background, in 1999, the Pennsylvania General

Assembly enacted the Pennsylvania Construction Code Act (Act), Act of November 10, 1999,

P.L. 491, as amended, 35 P.S. §§7210.101-7210.1103, to establish uniform and modern

construction standards throughout the Commonwealth. See Section 102 of the Act, 35 P.S.

§7210.102. The Act authorized the Department of Labor and Industry (Department) to

promulgate regulations, and the Department did so on April 12, 2002, and January 9, 2004. See

Section 105 of the Act, 35 P.S. §7210.105. These regulations are known as the Uniform

Construction Code (UCC).

The Act required municipalities to adopt the UCC as their municipal building code within

90 days after the promulgation of the UCC. Section 501(a) of the Act, 35 P.S. §7210.501(a).

Further, the Act provides that the UCC preempts any construction standards established in local

ordinances that are different from those in the UCC. Section 104(d) of the Act, 35 P.S.

§7210.104(d). However, local ordinances, in certain circumstances, may supplement the rules in

the UCC. Section 303(b) of the Act, 35 P.S. §7210.303(b) (“Municipal building code ordinances

in effect on July 1, 1999 … which contain provisions which equal or exceed the specific

(Footnote continued on the next page . . .)

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not supersede ordinances in effect on July 1, 1999 with provisions which equal or

exceed the specific requirements of the UCC.” Id.; R.R. 1311a. The letter

acknowledged that Cornell’s building permits were issued in error and stated that

“[i]f the violation [of the Fire Code] is not corrected immediately, the Borough will

consider all appropriate remedies available, including revocation of the previously

issued building permits.” Id. at 2; R.R. 1312a.

Yerkes refused to inspect the remaining residences in the subdivision

until Cornell installed automatic sprinkler systems. As a result, the construction on

Lots 2, 3, and 4 was halted, which “jeopardiz[ed] closings on the Lot 3 and 4

[r]esidences.” Third Amended Complaint ¶35; R.R. 1289a. One couple “sold their

home in reliance on being able to move into their completed [r]esidence and was

thereafter forced to lease-back their prior residence.” Id., ¶39; R.R. 1290a.

Similarly, the Lot 1 purchaser had no place to live as a result of the Borough’s

refusal to issue a certificate of occupancy for that residence. Id., ¶36; R.R. 1289a.

Cornell alleges that as a result of the actions of the Borough and Yerkes, it “had no

other option but to install the sprinkler systems in the [r]esidences, or face breach

of its agreements with the [purchasers].” Id., ¶45; R.R. 1291a. Cornell alleges its

damages include, but are not limited to, the costs of installing the sprinklers and

relocating the purchasers of the residences to other housing units. Id., ¶48-50; R.R.

1291a.

(continued . . .)

requirements of the regulations promulgated under this act shall remain in effect until such time

as any such provisions fail to equal or exceed the minimum requirements of the regulations

promulgated under this act….”). In 2004, the Borough of Narberth adopted the UCC as its

municipal building code while retaining its ordinances in effect in 1999, including the Fire Code,

that had stricter standards. Complaint, Exhibit D, at 2; R.R. 47a.

4

Cornell’s third amended complaint3 contained five counts: (1) breach

of contract against the Borough and Yerkes; (2) promissory estoppel against the

Borough and Yerkes; (3) negligent misrepresentation against Yerkes; (4) violation

of the equal protection clause of the U.S. Constitution under 42 U.S.C. §1983

against the Borough and Yerkes; and (5) violation of the equal protection clause of

the Pennsylvania Constitution.4 Yerkes then filed a joinder complaint against C.

O’Brien Architects, Inc., and its principal, Cheryl O’Brien, alleging negligent

misrepresentation.

The parties engaged in discovery, which included depositions of

Martin, Loeper, and Frederick Hansell, the Borough’s Assistant Manager. At the

conclusion of discovery, the Borough and Yerkes filed motions for summary

judgment, on which the trial court heard oral argument.

In support of its motion for summary judgment, the Borough argued

that “despite being couched as contractual or quasi-contractual claims,” the

allegations in Cornell’s complaint were “clearly based upon negligence” and, thus,

barred by the Tort Claims Act. Borough Motion for Summary Judgment ¶33; R.R.

2483a-84a. The Borough also argued that the complaint did not state an equal

protection claim under 42 U.S.C. §1983 because its assertion “is unproven at the

end of discovery.” Id., ¶35; R.R. 2484a.

3

Initially, Cornell filed a complaint in mandamus and a petition seeking preliminary injunctive

relief. During the course of the litigation, Cornell amended the complaint three times and elected

to withdraw its request for mandamus relief.

4

In ruling on the Borough and Yerkes’ preliminary objections to Cornell’s complaint, the trial

court dismissed Cornell’s equal protection claim under the Pennsylvania Constitution. That

claim is no longer at issue.

5

Yerkes argued that it acted as the Borough’s employee in its capacity

as the appointed building inspector; therefore, it was immune from liability under

the Tort Claims Act. In support, Yerkes cited the deposition testimony of Martin,

who testified:

[Question]: From the time that Yerkes was appointed as the

Narberth Borough code official prior to 2010, until the present

they have always been acting in the capacity as the appointed

Narberth Borough code official?

[Martin]: Yes, they have.

[Question]: And with respect to all of the services that they

have provided in connection with the Cornell project that is at

issue in this case, all of those services were provided in their

capacity as the Narberth Borough building code official?

[Martin]: Yes, they were.

Martin Deposition at 110; R.R. 6291a.

Cornell responded that the Tort Claims Act provides no immunity for

non-tort claims such as breach of contract and promissory estoppel. Cornell

argued that the building permits constituted contracts between the parties and made

no mention of sprinklers. By failing to issue the certificate of occupancy in

accordance with the permits, Cornell argued, the Borough and Yerkes breached the

contract.

As to the promissory estoppel claim, Cornell explained that the

Borough and Yerkes informed Cornell at the pre-construction meeting that

automatic sprinklers were not required in the planned residences and affirmed that

representation through their subsequent actions, i.e., reviewing and approving the

construction drawings, issuing the building permits, inspecting the construction

site, and allowing the construction to continue. Cornell argued that the promise

6

made by the Borough and Yerkes is enforceable because Cornell detrimentally

relied on it.

Cornell further argued that its negligent misrepresentation claim

against Yerkes was not shielded by the Tort Claims Act. Cornell asserted that our

Supreme Court has “created a cause of action to a third party ‘where information is

negligently supplied by one in the business of supplying information, and where it

is foreseeable that the information will be used and relied upon by third persons.’”

Id. at 9; R.R. 3604a.

With respect to its equal protection claim under 42 U.S.C. §1983,

Cornell pointed to its letter of December 29, 2010, that it sent to the Borough and

the Fire Marshal. The letter identified a number of residences and educational

institutions within the Borough that should have been constructed with fire

sprinklers but were not. The letter requested an investigation of each of those

properties. However, the Borough chose not to require these properties to correct

the violations with the installation of automatic sprinklers. In support, Cornell

cited Martin’s deposition testimony:

[Question]: We have marked a document … on Cornell Homes

letterhead dated December 29, 2010, Mr. William Henderson,

Jr., Narberth Fire Company President, signed by Mark

McSorley … cc’d to the Narberth Borough Council Members

and Thomas Grady, Mayor of Narberth. Have you seen this

letter before?

***

[Martin]: It was in the file, yes. I can’t recall when I saw it, no.

***

7

[Question]: So you didn’t do anything then with respect to

following up with any of the properties that are identified here

in Mr. McSorley’s letter?

[Martin]: I did not, no.

[Question]: Do you know if anybody in the Borough did?

[Martin]: No, I don’t know that they did.

Martin Deposition at 105-06; R.R. 6286a-87a. Cornell argued that the Borough’s

inaction with respect to those other properties is inconsistent with “its claim that

life safety issues were of such paramount concern.” Cornell’s Brief in Opposition

to the Borough’s Motion for Summary Judgment at 19; R.R. 3326a. Cornell

argued that there is no rational basis for the disparate treatment.

The trial court granted the Borough’s and Yerkes’ motions for

summary judgment. The trial court rejected Cornell’s contract claims for the stated

reason that the “promise” made by the Borough and Yerkes was unenforceable.

Relying on Section 403.63(f) of the UCC, which provides that a building code

official may suspend or revoke a permit “when the permit is issued in error, on the

basis of inaccurate or incomplete information or in violation of any act, regulation,

ordinance or the [UCC],” 34 Pa. Code §403.63(f), the trial court concluded that

“the permits were freely revocable and thus any ‘contract’ created between those

parties was illusory.” Trial Court op., 8/25/2016, at 8.

The trial court also dismissed Cornell’s promissory estoppel claim,

concluding that it was in actuality a negligence claim barred by the Tort Claims

Act. Citing this Court’s decisions in Peluso v. Kistner, 970 A.2d 530 (Pa. Cmwlth.

2009), and Gallagher v. Lynch, (Pa. Cmwlth., No. 2359 C.D. 2011, filed August

21, 2012), the trial court noted that “the substance of a plaintiff’s allegations, rather

than the label that a plaintiff has affixed to a particular cause of action,” determines

8

whether a claim is barred by governmental immunity. Trial Court op., 8/25/2016,

at 11. The trial court concluded that “[e]ven though the pleadings [in the instant

case] speak of promissory estoppel, negligence is the gist of the action.” Id. at 12.

The trial court held that Cornell’s claim did not fall under any of the exceptions to

immunity in Section 8542 of the Tort Claims Act, 42 Pa. C.S. §8542.

Similarly, the trial court held that Cornell’s negligent

misrepresentation claim against Yerkes was barred by the Tort Claims Act.

Finding that Yerkes acted as an employee of the Borough, the trial court reasoned:

It is undisputed that Yerkes was the official building inspector

for the Borough during the relevant times. When Yerkes

performs building inspections, it acts on behalf of the Borough,

its employer. Therefore, it is immune from negligent

representation liability under the [Tort Claims Act].

Trial Court op., 8/25/2016, at 13.

Finally, the trial court dismissed Cornell’s equal protection claim

under 42 U.S.C. §1983, concluding that Cornell “failed to adduce sufficient

evidence to survive summary judgment.” Trial Court op., 8/25/2016, at 15. The

trial court found:

[T]he only substantive evidence is a letter written by Cornell

representatives to the Borough Fire Marshal and Borough

Council referencing six permits that the Borough has allegedly

granted in violation of Narberth Ordinance No. 843. Only two

of those instances involve a property with wooden trusses, and

only one involves roof trusses. The other four instances involve

alleged violations of other provisions of the ordinance.

Id. The trial court reasoned that the letter “is barely a scintilla of evidence and

would clearly not survive trial on the merits.” Id. Further, enforcement of the

ordinance “may be relaxed at the discretion of the Borough.” Id. Therefore, the

9

trial court concluded, summary judgment was appropriate. Cornell now appeals to

this Court.5

Appeal

On appeal, Cornell raises four issues. First, it argues that the trial

court erred in holding that the building permits did not create a “legally binding

contract” between Cornell and the Borough and Yerkes. Cornell Brief at 18.

Second, it argues that the trial court erred in ruling that its promissory estoppel

claim is really a tort action that is barred by the Tort Claims Act. Third, Cornell

argues that the trial court erred in dismissing its negligent misrepresentation claim

against Yerkes, which, it asserts, is “an independent professional liability claim”

that is “not subsumed by the Tort Claims Act.” Id. at 45. Fourth, Cornell argues

that the trial court erred in dismissing its equal protection claim under 42 U.S.C.

§1983 “in the face of clear, undisputed testimony from [the] Borough’s own

employees that Cornell was treated as a class of one.” Id. at 50.

“A motion for summary judgment may be granted only where there is

no genuine issue of material fact and the moving party is entitled to judgment as a

matter of law.” Flood v. Silfies, 933 A.2d 1072, 1074 (Pa. Cmwlth. 2007). A fact

is material if it directly affects the disposition or the outcome of a case.

Department of Environmental Protection v. Delta Chemicals, Inc., 721 A.2d 411,

416 (Pa. Cmwlth. 1998). The moving party has the burden of proving that there is

no genuine issue of material fact. Laich v. Bracey, 776 A.2d 1022, 1024 (Pa.

5

This Court’s scope of review of a trial court’s order granting summary judgment is plenary and

we apply the same standard for summary judgment as does the trial court. Cochrane v. Kopko,

975 A.2d 1203, 1205 (Pa. Cmwlth. 2009). We reverse a trial court’s order granting summary

judgment only where it is established that the trial court committed an error of law or abused its

discretion. Id.

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Cmwlth. 2001). The right to judgment must be clear and free from doubt. In

considering the merits of a motion for summary judgment, a court must “view the

record in the light most favorable to the non-moving party, and all doubts as to the

existence of a genuine issue of material fact must be resolved against the moving

party.” Flood, 933 A.2d at 1074 (quotations omitted). We now consider the

parties’ arguments in light of the above-referenced principles and this Court’s

standard of review.

Breach of Contract Claim

Cornell argues that the building permits issued by the Borough and

Yerkes to Cornell constitute an express contract. Specifically, Cornell asserts that

it made an offer to the Borough and Yerkes to construct four homes in the Borough

in accordance with the construction plans it submitted; that it paid permit fees in

excess of $6,000 as consideration for the contract; and that the Borough and

Yerkes accepted Cornell’s offer by issuing permits to Cornell for the construction

of the homes based on the submitted and approved plans. Cornell Brief at 19.

Alternatively, Cornell argues that “an implied-in-fact contract

nevertheless exists,” which is evidenced by the parties’ actions. Cornell Brief at

20-21. Contrary to the trial court’s finding that the building permits represent an

illusory and unenforceable promise, Cornell argues that the permits are, “at the

very least, voidable contracts.” Id. at 26. Cornell asserts that, “[i]n order for the

[p]ermits to be unenforceable … the [p]ermits would have to have actually been

revoked and evidence presented showing that the [p]ermits were validly

revoked[.]” Id. at 24. Because the Borough and Yerkes did not revoke or suspend

the permits, they “accept[ed] the benefits flowing from [the contract]” and,

therefore, effectively ratified a voidable contract. Id. at 26. Cornell argues that it

11

has a vested right “to complete the work in accordance with the approved plans

and issued permits,” id. at 28, and the Borough and Yerkes breached the contract

by refusing to issue the certificates of occupancy.

To establish a contract, all essential elements must exist, including

consideration. The requirement of consideration “is nothing more than a

requirement that there be a bargained for exchange.” Department of

Transportation v. First Pennsylvania Bank, 466 A.2d 753, 754 (Pa. Cmwlth.

1983). “There can obviously be no such bargained for exchange if one of the

parties is already legally bound to render the performance promised.” Id. “A

promise to do what the promisor is already bound to do cannot be a consideration,

for if a person gets nothing in return for his promise but that to which he is already

legally entitled, the consideration is unreal.” In re Commonwealth Trust Company

of Pittsburgh, 54 A.2d 649, 651 (Pa. 1947).

In First Pennsylvania Bank, a bank financed the purchase of a new

automobile from Murphy Ford and acquired a first lien on the vehicle. Murphy

Ford then requested that the Department of Transportation record the lien pursuant

to former Section 1133(c) of the Vehicle Code,6 which provided that the

Department “shall endorse on the existing certificate of title, or on a new certificate

which it then issues, the name and address of all secured parties and shall mail the

certificate of title to the first lienholder named in the certificate.” First

Pennsylvania Bank, 466 A.2d at 754 (quoting former 75 Pa. C.S. §1133). The

Department, however, did not endorse the title and mailed the certificate to the

6

Section 1133 of the Vehicle Code was deleted by the Act of June 8, 2001, P.L. 123, effective

July 1, 2001.

12

car’s owner, instead of the bank. The owner then sold the car, stopped making

payments on his loan, and moved out of state.

The bank requested the Department to pay the outstanding balance of

the loan, alleging that it was a third-party beneficiary of a contract between the

Department and Murphy Ford. The bank argued that the Department breached the

contract by failing to record the lien and mail the title to the proper party. Holding

that there was no contract between the Department and Murphy Ford, this Court

found that the Department was legally required by former Section 1133(c) of the

Vehicle Code to endorse the title and mail it to the first lienholder. “There was,

therefore, no bargained for exchange between Murphy Ford and [the Department],

and hence, no consideration.” Id.

Likewise, here, the Borough is required by law to review and grant (or

deny) building permits. Section 403.63(a) of the UCC, for example, provides that

“[a] building code official shall grant or deny a permit application, in whole or in

part, within 15 business days of the filing date or the application is deemed

approved.” 34 Pa. Code §403.63(a) (emphasis added). Similarly, Section

403.63(b) provides that “[a] building code official shall examine the construction

documents and shall determine whether the construction indicated and described is

in accordance with the [UCC] and other pertinent laws or ordinances as part of the

application process.” 34 Pa. Code §403.63(b) (emphasis added). Section

403.64(a) states that “[a] construction code official shall inspect all construction

for which a permit was issued.” 34 Pa. Code §403.64(a) (emphasis added).

Further, Section 403.65(b) states that “[a] building code official shall issue a

certificate of occupancy after receipt of a final inspection report that indicates

13

compliance with the [UCC] and ordinance[.]” 34 Pa. Code §403.65(b) (emphasis

added).

The UCC also requires a developer to obtain building permits and pay

any permit fees before commencing construction. Section 403.62(a) of the UCC

provides that “[a]n owner or authorized agent who intends to construct ... a

residential building … shall first apply to the building code official and obtain the

required permits under §403.62a (relating to permit application).” 34 Pa. Code

§403.62(a) (emphasis added). Section 403.63(k) provides that “[a] permit is not

valid until the required fees are collected[.]” 34 Pa. Code §403.63(k).

In short, the UCC required Cornell to obtain the building permits and

pay the permit fees before constructing the Narberth Arbors homes. Similarly, it

required the Borough and Yerkes to examine the construction documents; issue the

building permits; inspect construction; and issue a certificate of occupancy.

“Where a legal obligation exists, a cumulative promise to perform it, unless upon a

new consideration, is a nullity. Such promise adds nothing to and takes nothing

from the original obligation.” In re Commonwealth Trust Company of Pittsburgh,

54 A.2d at 651 (internal quotations omitted). Because a promise to perform an

obligation that the promisor is already legally bound to do cannot be consideration,

we conclude that the building permits did not create a contractual relationship

among Cornell, the Borough, and Yerkes.

Further, our Supreme Court, in Commonwealth v. Devlin, observed:

A “building permit” is not a contract; it is exactly what it says it

is–a permit to erect a building according to the plans and

specifications submitted with the application therefor. It does

not require the property owner to erect such a building, but only

permits him to do so. For any reason satisfactory to himself he

may change his mind and not begin the construction, and his

14

decision in this respect will not be reviewable by the inspector

or the city; or, having started, may stop before the building is

completed, in which event no authority can compel him to go

on.

158 A. 161, 163 (Pa. 1932) (emphasis original). Based on the foregoing analysis,

we conclude that the trial court did not err in granting summary judgment in favor

of the Borough and Yerkes on Cornell’s breach of contract claim.

Promissory Estoppel Claim

Cornell argues, next, that the trial court erred in holding its

promissory estoppel claim to be a “disguised” tort claim. Cornell asserts that a

promissory estoppel claim “arise[s] from [an] implied contract[], and accordingly,

sound[s] in contract not tort.” Cornell Brief at 41. Cornell sought damages under

a theory of detrimental reliance, and the Tort Claims Act does not apply to such a

claim. Cornell argues that its detrimental reliance on the assurances by the

Borough and Yerkes that the homes would not require sprinklers created “the

consideration necessary for the formation of a contract, the breach of which

becomes actionable.” Id. at 41.

We begin with a review of the principles of detrimental reliance,

which this Court has explained “is another name for promissory estoppel.” Peluso

v. Kistner, 970 A.2d 530, 532 (Pa. Cmwlth. 2009) (quoting Travers v. Cameron

County School District, 544 A.2d 547, 550 (Pa. 1988)). Promissory estoppel

provides an equitable remedy to enforce a “contract-like promise that would be

otherwise unenforceable under contract law principles.” Id. In promissory

estoppel, the aggrieved party must show that “(1) the promisor made a promise that

he should have reasonably expected to induce action or forbearance on the part of

the promisee; (2) the promisee actually took action or refrained from taking action

15

in reliance on the promise; and (3) injustice can be avoided only by enforcing the

promise.” Crouse v. Cyclops Industries, 745 A.2d 606, 610 (Pa. 2000). These

factors are strictly enforced to guard against the “loose application” of promissory

estoppel. Peluso, 970 A.2d at 533.

Cornell argues that all of the promissory estoppel elements are present

here. The Borough and Yerkes promised Cornell that it could build the Narberth

Arbors homes without installing automatic sprinklers; in reliance Cornell built the

homes without sprinklers; the Borough and Yerkes did not keep their promise

because they later demanded the installation of sprinklers; and Cornell incurred

substantial expenses to install them. Cornell argues that “[j]ustice will only be

served if Cornell is compensated by [the] Borough and Yerkes for these

unexpected substantial additional expenses.” Cornell Brief at 43.

A plaintiff cannot defeat the defense of governmental immunity by

couching a tort claim as a breach of contract claim. Matarazzo v. Millers Mutual

Group, Inc., 927 A.2d 689, 693 (Pa. Cmwlth. 2007). Cornell’s claim lacks a

necessary prerequisite for asserting promissory estoppel: a contract-like promise.

The Borough and Yerkes promised, at most, to perform an obligation that they

were legally bound to perform by the UCC. A promise to perform a legal

obligation is not a contract-like promise.

The facts here are very similar to those in Gallagher v. Lynch, (Pa.

Cmwlth., No. 2359 C.D. 2011, filed August 21, 2012). In Gallagher, the township

issued landowners a permit for an on-lot sewage disposal system to serve the home

they planned to build, and the landowners began construction. Months later, the

Pennsylvania Department of Environmental Protection revoked the permit. The

16

landowners sued the sewage enforcement officer and the township for damages

incurred as a result of their detrimental reliance on the permit.

The trial court in Gallagher concluded that the landowners’ claim,

labeled detrimental reliance or promissory estoppel, sounded in tort rather than

contract. The landowners’ allegations set forth the elements of a negligence claim,

i.e., a duty to conduct a site examination and to issue a permit in a competent, non-

negligent manner; a breach of that duty of care; and damages resulting from such

breach. The trial judge, therefore, dismissed the landowners’ claim under the

immunity provisions of the Tort Claims Act. This Court adopted the trial court’s

opinion with the above reasoning.

Likewise, here, Cornell’s claim, although labeled as promissory

estoppel, sounds in tort. The factual allegations in Cornell’s complaint set forth the

elements of a negligent misrepresentation claim, which is “(1) a misrepresentation

of a material fact; (2) made under circumstances in which the misrepresenter ought

to have known its falsity; (3) with an intent to induce another to act on it; and (4)

which results in injury to a party acting in justifiable reliance on the

misrepresentation.” Bortz v. Noon, 729 A.2d 555, 561 (Pa. 1999). Accordingly,

the trial court did not err in holding that Cornell’s promissory estoppel claim

against the Borough is barred by the immunity provisions of the Tort Claims Act,

42 Pa. C.S. §§8541-8542.

Because the Borough and Yerkes did not make a contract-like promise

and because the factual allegations in Cornell’s complaint set forth a negligent

misrepresentation claim, we conclude that the trial court did not err in granting

summary judgment to the Borough and Yerkes on Cornell’s promissory estoppel

claim.

17

Negligent Misrepresentation Claim against Yerkes

Cornell argues that the trial court erred by dismissing its negligent

misrepresentation claim against Yerkes, which is “an independent professional

liability claim … not subsumed by the Tort Claims Act.” Cornell Brief at 45.

Yerkes responds that as the appointed building inspector, it is an employee of the

Borough; therefore, “any action or inaction by Yerkes while acting in the official

capacity of the Borough building inspector would be immune from suit under the

[Tort Claims Act].” Yerkes Brief at 10.

In support, Yerkes cites to this Court’s decision in Higby

Development, LLC v. Sartor, 954 A.2d 77 (Pa. Cmwlth. 2008).7 In that case, a real

estate developer sued several township employees along with Yerkes Associates,

Inc., which acted as the township’s code enforcement officer, and Russel Yerkes,

the individual who performed the duties of the township’s code enforcement

officer, alleging that they engaged in tortious conduct to impede its real estate

development. Russel Yerkes countered that he was an employee of the township

and, thus, immune from liability under the Tort Claims Act. The trial court ruled

in favor of Russel Yerkes.

Affirming the trial court, this Court examined Section 8501 of the

Judicial Code, which defines the term “employee” as follows:

Any person who is acting or who has acted on behalf of a

government unit whether on a permanent or temporary basis,

whether compensated or not and whether within or without the

7

In 2010, the Supreme Court vacated this Court’s order in Higby and remanded the matter to the

trial court for further proceedings on the intentional tort claims. Higby Development, LLC v.

Sartor, 991 A.2d 305 (Pa. 2010). Notably, the Supreme Court did not reverse this Court’s

holding that a third party who acts on behalf of a government unit in performing governmental

functions is immune from liability under the Tort Claims Act.

18

territorial boundaries of the government unit, including any

volunteer fireman and any elected or appointed officer, member

of a governing body or other person designated to act for the

government unit. Independent contractors under contract to the

government unit and their employees and agents and persons

performing tasks over which the government unit has no legal

right of control are not employees of the government unit.

42 Pa. C.S. §8501 (emphasis added). We found that the definition does not require

a person to be “an employee in the traditional sense, but only that the employee is

acting on behalf of the governmental entity.” Higby, 954 A.2d at 85. In support,

this Court cited Walls v. Hazleton State Hospital, 629 A.2d 232 (Pa. Cmwlth.

1993). There, a patient brought a malpractice claim against a doctor, who was

employed by a medical group retained as an independent contractor to provide

medical services to a state hospital. The Walls court held that although the doctor

was not a traditional employee, he was an “employee” of the Commonwealth

because he was a person who “acted on behalf of a government unit whether on a

permanent or temporary basis.” Id. at 236-37 (citing 42 Pa. C.S. §8501). The

Higby court therefore held:

Because Yerkes was clearly acting as the Code Enforcement

Officer on behalf of the Township in order to determine

whether the next phase of construction could occur, and clearly

did not make final decisions of Supervisors as he only

recommended to them whether or not [Certificates of

Occupancy] should be issued, Yerkes was an “employee” for

purposes of the Tort Claims Act and was entitled to

governmental immunity.

Higby, 954 A.2d at 86.

Likewise, here, Yerkes Associates was hired by the Borough as its

official building inspector. Acting in that capacity, Yerkes examined and approved

19

construction drawings; recommended the issuance of building permits; and

inspected the construction for which permits had been issued. Section 8501 of the

Judicial Code defines “employee” as “any person who is acting or who has acted

on behalf of a government unit[.]” 42 Pa. C.S. §8501. The definition does not

require a person to be “an employee in the traditional sense, but only that the

employee is acting on behalf of the governmental entity.” Higby, 954 A.2d at 85.

Notably, Section 403.3(a) of the UCC requires that a building code official be

appointed to enforce the Construction Code Act. 34 Pa. Code §403.3(a). Yerkes,

in carrying out its responsibilities as a building code official, acted on behalf of the

Borough. Consistent with our decision in Higby, we conclude that Yerkes acted as

an “employee” of the Borough for purposes of the Tort Claims Act.

Cornell argues that our Supreme Court’s decision in Bilt-Rite

Contractors, Inc. v. The Architectural Studio, 866 A.2d 270 (Pa. 2005), provides “a

legal basis for [its] negligent misrepresentation claim against Yerkes.” Cornell

Brief at 49. In that case, a school district hired an architectural firm to design a

new school building. Relying on the architect’s drawings and plans, a construction

company submitted a bid for general construction work on the project. The school

district awarded the company the contract, and construction began. The company

later found that the architect’s drawings and plans contained inaccurate

information, which substantially increased construction costs. The company sued

the architect for negligent misrepresentation under Section 552 of the Restatement

(Second) of Torts (Restatement).8 The trial court dismissed the complaint, holding

8

Section 552 of the Restatement (Second) of Torts provides:

(1) One who, in the course of his business, profession or employment, or in any

other transaction in which he has a pecuniary interest, supplies false information

(Footnote continued on the next page . . .)

20

that the architect owed no duty to the company. The Superior Court affirmed. The

Supreme Court reversed, finding that “it is reasonable to hold [architects and other

design] professionals to a traditional duty of care for foreseeable harm.” Bilt-Rite

Contractors, 866 A.2d at 286. The Court recognized that Section 552 of the

Restatement “sets forth the parameters of a duty owed when one supplies

information to others, for one’s own pecuniary gain, where one intends or knows

that the information will be used by others in the course of their own business

activities.” Id. at 285-86.

Cornell argues that under Bilt-Rite Contractors, Yerkes should be

found liable because it “supplies information to others for personal gain,” and

Cornell relied on Yerkes’ information “to its distinct detriment.” Cornell Brief at

49. Cornell’s reliance on Bilt-Rite Contractors is misplaced. Unlike Bilt-Rite

Contractors, the issue in the instant case is not whether Yerkes owed a duty of care

(continued . . .)

for the guidance of others in their business transactions, is subject to liability for

pecuniary loss caused to them by their justifiable reliance upon the information, if

he fails to exercise reasonable care or competence in obtaining or communicating

the information.

(2) Except as stated in Subsection (3), the liability stated in Subsection (1) is

limited to loss suffered

(a) by the person or one of a limited group of persons for whose

benefit and guidance he intends to supply the information or knows

that the recipient intends to supply it; and

(b) through reliance upon it in a transaction that he intends the

information to influence or knows that the recipient so intends or

in a substantially similar transaction.

(3) The liability of one who is under a public duty to give the information extends

to loss suffered by any of the class of persons for whose benefit the duty is

created, in any of the transactions in which it is intended to protect them.

RESTATEMENT (SECOND) OF TORTS §522 (1977).

21

to Cornell or whether Cornell established a prima facie case of negligence. Rather,

the trial court here granted summary judgment to Yerkes based on its affirmative

defense of governmental immunity, which is separate from the merits of Cornell’s

cause of action. An affirmative defense bars recovery even when the plaintiff has

established a prima facie case. Notably, the architectural firm in Bilt-Rite

Contractors did not raise a defense of governmental immunity or claim it was an

employee of the school district. Bilt-Rite Contractors, therefore, is inapposite.

For all these reasons, we conclude that the trial court did not err in

granting summary judgment in favor of Yerkes on Cornell’s negligent

misrepresentation claim.

Equal Protection Claim

Finally, Cornell challenges the trial court’s conclusion that Cornell did

not make a case on its equal protection claim under 42 U.S.C. §1983. Cornell

asserts that the “undisputed facts and the admissions of [the] Borough” establish a

violation of Cornell’s equal protection rights under the “class of one” theory.

Cornell Brief at 52.

Section 1983 provides, in pertinent part:

Every person who, under color of any statute, ordinance,

regulation, custom, or usage, of any State or Territory or the

District of Columbia, subjects, or causes to be subjected, any

citizen of the United States or other person within the

jurisdiction thereof to the deprivation of any rights, privileges,

or immunities secured by the Constitution and laws, shall be

liable to the party injured in an action at law….

42 U.S.C. §1983. To hold a state actor liable under Section 1983, “a plaintiff must

prove a deprivation of a right guaranteed by the Constitution or the Laws of the

United States by a defendant acting under the color of law.” Pettit v. Namie, 931

22

A.2d 790, 801 (Pa. Cmwlth. 2007). “Section 1983 does not create substantive

rights but, rather, is the vehicle for vindicating rights conferred in the United States

Constitution or in federal statutes.” Jae v. Good, 946 A.2d 802, 809 (Pa. Cmwlth.

2008).

Cornell asserts that the Borough and Yerkes deprived it of its right to

equal protection under the law guaranteed by the Fourteenth Amendment to the

U.S. Constitution.9 Where the plaintiff does not allege membership in a protected

class, he may assert an equal protection claim under the “class of one” theory.

Village of Willowbrook v. Olech, 528 U.S. 562, 564 (2000). A plaintiff bringing a

“class of one” claim must demonstrate that (1) the defendant treated him

differently from others similarly situated; (2) the defendant did so intentionally;

and (3) any differential treatment was without rational basis. Hill v. Borough of

Kutztown, 455 F.3d 225, 239 (3d Cir. 2006). A “class of one” claim, like any

equal protection claim evaluated under rational basis review, cannot succeed “if

there is any reasonably conceivable state of facts that could provide a rational basis

for the classification.” Heller v. Doe, 509 U.S. 312, 320 (1993) (quotation

omitted).

Cornell argues that it presented sufficient evidence to support an equal

protection claim under the “class of one” theory. Cornell points to the deposition

testimony of Frederick Hansell, the Borough’s Assistant Manager, who testified in

pertinent part:

9

The equal protection clause of the Fourteenth Amendment provides that “[n]o state shall …

deny to any person within its jurisdiction the equal protection of the laws.” U.S. CONST. amend.

XIV, §1.

23

[Question]: To your knowledge, the four lots of the Narberth

Arbors project … are the only four residences where the

borough has required fire sprinklers?

[Hansell]: Yes.

***

[Question]: Are you aware of any residential construction in the

borough ever, other than these four lots, where the borough has

required fire sprinklers?

[Hansell]: No.

Hansell Deposition at 123, 126; R.R. 5010a, 5013a. Cornell asserts that the

Borough “intentionally discriminated against Cornell by requiring Cornell, and

only Cornell, to install automatic sprinklers in the Narberth Arbors homes.”

Cornell Brief at 52.

Cornell sent a letter to the Borough and the Fire Marshal that

identified a number of properties within the Borough that are in violation of the

Fire Code by not having sprinklers. In addition, Martin testified that he did not

investigate those violations. Cornell argues this evidence demonstrated disparate

treatment, which violated its right to equal protection of the laws.

It is well established that “issue spotting without analysis or legal

citation to support an assertion precludes our appellate review of [a] matter.”

Boniella v. Commonwealth, 958 A.2d 1069, 1072 n.8 (Pa. Cmwlth. 2008). See

also Pa. R.A.P. 2119(a) (requiring argument of issues to be “followed by such

discussion and citation of authorities as are deemed pertinent.”). The evidence

cited by Cornell relates to the Borough, but it has nothing to do with Yerkes.

Cornell has not cited any evidence that Yerkes was involved in the alleged

disparate treatment; its mere assertion of error does not suffice.

24

We consider, next, the trial court’s entry of summary judgment in

favor of the Borough on Cornell’s equal protection claim. A municipality is a

“person” that can be sued directly under Section 1983 and be held liable in certain

circumstances. Arocho v. County of Lehigh, 922 A.2d 1010, 1021 (Pa. Cmwlth.

2007) (citing Monell v. Department of Social Services of City of New York, 436

U.S. 658, 690 (1978)). A municipality cannot, however, be held liable under

Section 1983 on a respondeat superior theory. Id. (citing Monell, 436 U.S. at

691). “Rather, liability will be imposed when the municipality implements an

official policy that is either unconstitutional on its face or is the ‘moving force’

behind the constitutional tort of one of its employees.” Id. (citing Monell, 436

U.S. at 694). “Policy is made when a ‘decisionmaker possess[ing] final authority

to establish municipal policy with respect to the action’ issues an official

proclamation, policy, or edict.” Andrews v. City of Philadelphia, 895 F.2d 1469,

1480 (3d Cir. 1990) (quoting Pembaur v. City of Cincinnati, 475 U.S. 469, 481

(1986)). In the absence of an official policy, a municipality may also face liability

under Section 1983 “for constitutional deprivations visited pursuant to

governmental ‘custom’ even though such a custom has not received formal

approval through the body’s official decisionmaking channels.” Monell, 436 U.S.

at 690-91.

This Court has held that “a municipality cannot be held liable in a

Section 1983 action in the absence of a predicate unconstitutional act by the

municipality’s employee.” Arocho, 922 A.2d at 1022. “Even if the municipality’s

actions are arbitrary or even conscience shocking, in a constitutional sense the

municipality cannot be held liable under Section 1983.” Id. (internal quotations

omitted).

25

Cornell argues that the Borough “has chosen not to require retroactive

installation of automatic sprinklers on a number of similarly situated properties

within the Borough, i.e. other buildings constructed with pre-engineered wood roof

trusses.” Cornell Brief at 53-54. Cornell has not identified a custom or policy of

the Borough “that is either unconstitutional on its face or is the ‘moving force’

behind the constitutional tort of one of its employees.” Arocho, 922 A.2d at 1021.

Section 403.65(d) of the UCC provides that “[a] building code official may

suspend or revoke a certificate of occupancy when the certificate was issued in

error….” 34 Pa. Code §403.65(d) (emphasis added). Similarly, Section 403.63(f)

of the UCC provides that “[a] building code official may suspend or revoke a

[building] permit issued under the [UCC] … when the permit is issued in error….”

34 Pa. Code §403.63(f). Stated otherwise, the building code official may suspend

or revoke a permit, but need not do so. That the Borough did not revoke or

suspend the certificates issued for other similar properties does not mean the

Borough acted deliberately to deprive Cornell of property rights. In any case,

Cornell did not demonstrate a constitutional violation by a municipal actor; its

equal protection claim against the Borough must fail as a matter of law. Arocho,

922 A.2d at 1022.

Further, this Court has observed that the “concept of equal protection

does not require that [the administrative agency] attack a problem all at once or not

at all.” UMCO Energy, Inc. v. Department of Environmental Protection, 938 A.2d

530, 540 (Pa. Cmwlth. 2007) (quoting Life Insurance Company of North America

v. Insurance Department, 402 A.2d 297, 299 (Pa. Cmwlth. 1979)). An equal

protection claim fails when a property owner merely alleges that state laws could

have been applied against its predecessor in title but were not. Anselma Station,

26

Ltd. v. Pennoni Associates, Inc., 654 A.2d 608, 616 (Pa. Cmwlth. 1995). Cornell

contends that the Borough should have taken action against other similarly situated

properties not in compliance with the Fire Code. However, the Borough does not

have to respond to every violation of the Fire Code in an identical fashion. The

Equal Protection Clause of the Fourteenth Amendment does not require uniform

enforcement of an ordinance. Ignelzi v. Zoning Board of Adjustment of the City of

Pittsburgh, 495 A.2d 634, 636-37 (Pa. Cmwlth. 1985).

Conclusion

For the foregoing reasons, we affirm the trial court’s grant of

summary judgment to Borough and Yerkes.

______________________________________

MARY HANNAH LEAVITT, President Judge

27

IN THE COMMONWEALTH COURT OF PENNSYLVANIA

Cornell Narberth, LLC, :

Appellant :

:

v. : No. 1577 C.D. 2016

:

Borough of Narberth, Montgomery :

County, Pennsylvania and Yerkes :

Associates, Inc., C. O'Brien :

Architects, Inc. and Cheryl A. O'Brien :

ORDER

AND NOW, this 14th day of July, 2017, the order of the Court of

Common Pleas of Montgomery County, dated August 25, 2016, in the above-

captioned matter is hereby AFFIRMED.

______________________________________

MARY HANNAH LEAVITT, President Judge