HARRISBURG – A local Chinese restaurant owner has settled claims against the Borough of Middletown, closing litigation which asserted that the Borough sought to prevent the plaintiff from opening and conducting daily business operations.
HE Group, Inc. first filed suit in the U.S. District Court for the Middle District of Pennsylvania on Jan. 24, 2020 against the Borough and its Codes and Zoning Officer Al Geosits, alleging the owner was denied equal treatment when told to comply with arbitrary zoning enforcement, related in part to off-street parking, and summarily issued fines.
In one example, the suit stated, owner Howard Dong spent approximately $10,000 in engineering fees.
“The citations were arbitrary and capricious and directly contrary to the representations and assurances provided to [plaintiff] by [defendant] on behalf of the Borough and were motivated by an improper desire to frustrate [the plaintiff’s] lawful business opportunities,” the suit stated.
“[The plaintiff] has been treated in an inconsistent and capricious manner, with contradictory directives and orders all of which were intended to cause the…restaurant to ‘fall’ and to ‘bleed’ the company.”
The plaintiff referred to the municipality’s requests as “irrational” and “wholly arbitrary.”
On April 3, 2020, the municipal defendants filed a motion to dismiss for failure to state a claim or in the alternative, to strike allegations of the complaint and compel a more definite claim.
“Count I fails to state a claim or cause of action for which relief may be granted as to both defendants because plaintiff’s conclusory allegations that other properties in close proximity to the property were not treated as it was treated are insufficient to state a viable equal protection claim for disparate treatment,” according to the motion.
“Count I fails to state a claim or cause of action for which relief may be granted as to the Borough, as it fails to state a viable claim for municipal liability. Among other reasons, plaintiff does not identify any policymaking action taken by the Borough – including any provision of the Borough’s zoning ordinance, storm water management ordinance, floodplain ordinance, building codes ordinance (and incorporated Pennsylvania Uniform Construction Code) or property maintenance code ordinance (and incorporated International Property Maintenance Code) – that was in any way improper or proximately caused any alleged constitutional injury to plaintiff.”
In addition, the response motion alleged any individual claims against Geosits were duplicative of any claims against the Borough and thus, Geosits should be dismissed from the litigation. Furthermore, the motion argued that even if Geosits were a valid defendant, he would be protected from suit via qualified immunity.
An amended complaint was then filed on May 1, 2020, which the Borough also opposed with a motion to dismiss three weeks later – which sought to dismiss the complaint for failure to state a claim and to strike several allegations from the complaint.
U.S. District Court for the Middle District of Pennsylvania Judge Jennifer P. Wilson denied the Borough’s motion in a memorandum opinion, filed on March 3.
“Having reviewed the amended complaint, the court will deny this portion of defendants’ motion to dismiss. The amended complaint alleges that defendants arbitrarily enforced borough zoning rules against HE Group by requiring storm water control developments and parking developments that were not required for other properties in the same geographic area,” Wilson stated.
“The amended complaint alleges that the owners of those other properties are similarly situated to HE Group because their properties are in the same two-block radius as HE Group’s Union Street property and because there is ‘extensive parking’ at the other properties like there is at HE Group’s property.”
On this basis, Wilson said the claims were sufficient to allege that HE Group was treated differently from other similarly situated property owners.
UPDATE
On Sept. 7, Wilson announced that the case was stayed for 60 days, pending the finalization of a settlement agreement which had recently been reached.
“Following a status conference on Aug. 31 with the Court and upon notification that the parties have reached a settlement agreement, it is ordered that this matter is stayed for 60 days. It is further ordered that the parties shall file a status report by no later than Oct. 29,” the order said.
The case was officially closed on Oct. 18, being voluntarily dismissed after the settlement was finalized. Terms of the settlement were not disclosed.
“The parties to this action, plaintiff HE Group, Inc., by undersigned counsel Aaron D. Martin, Esquire, of Mette, Evans & Woodside, and defendants Borough of Middletown and Al Geosits in his individual capacity only, by undersigned counsel James A. Diamond, Esquire, of Eckert Seamans Cherin & Mellott, LLC, stipulate to the voluntary dismissal with prejudice of this action pursuant to Federal Rule of Civil Procedure 41(a)(1)(A)(ii),” the stipulation of dismissal read.
“Inasmuch as this stipulation ends the case, counsel believes that this discontinuance complies with the Court’s directive to provide a status report. If, however, the Court would need any additional information, counsel will provide the same upon request.”
The plaintiff was represented by Aaron D. Martin and Veronica L. Morrison of Mette Evans & Woodside, in Harrisburg.
The defendants were represented by Audrey A. Kwak and James A. Diamond of Eckert Seamans Cherin & Mellott, also in Harrisburg.
U.S. District Court for the Middle District of Pennsylvania case 1:20-cv-00132
From the Pennsylvania Record: Reach Courts Reporter Nicholas Malfitano at nick.malfitano@therecordinc.com