Legal News

Parking Authority Argues for Mandatory Injunction Over Family Courthouse Site

By Brian Harris

By Amaris Elliott-Engel
Of the Legal Staff

The Philadelphia Parking Authority told a federal bankruptcy judge in a court filing today that the judge has the equitable power to settle definitively, with a mandatory preliminary injunction, whether the once-proposed developer of the stymied Philadelphia family courthouse project defaulted on its mortgage.

Bankruptcy Judge Eric L. Frank of the U.S. Bankruptcy Court for the Eastern District of Pennsylvania ordered the parking authority and Northwest 15th Street Associates to file briefs on whether or not he has the legal authority to settle the dispute over the ownership of the family courthouse site by ordering a mandatory preliminary injunction. Northwest must file its papers by Sept. 10.

The parking authority's counsel, Patrick J. Doran and Jerrold S. Kulback of Archer & Greiner, wrote the Pennsylvania Superior Court has recognized a mandatory injunction in the context of a real property dispute as appropriate, as long as the party seeking mandatory injunctive relief meets an even heavier burden than applicable to a preliminary injunction, which preserves the status quo.

"The court's authority to grant the relief sought by PAP is further buttressed by any fair scrutiny of debtor's actual interest in the property," the parking authority's memorandum said. "... Debtor did not pay a purchase price to PAP; the sole consideration to PAP was debtor's obligation to develop the property ... as well as a parking garage for PAP. Debtor never took actual physical possession of the property, on which PAP has continuously operated a surface parking lot ... Debtor was not free to alienate its record title to the air rights to the property, for the precise reason that those rights were always intended to be subject to debtor's obligation to develop the property."

Northwest 15th Street Associates, the corporate entity formed by developer Donald W. Pulver to develop the family court project at 15th and Arch Streets, filed for bankruptcy June 23 after the original family court structure unraveled in the wake of the revelation that Pulver struck a co-development deal with the First Judicial District's former tenant representative, Jeffrey B. Rotwitt. Pulver and Rotwitt have said that their deal was disclosed, while the FJD and the parking authority have said Rotwitt's dual role was not disclosed.

Frank must decide as part of the bankruptcy proceeding whether Northwest defaulted on its mortgage with the parking authority and who owns the site aboveground, and whether the deed can be released to the parking authority under a deed-in-lieu-of-foreclosure process.

The planners of the courthouse project view time as of the essence because the successor to Gov. Edward G. Rendell, a former Philadelphia mayor and district attorney, may not commit to releasing the $200 million in capital funds earmarked by the Pennsylvania General Assembly for the project. A new governor, to be elected in November, would take office in January and is not bound by Rendell's commitment.

Full post as published by The Legal Intelligencer Blog on September 03, 2010 (boomark / email).