Legal News

Northwest Argues Against Judge's Authority to Expedite Family Courthouse Decision

By Brian Harris

By Amaris Elliott-Engel
Of the Legal Staff

Northwest 15th Street Associates, the private developer at the center of the stymied Philadelphia family courthouse project, told a federal bankruptcy judge in a court filing Monday evening that centuries of U.S. property law, as well as its constitutional rights to not be deprived of its property without due process of law, would be violated if the judge issues an interim order that would transfer title to the air rights at the proposed courthouse site.

Northwest mortgaged the air rights to the proposed courthouse site at 15th and Arch streets from the Philadelphia Parking Authority, which still owns the underground part of the site.

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 the judge has the legal authority to settle the dispute over the ownership of the family courthouse site by ordering a mandatory preliminary injunction.

Northwest 15th Street Associates, the corporate entity formed by developer Donald W. Pulver to develop the 15th and Arch streets site, 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.

"Although Northwest owns the ... property, PPA seeks a court order that would permit PPA to seize title to the Northwest property by obtaining and recording the deed," Northwest counsel Robert Ebby, Stuart F. Ebby, James M. Matour and Ashely M. Chan of Hangley Aronchick Segal & Pudlin wrote. "PPA fails to offer any explanation as to what this would mean prior to a final ruling on the merits. Can PPA sell the Northwest property to a third party during this interim period, and, if so, what happens to that third party's rights if Northwest ultimately prevails on the merits and the Northwest property is ordered transferred back? Would Northwest then have to move for and obtain another court order compelling the third party (or PPA if not sold) (a) to transfer the Northwest property back to Northwest and (b) to pay any and all property taxes and insurance premiums?"

Northwest disputes that it is in default of its mortgage, but said that even if it is in default, that the deed to the air rights at 15th and Arch streets cannot be released under a deed-in-lieu-of-foreclosure process until a final order on the merits of the case is entered.

The parking authority, however, told Frank he has the equitable power to settle definitively, with a mandatory preliminary injunction, whether the once-proposed developer of the courthouse project defaulted on its mortgage with the parking authority. 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, the parking authority said.

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 14, 2010 (boomark / email).