Case Summary

May 2010Newsletters In the Zone

A recent Commonwealth Court decision may limit a trial court's authority to approve settlement agreements resolving land use proceedings if not structured properly by the parties thereto. In BPG Real Estate Investors-Straw Party II, L.P., the Commonwealth Court invalidated the trial court's approval of a settlement agreement involving multiple properties, some of which had not been involved in the appealed from conditional use decision rendered by the governing body.

In BPG Real Estate Investors-Straw Party II, L.P., protestants appealed the trial court's approval of a settlement agreement between several developers and the municipality for a large mixed-use project involving multiple properties. The settlement agreement provided for the development of a 51-acre property that was the subject of both a land use appeal and a mandamus action seeking to invalidate conditions attached to the grant of a conditional use application.The settlement agreement also provided for the development of adjoining property owned by other related property owners.

The Commonwealth Court invalidated the settlement agreement on the basis that the trial court lacked authority to approve the development of properties beyond those involved in the underlying conditional use decision. The court found that in approving the settlement agreement, which provided for the development of properties owned by non-parties, the trial court had exceeded its scope of review pursuant to Sections 1001-A and 1006-A(a) of the Pennsylvania Municipalities Planning Code (the MPC), 53 P.S. §§ 11001-A, 11006- A(a).

Specifically, Section 1001-A of the MPC gives the Common Pleas Court exclusive jurisdiction over appeals of any decision rendered pursuant to Article IX of the MPC, or deemed to have been made thereunder. Further, Section 1006-A of the MPC provides that "the court shall have the power to … set aside or modify any action, decision or order of the governing body … of the municipality brought up on appeal." The court found that both of these sections of the MPC limit a trial court's authority in land use appeals to matters decided by the municipal body and described in the notice of appeal.

Here, the land use appeal was based on a challenge to conditions attached to the grant of conditional use approval. Therefore, the trial court's scope of review was limited to the board's handling of the conditional use application. As such, in approving a settlement agreement allowing for development of properties not involved in the appealed from conditional use decision, the trial court exceeded the scope of the decision rendered by the governing body, and, therefore, exceeded its statutory scope of review.

In sum, the court reversed the trial court's order to the extent that it approved development beyond the 51-acre tract at issue in the underlying conditional use decision and remanded the matter for consideration of whether to approve the remainder of the settlement agreement. On the other hand, the case does contain some good authority for the court's ability to approve a settlement agreement over the objection of party protestants. In this author's opinion, settlement agreements are still a viable option to resolve land use disputes, subject to compliance with reasonable notice requirements.

For more information, please contact Robert W. Gundlach, Jr. at 215.918.3636 or [email protected].