J-A28014-17


NON-PRECEDENTIAL DECISION - SEE SUPERIOR COURT I.O.P. 65.37

SAINT LUKE'S HOSPITAL OF                 :    IN THE SUPERIOR COURT OF
BETHLEHEM, JOHN CAPUANO,                 :          PENNSYLVANIA
DONNA CAPUANO AND MARIA                  :
MONTEIRO                                 :
                                         :
                   Appellants            :
                                         :
           v.                            :
                                         :
736 DELAWARE ASSOCIATES, LLC             :
                                         :
                   Appellees             :         No. 1662 EDA 2017

              Appeal from the Judgment Entered May 18, 2017
               In the Court of Common Pleas of Lehigh County
                    Civil Division at No(s): 2015-C-3223

SAINT LUKE'S HOSPITAL OF                 :    IN THE SUPERIOR COURT OF
BETHLEHEM, PENNSYLVANIA JOHN             :          PENNSYLVANIA
CAPUANO AND DONNA CAPUANO                :
MARIA MONTEIRO                           :
                                         :
                   Appellees             :
                                         :
           v.                            :
                                         :
736 DELAWARE ASSOCIATES, LLC             :
                                         :
                   Appellant             :         No. 1903 EDA 2017

              Appeal from the Judgment Entered May 18, 2017
               In the Court of Common Pleas of Lehigh County
                    Civil Division at No(s): 2015-C-3223


BEFORE: GANTMAN, P.J., PANELLA, J., and DUBOW, J.

MEMORANDUM BY GANTMAN, P.J.:                              FILED JUNE 04, 2018

     Appellants/Cross-Appellees, Saint Luke's Hospital of Bethlehem, John

Capuano,   Donna    Capuano     and   Maria   Monteiro,    and   Appellee/Cross-
J-A28014-17


Appellant, 736 Delaware Associates, LLC, appeal from the judgment entered

in the Lehigh County Court of Common Pleas in this real property/restrictive

covenant dispute. We affirm.

      In its opinions, the trial court correctly set forth the relevant facts and

procedural history of this case. Therefore, we have no need to restate them.

We add that the court held a bench trial on July 1, 2016.              The court

dismissed Appellant’s amended complaint for lack of standing on December

8, 2016. On Monday, December 19, 2016, Appellants timely filed a motion

for post-trial relief. Appellee filed a cross-motion for post-trial relief and for

sanctions on December 29, 2016, which the court denied on January 17,

2017. On April 19, 2017, the court denied Appellants’ motion for post-trial

relief. Appellants filed a praecipe to enter judgment on May 18, 2017, and

the court entered judgment in favor of Appellee in part and in favor of

Appellants in part that same day.

      Appellants timely filed a notice of appeal on May 19, 2017. On June 2,

2017, Appellee timely filed a notice of cross-appeal. The court did not order,

and the parties did not file, concise statements of errors complained of on

appeal pursuant to Pa.R.A.P. 1925(b).

      Appellant/Cross-Appellees raise two issues for our review:

         DID THE TRIAL COURT ERR AS A MATTER OF LAW AND
         ABUSE ITS DISCRETION IN DISMISSING [APPELLANTS’]
         AMENDED COMPLAINT AND HOLDING THAT THE
         CAPUANOS AND MS. MONTEIRO HAD NO STANDING TO
         ENFORCE    THE   SINGLE    DETACHED     DWELLING
         RESTRICTION CONTAINED IN THE 1935 AND 1936 DEEDS,

                                      -2-
J-A28014-17


         NOTWITHSTANDING THEIR UNDISPUTED STATUS AS
         DIRECT SUCCESSORS IN INTEREST IN THE CHAIN OF
         TITLE OF THE GRANTORS/PROMISEES UNDER THOSE
         DEEDS, SAID GRANTORS BEING TRUMAN M. DODSON
         AND HIS WIFE FLORENCE C. DODSON?

         IN THE ALTERNATIVE, DID THE STIPULATED DEEDS AND
         FACTS OF RECORD ESTABLISH AS A MATTER OF LAW
         THAT ST. LUKE’S PREDECESSOR IN INTEREST, WHO
         ACQUIRED PART OF ST. LUKE’S PROPERTY IN 1923, WAS
         AN INTENDED THIRD-PARTY BENEFICIARY OF THE 1920
         DEED SINGLE DETACHED DWELLING RESTRICTION?

(Appellants/Cross-Appellees’ Brief at 6).

      Appellee/Cross-Appellant raises three issues for our review:

         DID THE [TRIAL] COURT ERR IN CONCLUDING THAT
         [APPELLANTS], AS SUCCESSORS-IN-INTEREST TO THE
         PROMISOR OF THE RESTRICTIVE COVENANTS AT ISSUE,
         LACKED STANDING AS A PROMISEE TO ENFORCE THOSE
         RESTRICTIVE COVENANTS?

         DID THE [TRIAL] COURT ERR IN CONCLUDING THAT
         [APPELLANTS] LACKED STANDING AS THIRD PARTY
         BENEFICIARIES TO ENFORCE RESTRICTIVE COVENANTS
         WHERE     NEITHER   [APPELLANTS]   NOR   THEIR
         PREDECESSORS-IN-INTEREST ARE CLEARLY IDENTIFIED
         IN THOSE RESTRICTIVE COVENANTS AND WHERE NO
         COMMON SCHEME OF DEVELOPMENT IS REFELCTED IN
         THOSE COVENANTS?

         DID THE [TRIAL] COURT ABUSE ITS DISCRETION IN
         DENYING [CROSS-APPELLANT’S] MOTION FOR SANCTIONS
         SEEKING ATTORNEYS’ FEES PURSUANT TO 42 PA.C.S.A. §
         2503(7), (9), WHERE THE COURT DID NOT CONDUCT A
         HEARING ON [CROSS-APPELLANT’S] MOTION AND DID
         NOT HAVE AN ADEQUATE RECORD UPON WHICH TO BASE
         ITS DECISION?

(Appellee/Cross-Appellant’s Brief at 2). Appellee/Cross-Appellant’s first and

second issues are restatements of Appellants/Cross-Appellees’ first and


                                     -3-
J-A28014-17


second issues.

     “Our review in a non-jury case is limited to ‘whether the findings of the

trial court are supported by competent evidence and whether the trial court

committed error in the application of law.’”            Hollock v. Erie Ins.

Exchange, 842 A.2d 409, 413 (Pa.Super. 2004), appeal dismissed, 588 Pa.

231, 903 A.2d 1185 (2006) (quoting Bonenberger v. Nationwide Mut.

Ins. Co., 791 A.2d 378, 380 (Pa.Super. 2002)).

        We must grant the court’s findings of fact the same weight
        and effect as the verdict of a jury and, accordingly, may
        disturb the non-jury verdict only if the court’s findings are
        unsupported by competent evidence or the court
        committed legal error that affected the outcome of the
        trial. It is not the role of an appellate court to pass on the
        credibility of witnesses; hence we will not substitute our
        judgment for that of the factfinder. Thus, the test we
        apply is not whether we would have reached the same
        result on the evidence presented, but rather, after due
        consideration of the evidence which the trial court found
        credible, whether the trial court could have reasonably
        reached its conclusion.

Hollock, supra at 414 (internal citations and quotation marks omitted).

“Furthermore, our standard of review demands that we consider the

evidence in a light most favorable to the verdict winner.” Sovereign Bank

v. Valentino, 914 A.2d 415, 420 (Pa.Super. 2006).

        Additionally, “the trial court, as factfinder, is free to believe
        all, part or none of the evidence presented….” Turney
        Media Fuel, Inc. v. Toll Bros., Inc., 725 A.2d 836, 841
        (Pa.Super. 1999). “[T]herefore, assessments of credibility
        and conflicts in evidence are for the trial court to resolve;
        this Court is not permitted to reexamine the weight and
        credibility determinations or substitute our judgment for
        that of the factfinder.” Id.

                                      -4-
J-A28014-17


Sovereign Bank, supra at 420.

      This Court will not disturb a denial of attorneys’ fees absent an abuse

of discretion. In re Padezanin, 937 A.2d 475, 483 (Pa.Super. 2007). An

evidentiary hearing is generally required for a trial court to decide a claim for

attorneys’ fees, unless the facts are undisputed. In re Estate of Burger,

852 A.2d 385, 391 (Pa.Super. 2004), affirmed, 587 Pa. 164, 898 A.2d 547

(2006).

      After a thorough review of the record, the briefs of the parties, the

applicable law, and the well-reasoned opinions of the Honorable Carol K.

McGinley, we conclude the parties’ issues merit no relief.       The trial court

opinions comprehensively discuss and properly dispose of the questions

presented.    (See Trial Court Opinion, filed December 8, 2016, at 11-23)

(finding: (1) original tract conveyed under 1920 deed contained certain

restrictive covenants including prohibited uses and required setbacks; Mr.

Dodson was original promisor or party who made promise to uphold

restrictive covenants; original grantors of 1920 Deed were promisees and

only persons entitled to enforce promise to uphold restrictive covenants;

Appellants were     not promisees of restrictive      covenants;      accordingly,

Appellants have no right to enforce restrictive covenant as promisees of

1920 deed and restrictive covenants; (2) restrictions in 1920 deed and

1935/1936     deeds   contained    no    language   providing   for    third-party

beneficiary status to properties which Appellants currently own; restrictions


                                        -5-
J-A28014-17


in 1920 and 1935/1936 deeds did not provide for any third-party

beneficiaries; restrictions in deeds did not mention surrounding property

owners in any manner; thus, deeds did not contemplate Appellants as third-

party   beneficiaries   to   single-detached-dwelling   restriction;   concerning

whether parties’ situation or surrounding circumstances during transfer of

property evidenced intent to make Appellants third-party beneficiaries to

restriction, 1920 deed specified single detached dwelling house may be

erected along Delaware Avenue frontage only of original tract; original tract,

however, included property in addition to Delaware Avenue frontage;

original tract also included parcel two of Appellee’s current property, which

fronts Fiot Street, and Appellants’ individual plots, which front Seneca

Street; single-detached-dwelling restriction in 1920 deed applied only to

property that fronts Delaware Avenue; per 1920 deed, any parcel that did

not front Delaware Avenue or violate setback requirements could have been

erected so long as purpose of building did not violate prohibited uses

restriction; subsequent owners of lots not fronting Delaware Avenue were

not intended to enjoy benefit of promises made by owners of parcels facing

Delaware Avenue, because whole of area was not intended by 1920 deed as

general plan or scheme of development, and there is no conformity with any

general plan; deeds granting five parcels at issue to parties did not contain

single-detached-dwelling restriction; these conveyances established no

general plan or scheme of development; therefore, Appellants were not


                                      -6-
J-A28014-17


intended third-party beneficiaries of restrictive covenant in 1920 and

1935/1936 deeds and lacked standing to enforce single-detached-dwelling

restriction). (See also Supplemental Trial Court Opinion, filed January 17,

2017, at 2-3) (finding: (3) Appellants did not initiate current case to be

arbitrary, vexatious, or in bad faith; timing of Appellants’ suit did not

warrant sanctions; court declined to address Appellee’s alternative defenses,

i.e., unclean hands and laches, because those theories are defenses to

substantive issues, which court did not reach because Appellants lacked

standing to bring claims; therefore, case did not progress so far as to put

responsive defenses before court for disposition). We agree with the court’s

decision on Appellants/Cross-Appellees’ lack of standing and lack of third-

party beneficiary status. See Sovereign Bank, supra. Further, we defer

to the court’s decision to deny Appellee/Cross Appellant’s request for

attorney’s fees. See In re Padezanin, supra. Accordingly, we affirm on

the basis of the trial court’s opinions.

      Judgment affirmed.


Judgment Entered.




Joseph D. Seletyn, Esq.
Prothonotary



Date: 6/4/18


                                       -7-
J-A28014-17




              -8-
                                                                               Circulated 05/18/2018 12:07 PM




    IN THE COURT OF COMMON PLEAS OF LEHIGH COUNTY, PENNSYLVANIA
                        CIVIL DIVISION - LAW

ST. LUKE'S HOSPITAL OF BETHLEHEM,
PENNSYLVANIA, JOHN CAPUANO,
DONNA CAPUANO, and MARIA MONTEIRO,
                       Plaintiffs
                                                                     No. 2015-C-3223
                      v.
736 DELAWARE ASSOCIATES, LLC,


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                      Kevin T. Fogerty, Esquire                                  )>("')

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                            For Plaintiffs                                           Cl
                                                                                     VI

                      Blake C. Marles, Esquire
                             For Defendant


                ***************************************************

                                           DECISION

CAROL K. McGINLEY, J.

       The above-captioned matter was heard before the court sitting without a jury. The court

having heard the testimony, and having examined the proofs offered by the parties, and having

heard the arguments of counsel, and the case having been submitted for decision, now makes the

following findings of fact and conclusions of law.

   The following findings of fact have been stipulated to by the parties:
St. Luke's Hospital ofBethlehem, Pennsylvania, John Capuano, Donna Capuano, and Maria Monteiro v. 736
Delaware Associates, LLC; Case No.: 2015-C-3223


    1. Plaintiff, Saint Luke's Hospital of Bethlehem, Pennsylvania ("St. Luke's") is a
        not-for-profit corporation which is the owner of a parcel ofland located at 763 Seneca
        Street, Fountain Hill, Lehigh County, PA ("the St. Luke's Property).

    2. Plaintiffs, John Capuano and Donna Capuano, are husband and wife, who own and reside
       at a property located at 751 Seneca Street, Fountain Hill, Lehigh County, PA ("the
       Capuanos' Property").

    3. Plaintiff, Maria Monteiro, owns and resides at a property located at 747 Seneca Street,
       Fountain Hill, Lehigh County, PA ("the Monteiro Property").

    4. Defendant, 736 Delaware Associates, LLC ("736 LLC") is a limited liability company
       owning a property at 736 Delaware Avenue, Fountain Hill, Lehigh County, PA ("the 736
       Delaware Property").

    5. 736 LLC acquired legal title to the 736 Delaware Property by Deed dated June 20, 2006,
       recorded at Document ID No. 7355819, in the office of the Lehigh County Recorder of
       Deeds, on July 21, 2006 (the "2006 Deed"). Settlement on 736 LLC's purchase of the
       736 Delaware Property took place on June 27, 2006.

    6. The 736 Delaware Property actually consists of two parcels, one being 18,312.5 square
       feet (146.5 feet x 125.0 feet), having access only to Delaware Avenue; and the other
       consisting of 15 ,640 square feet, having access only to Fiat Street.

    7. The two parcels are described in the 2006 Deed as:

         (a) 736 Delaware Avenue (Tract 1), and

         (b) a parcel with frontage along Fiot Street located approximately 125' from the
             intersection with Delaware Avenue.

     8. 736 LLC is wholly owned by Dr. Hayman Salib and his wife, which was fanned to
        acquire and develop the 736 Delaware Property.
     9. Dr. Salib entered into a Contract of Sale to purchase the 736 Delaware Property expressly
        contingent upon obtaining final approval to use the property for medical offices.

     10. Upon obtaining zoning approval to use the 736 Delaware Property for medical offices
         using the single family house which was already on the property with a two-story
         addition to the rear, 736 LLC acquired the property for $345,000.

     11. 736 LLC, Dr. Salib, and his wife were represented by Attorney Vaughn Terrinoni for
         both the acquisition of the 736 Delaware Property and for obtaining pre-closing zoning
         approvals.


                                                      2
St. Luke's Hospital ofBethlehem, Pennsylvania, John Capuano. Donna Capuano, and Maria Monteiro v. 736
Delaware Associates, LLC; Case No.: 2015-C-3223


    12. Prior to proceeding to settlement/closing on its purchase of the 736 Delaware Property,
        Dr. Hayman Salib, the principal of736 LLC, retained attorney Vaughn Terrinoni and
        architects to review the development potential of the property as medical offices.

    13. The 736 Delaware Property and other adjoining properties, including the St. Luke's
        Property, the Capuanos' Property and the Monteiro Property were at one time part of a
        single tract ofland (the "Original Tract"), which was encumbered by a restrictive
        covenant contained first in a Deed dated November 27, 1920.

    14. The aforementioned Deed dated November 27, 1920 which first set forth the restrictive
        covenant was a conveyance from James M. Degnan and Katherine M. Degnan, husband
        and wife, and Eldredge P. Wilbur and Lilian L. Wilbur, husband and wife (the "Original
        Grantors"), to Truman M. Dodson. The restrictive covenant states in pertinent part as
        follows:
               "It is expressly covenanted and agreed by and between the parties
               hereto that no buildings other than single detached dwelling
               houses to cost not less than Eight Thousand ($8, 000) Dollars each,
               shall be erected along the Delaware Avenue frontage on the
               herewith described premises, nor shall the front walls of such
               dwellings approach the street curb line nearer than fifty (50 ') feet
               porches nearer than forty-one feet six inches (41 '6"), not including
               the steps. The same restrictions apply to that part of the frontage
               on Fiot Street that lies within one hundred and twenty (120 ') feet
               of the Delaware Avenue intersection, with the exception ofprivate
               garages for which there is no restriction as to the price or
               location. It is further covenanted and agreed that no bone boiling
                establishment, blacksmith shop, tallow or starch manufactory,
                liquor saloon or place for the sale of intoxicating liquors, public
                automobile garage, or auto or machine repair shop shall ever be
                erected or conducted on the herein described premises or any part
                thereof No outhouses or chicken coops on Delaware Avenue
               property."

     15. The different portions of the restrictive covenant set forth in the November
         27, 1920 Deed will hereinafter be referred to as follows:




                                                      3
St. Luke's Hospital ofBethlehem, Pennsylvania, John Capuano, Donna Capuano, andMana Monteiro v. 736
Delaware Associates, LLC; Case No.: 2015-C-3223


               A.      It is expressly covenanted and agreed by and between the parties hereto
           that no buildings other than single detached dwelling houses to cost not less than
           Eight Thousand ($8,000) Dollars each, shall be erected along the Delaware Avenue
           frontage on the herewith described premises[.]

            (Said restriction shall hereinafter be referred to as the "1920 Deed Single Detached
            Dwelling Restriction");

                B.      [Njor shall the front walls ofsuch dwellings approach the street curb line
            nearer than fifty (50') feet porches nearer than forty-one feet six inches (41 '6"), not
            including the steps. The same restrictions apply to that part ofthe frontage on Flot
            Street that lies within one hundred and twenty (120 ') feet ofthe Delaware Avenue
            intersection, with the exception ofprivate garages for which there is no restriction as
            to the price or location.

            (Said restriction shall hereinafter be referred to as the "Setback Restriction"); and

                C.     It is farther covenanted and agreed that no bone boiling establishment,
            blacksmith shop, tallow or starch manufactory, liquor saloon or place for the sale of
            intoxicating liquors, public automobile garage, or auto or machine repair shop shall
            ever be erected or conducted on the herein described premises or any part thereof
            No outhouses or chicken coops on Delaware Avenue property. "

            (Said restriction shall hereinafter be referred to as the "1920 Deed Prohibited Uses
            Restriction").

    16. The previously referenced November 27, 1920, Deed, first containing the restrictive
        covenant quoted in the preceding paragraph, described and conveyed the Original Tract
        subject to that covenant, as follows:

                Situate on the northeast side of Fiat Street and extending from
                Delaware Ave to Seneca Street, containing in front or breadth on
                said Fiot Street three hundred and sixteen (316) feet and extending
                in length or depth. northeastward of that width between parallel
                lines at right angles to said Fiat Street; the northwest line thereof
                extending along the southeast side of the said Delaware Avenue
                and the southeast line thereof extending along the northwest side of
                the said Seneca Street two hundred (200) feet to the line of land of
                Tinsley Jeter.

 The Original Tract was bounded as follows:
                      a.     by Delaware Avenue on the northwest side;

                         b.      by Seneca Street on the southeast side;

                                                     4
St. Luke's Hospital of Bethlehem, Pennsylvania, John Capuano, Donna Capuano, and Maria Monteiro v. 736
Delaware Associates, LLC; Case No.: 2015-C-3223


                           c.     by Fiot Street on the southwest side; and

                           d.     on the northeast side, by a line parallel to Fiot Street which was
                                  located 200 feet northeast of Fiot Street.

    17. By Deed dated November 1, 1935 and recorded in Lehigh County Deed Book Vol. 551,
        Page 592, the owner of the Original Tract, Truman M. Dodson, and his wife, Florence C.
        Dodson, conveyed to John E. Dodson and Evelyn M. Dodson, husband and wife, out of
        the Original Tract, a 66.66 foot by 100 foot rectangular parcel fronting on Delaware
        A venue. With respect to this conveyance:

                 a.        This parcel occupied the middle one-third (66.66 feet) of the total
                           Delaware Avenue frontage of the Original Tract (said total frontage being
                           200 feet);

                 b.        The Deed for this parcel contains the following restriction, which is
                           substantially similar to the 1920 Deed Single Detached Dwelling
                           Restriction:

                                  "It is expressly covenanted and agreed by and between the parties
                                  hereto that no buildings other than single detached dwelling
                                  houses to cost not less than Eight Thousand Dollars ($8,000.00)
                                  each, shall be erected on the herein described premises," (said
                                  restriction will hereinafter be referred to as the "Single Detached
                                  Dwelling Restriction");

                      c.   The Deed for this parcel also contains the following restriction, which is
                           substantially similar to the 1920 Deed Prohibited Uses Restriction:

                                   "It is further covenanted and agreed that no bone boiling
                                   establishment, blacksmith shop, tallow or starch manufactory,
                                   liquor saloon or place for the sale of intoxicating liquors, public
                                   automobile garage, or auto or machine repair shop or outhouses
                                   or chicken coops shall ever be erected or conducted on the herein
                                   described premises or any part thereof" (said restriction will
                                   hereinafter be referred to as the "Prohibited Uses Restriction");

                 d.        The Deed for this parcel does not contain the Setback Restriction; and


                 e.        This parcel is entirely within the boundaries of the 736 Delaware Property.

     18. By Deed dated April 8, 1936 and recorded in Lehigh County Deed Book Vol. 554, Page
         374, the owner of the Original Tract, Truman M. Dodson, and his wife, Florence C.

                                                       5
St. Luke's Hospital ofBethlehem. Pennsylvania, John Capuano, Donna Capuano, and Maria Monteiro v. 736
Delaware Associates, LLC; Case No.: 2015-C-3223


        Dodson, conveyed to Truman M. Dodson, Jr. out of the Original Tract a 66.67 foot by
        100 foot rectangular parcel fronting on Delaware Avenue. With respect to this
        conveyance:

                a. This parcel occupied the northern one-third (66.67 feet) of the total Delaware
                   Avenue frontage of the Original Tract (said total frontage being 200 feet);

                b. The Deed for this parcel contains the Single Detached Dwelling Restriction
                   and the Prohibited Uses Restriction;

                c. The Deed for this parcel does not contain the Setback Restriction; and

                d. This parcel is entirely within the boundaries of the 736 Delaware Property.

    19. By Deed dated April 8, 1936 and recorded in Lehigh County Deed Book Vol. 558, Page
        13 3, the owner of the Original Tract, Truman M. Dodson, and his wife, Florence C.
        Dodson, conveyed to Charles Millard Dodson out of the Original Tract a 66.67 foot by
        100 foot rectangular parcel fronting on Delaware Avenue. With respect to this
        conveyance:
                 a. This parcel occupied the southern one-third (66.67 feet) of the total Delaware
                    Avenue frontage of the Original Tract (said total frontage being 200 feet);

                 b. The Deed for this parcel contains the Single Detached Dwelling Restriction
                    and the Prohibited Uses Restriction;

                 c. The Deed for this parcel does not contain the Setback Restriction; and

                 d. This parcel is partially within the boundaries of the 736 Delaware Property.

    20. Following Truman Dodson's death in 1941, the three lots along Delaware Avenue which
        had been conveyed in 1935 and 1936 were reacquired by the Trustees under the will of
        Truman Dodson, such that these three properties were again held by a common owner by
        1943.

    21. The following Deeds conveyed the three lots along Delaware Avenue to the Executors
        and/or Trustees under the will of Truman Dodson in .1942 and 1943, and the Deeds for
        each of these conveyances contain the Single Detached Dwelling Restriction and the
        Prohibited Uses Restriction, but they do not contain the Setback Restriction. These
        Deeds are:
                (i)    Lehigh County Deed Book Vol. 615, Page 300, dated April 10, 1942, from
                       Truman W. Dodson, Jr., et ux. to Florence Casey Dodson, et al.;



                                                      6
St. Luke's Hospital ofBethlehem, Pennsylvania, John Capuano, Donna Capuano, and Maria Monteiro v. 736
Delaware Associates, LLC; Case No.: 2015-C-3223


                (ii)     Lehigh County Deed Book Vol. 616, Page 347, dated April 7, 1942, from
                         Charles Dodson et ux. to Florence Casey Dodson, et al.; and

                (iii)    Lehigh County Deed Book Vol. 621, Page 293, dated February l, 1943,
                         from John E. Dodson, et ux. to Florence Casey Dodson, et al.

        22. The two existing lots along Delaware Avenue which occupy the entire Delaware
            A venue frontage of the Original Tract were first laid out and described in the
            following two Deeds:

           A. A Deed recorded at Vol. 844, Page 688, dated March 7, 1955, from the Trustees
           under the will. of Truman M. Dodson to Theodore F.M. Gray and Louise H. Gray,
           husband and wife (conveying Tract No. 1 of the 736 Delaware Property); and

            B. A Deed recorded at Vol. 902, Page 675, dated August 7, 1957 (conveying 725
            Fiat Street).

            The Deed at Vol. 844, Page 688, dated March 7, 1955 (Tract No. 1 of the 736
            Delaware Property) does not reference the 1920 Deed restrictions. The Deed at
            Vol. 902, Page 675, dated August 7, 1957 (725 Fiot Street) does not recite the
            1920 Deed restrictions, but does state, "Under and subject to certain building
            restrictions of record."

        23. Tract 2 of the 736 Delaware Property, which tract has street frontage only on Fiat
            Street, was first laid out and described by Deed at Vol. 910, Page 46, dated
            December 2, 1957 from the Trustees under the will of Truman M. Dodson to
            Theodore F.N. Gray. Prior to 1957, this property did not exist as a separate lot of
            record, and the 1957 deed creating this lot does not reference the 1920 Deed
            restrictions.

        24. The next deed in the chain of title of the 736 Delaware Property is that dated
            September 11, 1963 from The First National Bank and Trust Company of Bethlehem,
          · Executor of the Estate of Theodore F.N. Gray, to Robert C. Smith and Irene E. Smith,
            husband and wife, recorded at Deed Book Vol. I 046, Page 79. This deed does not
            reference the 1920 Deed restrictions.

         25. The current deed in the chain of title of the 736 Delaware Property, the June 20, 2006
             Deed from Irene E. Smith to 736 LLC, does not reference the 1920 Deed restrictions.

         26. The August 12, 1965 Deed from Frank S. Capuano and Josephine Capuano to John
             Capuano and Mary Capuano (751 Seneca Street) does not reference the 1920 Deed
             restrictions.



                                                      7
St. Luke's Hospital of Bethlehem, Pennsylvania, John Capuano, Donna Capuano, and Maria Monteiro v. 736
Delaware Associates, LLC; Case No.: 20 l 5-C-3223


        27. The Deed dated May 15, 1990 from Lawrence G. Applegate and Diane L. Applegate,
            husband and wife, to Maria D. Monteiro (747 Seneca Street) does not reference the
            1920 Deed restrictions.

        28. The October 19, 2015 Deed from Anthony M. Poroszlai, Jr. to Saint Luke's Hospital
            of Bethlehem, PA (763 Seneca Street) does not recite the 1920 Deed restrictions, but
            does state, "Under and subject to all covenants, conditions, easements and restrictions
            as appear ofrecord."
        29. The September 30, 1976 Deed from Joseph J. Klo to Michael S. Kio (725 Fiot Street)
            does not recite the 1920 Deed restrictions, but does state, "Under and subject to
            certain building restrictions of record."

        30. The residence on the 736 Delaware Property was constructed in or about 1935.

        31. The residence on the Klo Property at Delaware Avenue and Fiot Street (725 Fiot) was
            constructed in or about 1957.

        32. By Deed dated January 2, 1923, and recorded in Lehigh County Deed Book Vol. 356,
            Page 247, the owner of the Original Tract, Truman M. Dodson, and his wife
            conveyed to Patsy Tallarico, Joseph Tallarico, and Guissippi Tallarico a 40 foot by 85
            foot rectangular parcel out of the Original Tract; this parcel was at the northerly
            comer of Seneca and Fiot Streets, and extended 40 feet along Seneca Street and 85
            feet along Fiot Street. This parcel is part of the current St. Luke's Property (763
            Seneca Street).

         3 3. The aforementioned January 2, 1923 Deed for the 40 foot by 85 foot rectangular
              parcel at the northerly comer of Seneca and Fiot Streets repeats the following
              restrictive covenant language from the November 27, 1920 Deed for the Original
              Tract:
               It is further covenanted and agreed that no bone boiling establishment,
               blacksmith shop, tallow or starch manufactory, liquor saloon or place
              for the sale of intoxicating liquors, public automobile garage, or auto or
               machine repair shop shall ever be erected or conducted on the herein
               described premises or any part thereof
         34. Beginning in 1946, the Trustees under the Will of Truman Dodson began conveying
             lots out of the commonly held property owned by the trust.

         35. The Trustees first conveyed a lot along Seneca Street to Dorothy Lisle in 1946. This
             deed does not reference the 1920 Deed restrictions.

         36. The Capuanos' Property (located at 751 Seneca Street) in its current dimensions was
             first laid out and described in a Deed from Frank S. Capuano and Josephine Capuano,
             husband and wife, to John Capuano and Mary Capuano, husband and wife, dated
                                                       8
St. Luke's Hospital ofBethlehem, Pennsylvania, John Capuano, Donna Capuano, andMaria Monteiro v. 736
Delaware Associates, UC; Case No.: 20!5-C-3223


            August 12, 1965 and recorded at Lehigh County Deed Book Vol. 1076, p. 405. This
            Deed does not reference the 1920 Deed restrictions.

        37. The Monteiro Property (located at 747 Seneca Street) in its current dimensions was
            first laid out and described in a Deed from Frank S. Capuano and Josephine Capuano,
            husband and wife, and John Capuano and Mary Capuano, husband and wife, to Frank
            S. Capuano and Josephine Capuano, husband and wife, dated August 12, 1965 and
            recorded at Lehigh County Deed Book Vol. 1076, p. 407. This Deed does not
            reference the 1920 Deed restrictions.

        38. The St. Luke's Property (763 Seneca Street) actually consists of two separate tracts
            acquired by St. Luke's predecessor in title in separate deeds, one dated January 2,
            1923 and the other dated December 11, 1959. As set forth in Joint Stipulation of Fact
            No. 3 .1, said January 2, 1923 Deed contains the restrictive covenant language
            described therein. The Deed in the chain of title subsequent to said January 2, 1923
            Deed, which is dated June 18, 1958 and recorded in Deed Book Vol. 921, Page 485,
            does not reference the 1920 Deed restrictions. The December 11, 1959 Deed does not
            reference the 1920 Deed restrictions.

        39. The property owners abutting the 736 Delaware Property to the north and south and
           · fronting on Delaware Avenue are not litigants in this matter; both of these abutting
             properties contain single family residential dwellings thereon which are used as
             residences.

        40. A residence was constructed on the 736 Delaware Property in 1935 which a witness
            for the Defendant would testify did not comport with the 50 foot setback from
            Delaware Avenue found in the 1920 deed restrictions. That residence was
            demolished by Defendant in 2015.

        41. The lot known as 725 Fiot Street, at the comer ofFiot Street and Delaware Avenue,
            was created in a rectangular configuration which is 53.5 feet along Delaware Avenue
            and 125 feet along Fiot Street.
         42. A residence was constructed at 725 Fiot Street in or about 1957 which a witness for
             the Defendant would testify did not comport with the 50 foot setback from Fiot Street
             found in the 1920 Deed restrictions. That residence still exists.

         43. On June 23, 2006, Crest Abstract faxed to Attorney Terrinoni 19 pages titled
             "Important Fax Memo," which stated on the Fax Cover Sheet in the reference section:
             "Restrictions for 736 Delaware."

         44. Prior to Defendant purchasing the 736 Delaware Property, its attorney was made
             aware of - - and acknowledged being made aware of, by having his office note on the
             June 23, 2006, facsimile transmission alerting him to the existence of "restrictions for


                                                     9
St. Luke's Hospital of Bethlehem, Pennsylvania, John Capuano, Donna Capuano, andMaria Monteiro v. 736
Delaware Associates, LLC; Case No.: 2015-C-3223


            736 Delaware," "Ok per VAT" -- the existence of the 1920 Deed restrictions in the
            chain of title of the 736 Delaware Property.

        45. 736 LLC sought and obtained Borough of Fountain Hill Zoning Hearing Board
            approval in 2006 to use the 736 Delaware Property and the existing 1935 single
            family dwelling thereon with a two-story additionfor medical office purposes (the
            "2006 Approval").

        46. 736 LLC again appeared before the Zoning Hearing Board in 2007 and obtained
            variances regarding signage and off-street loading (the "2007 Approval").

        4 7. Neither the 2006 Approval nor the 2007 Approval were appealed.

        48. The 736 Delaware Property was not developed following the 2007 Approval.

        49. St. Luke's first made known its intent to try to enforce the 1920 Deed restrictions by
            letter from St. Luke's counsel dated October 14, 2015.

        50. St. Luke's did not obtain the St. Luke's Property until October 19, 2015.

        51. At a Special Meeting-Public Hearing of Borough Council of Fountain Hill held on
            July 23, 2008 regarding a new Zoning Ordinance, during the public comments portion
            of the meeting, Dave Johnson of St. Luke's Hospital commented that the new Zoning
            Ordinance addresses the needs of the Hospital.

        52. Defendant again proceeded to the Zoning Hearing Board in 2014, which confirmed
            the appropriateness of a medical office use for the 736 Delaware Property,
            determined that the residence then on the 736 Delaware Property "would not be
            feasible or reasonably reused," that it was unsuitable for the intended medical office
            use, and could be razed (the "2014 Approval").

        53. The medical office building proposed by Defendant in 2014 had a smaller footprint
            than the one proposed in 2007 as an extension of the then-existing home on the 736
            Delaware Property.

        54. The 2014 proposed medical office building is one story, the building originally
            approved in 2006 was a two-story.

        5 5. 73 6 LLC applied for land development approval in 2015 for a new medical office
             building on the 736 Delaware Property to accommodate Dr. Salib's medical practice.

        56. Land development approval was granted by the Borough of Fountain Hill Planning
            Commission on May 11, 2015, pursuant to Resolution 2015-00.


                                                    10
St. Luke's Hospital of Bethlehem, Pennsylvania, John Capuano, Donna Capuano, and'Maria Monteiro v. 736
Delaware Associates, LLC; Case No.: 2015-C-3223


        57. The Plaintiffs did not appeal the grant ofland development approval.

        58. In furtherance of its approvals, and as a requirement for the commencement of
            construction, Defendant entered into a series of agreements with the Borough,
            including an Improvements, Security, Indemnification and Maintenance Agreement,
            and a Stormwater Best Management Practices Operations and Maintenance
            Agreement, both of which are now recorded in the Office of the Recorder of Deeds,
            and have bound the 736 Delaware Property since before St. Luke's gave notice of its
            intention to enforce the 1920 Deed restrictions.

        59. In the course of the land development process, 736 Delaware sought two additional
            zoning variances, one in August 2014 and the other in October 2014, both of which
            were denied.

        60. Plaintiffs John Capuano and Donna Capuano were present at the August 2014 Zoning
            Hearing Board meeting involving the 736 Delaware Property; St. Luke's was
            represented by legal counsel at that hearing; and both the Capuanos and St. Luke's
            objected to the requested variances at that meeting.

         61. Plaintiff St. Luke's was represented by legal counsel at the October2014 Zoning
             Hearing Board meeting involving the 736 Delaware Property, and St. Luke's objected
             to the requested variances at that meeting.

         62. Final land development approval was obtained in August 2015 without requiring the
             variances, which were denied in 2014.

         63. The land development approved was for a medical office building.

         64. The medical office building use is consistent with the use criteria mandated in the
             Borough of Fountain Hill's Residential-Office (RO) zoning district.

         65. St. Luke's first made known its intentto try to enforce the 1920 Deed restrictions by
             letter from St. Luke's counsel dated October 14, 2015.

         66. The Borough of Fountain Hill rezoned the Delaware Avenue area which includes
             most of the 736 Delaware Property from Medium High Density Residential to
             Residential-Office, where offices are permitted.



CONCLUSIONS OF LAW

     1. "The persons initially entitled to enforce the obligation of a promise respecting the use of
        land are the promisee and such third persons as are also beneficiaries of the promise."
                                                      11
St. Luke's Hospital of Bethlehem, Pennsylvania, John Capuano, Donna Capuano, and Maria Monteiro v. 736
Delaware Associates, LLC; Case No.: 2015-C-3223


        Mariner v. Rohanna, 371 Pa. 615, 92 A.2d 219 (1952) quoting Restatement ofthe Law of
        Property § 541.

    2. The promisees of the 1920 restrictive covenants were the Original Granters of the
       Original Tract.

    3. The language of the restrictive covenants set forth in the deeds to Plaintiffs' land did not
       provide for the owners of Plaintiffs' land to be third-party beneficiaries of the restrictive
       covenant.

    4. The surrounding circumstances of a conveyance of land can establish that owners of land
       other than the grantor and conveyee are third-party beneficiaries to a restrictive covenant
       where the restrictive covenant was imposed to carry out a general scheme for the
       development ofreal property. Fey v. Swick, 308 Pa. Super. 311, 454 A.2d 551 (1982)
       citing Korn v. Campbell, 192 N.Y. 490, 85 N.E. 687 (1908).

    5. The conveyance of the Original Tract to Truman M. Dodson in 1920 was conveyed as
       one parcel.

    6. The 1920 Deed did not establish a general scheme for the development of real property.

    7. The subsequent transfer of Original Tract parcels never established a general scheme or
       development of the land.

    8. Plaintiffs were not intended third-party beneficiaries of the restrictive covenant.

    9. Plaintiffs lack standing to enforce the restrictive covenant.


DISCUSSION

        Plaintiffs filed their Amended Complaint on February 29, 2016, and asserted that 736

LLC's attempt to construct a commercial building was in violation of a 1920 restrictive covenant

that only permitted a single detached dwelling house on the 736 Delaware Property. Plaintiffs

sought equitable relief in the form of a declaration that 736 LLC's proposed commercial use and

construction of a commercial building was in violation of the aforementioned restrictive

covenant. Plaintiffs further requested relief barring, precluding, and enjoining 736 LLC from

using the 736 Delaware Property for commercial purposes and from constructing any
                                                     12
St. Luke's Hospital ofBethlehem, Pennsylvania, John Capuano, Donna Capuano, andMaria Monteiro v. 736
Delaware Associates, LLC; Case No.: 20 J 5-C-3223


commercial building thereon; and from using the 736 Delaware Property for any use other than a

single detached dwelling house; and any additional relief, including reimbursement oflegal fees

and costs.

        736 LLC answered Plaintiffs' Amended Complaint and filed New Matter and

Counterclaims. First, 736 LLC asserted that the Plaintiffs lack standing because none of the

Plaintiffs' properties were beneficiaries of the single detached dwelling house restriction. Next,

736 LLC asserted that St. Luke's bought t�e St. Luke's Property only to thwart 736 LLC's

building plans and that St. Luke's actions in opposing the proposed use of the 736 Delaware

Property were done in bad faith and with unclean hands. In addition, 736 LLC asserted that St.

Luke's was guilty oflaches because it had constructive notice of its plan to construct a medical

office since 2006, but did not notify 736 LLC of its objection until 2015. 736 LLC also asserted

that in the 95 years since the deed restrictions were put in place, the character of the

neighborhood where the Property is located has changed dramatically, making the restriction

obsolete.

        736 LLC requested damages because it asserted that Plaintiffs' actions were taken with ill

motive, bad faith, and with unclean hands and constituted Iaches, 736 LLC further requested a

declaratory determination that the use of the 736 Delaware Property for medical services is not

precluded by the 1920 Deed restrictions; and, further, that the building restrictions in the 1920

Deed are void and of no force and effect because: they have not been enforced; their intended

purpose no longer exists; the character of the neighborhood has substantially changed; the

restrictions are not enforceable by the Plaintiffs; Parcel 2 of the 736 Delaware Property is




                                                    13
St. Luke's Hospital of Bethlehem, Pennsylvania, John Capuano, Donna Capuano, andMaria Monteiro v. 736
Delaware Associates, LLC; Case No.: 2015-C-3223


unencumbered by the single detached dwelling house covenant because it does not front on

Delaware Avenue and is not within 120' of the Delaware Avenue intersection.

        The first issue we address is whether the Plaintiffs have standing to enforce the restrictive

covenant they assert exists on the 736 Delaware Property.

        "The persons initially entitled to enforce the obligation of a promise respecting the use of

land are the promisee and such third persons as are also beneficiaries of the promise." Mariner

v. Rohanna, 371 Pa. 615, 92 A.2d 219 (1952), quoting Restatement ofthe Law ofProperty§ 541.

        In this matter, Plaintiffs were not promisees of the covenant. The Original Tract

conveyed in 1920 included the 736 Delaware Property, the St. Luke's Property, the Capuanos'

Property, and the Monteiro Property. The 1920 Deed was conveyed from James M. Degnan and

Katherine M. Degnan, husband and wife, and Eldredge P. Wilbur and Lilian L. Wilbur, husband

and wife, to Truman M. Dodson. Truman M. Dodson is the promisor in this scenario, the party

making the promise to uphold the restrictive covenant; the Original Grantors are the promisees,

the parties on the receiving end of the promise. As such, the Plaintiffs do not have any right to

enforce the restrictive covenant as promisees of the 1920 restrictive covenant.

        Therefore, in order to determine if the Plaintiffs have standing to pursue this litigation, it

is necessary to determine if the Plaintiffs were intended third-party beneficiaries of the restrictive

covenant. In other words, was the restrictive covenant imposed on the 736 Delaware Property

for the benefit of land owned by St. Luke's, the Capuanos, and/or Ms. Monteiro? In making

such a determination, we look at the terms of the restriction and/or to the situation of the parties

and the surrounding circumstances to determine if there was a clear intention of the grantors to

establish the restriction for the benefit of one of the owners in Plaintiffs' chain of title.


                                                    14
St. Luke's Hospital of Bethlehem, Pennsylvania, Jahn Capuano, Donna Capuano, andMaria Monteiro v. 736
Delaware Associates, LLC; Case No.: 2015-C-3223


        As the Court stated in Mariner:

        [A] property owner, regardless of whether he is conveying an entire tract not a
        part of a plan of lots, or whether he is conveying one or several lots of a plan of
        lots, has the right to dispose of his property with a limited restriction on its use,
        however much the restriction may affect the value or the nature of the estate.
        Cowell v. Colorado Spring Co., 100 U.S. 55, 2 L.Ed. 547; Fanning's License, 23
        Pa. Super. 622, at page 627. The benefits of the restriction need not run to the
        grantor-promisee alone or to the owners of other lots in a plan of lots deeded by
        him. As in the case of other covenants, third parties may be made the
        beneficiaries of a restriction and may enjoin its breach so long as it is clearly
        shown that the covenant was for their benefit.

Id. at 618, 92 A.2d 221, citing Restatement of the Law ofProperty § 46.

        In Mariner, the grantor along with five adjoining property owners filed a bill in equity to

enjoin defendant from continuing to use his land as a junkyard. The restriction at issue

prevented the grantee from, among other things, establishing any noxious or offensive trade such

as the storing of second hand automobiles, "to the hurt, damage or annoyance of other adjoining

property owners, who, by these presents, may have the right to enjoin or restrain the same." The
                                                                                              '
language of the restrictive covenant clearly provided that the covenant was for the benefit of the

adjoining landowners; accordingly, the adjoining landowners, as third-party beneficiaries, "were

as much a part of the contract as if they had been described by name and address in the deed."

Id. at 618, 92 A.2d 220�21.

        In Appeal ofJ.C. Grille, Inc., 181 Pa. Super. 456, 124 A.2d 659 (1956), J.C. Grille, Inc.

had filed with the Pennsylvania Liquor Control Board an application to transfer a liquor license

within the City of Philadelphia. The application was protested by persons residing in the vicinity

of the premises to which the license was to be transferred. The Board refused the application;

J.C. Grille, Inc. appealed, and the trial judge dismissed the appeal and sustained the order

refusing the transfer. An appeal to the Superior Court was taken and the Court was asked to
                                                     15
St. Luke's Hospital of Bethlehem, Pennsylvania, John Capuano, Donna Capuano, andMaria Monteiro v. 736
Delaware Associates, LLC; Case No.: 2015-C-3223


decide whether nearby neighbors had the right to enforce a restriction on a building precluding

the sale and consumption of alcohol. The restriction provided:

        [w]hereas it is the intent and purpose of the said Owners to impose upon the
        above described premises certain Building Restrictions for the proper
        improvement and protection of the general neighborhood, and to provide proper
        and sufficient Commercial Area for the Service, Comfort and Convenience ofsaid
        neighborhood, the said Owners do and hereby declare that for a period of twenty
        years from the date hereof no Building shall be erected or occupied on the above
        described premises for the sale of Alcoholic or Spirituous Liquors from
        consumption on the premises ...

Id at 460-61, 124 A.2d at 662 (emphasis added). The Court stated:

        'The right of a person not a party thereto to enforce in equity a restriction on the
        use of property depends on whether or not the restrictive covenant or agreement
        was imposed on the land owned by defendant for the benefit of the land owned by
        plaintiffs who are seeking to enforce the restriction; if so, equitable relief should
        be granted to the plaintiffs, if not plaintiff should be denied the equitable relief
        prayed. The question is determined largely by the intention of the parties, and it
        must appear from the terms of the grant or from the situation of the parties and the
        surrounding circumstances that it was the intention of the grantor, when inserting
        the restriction, to create a servitude or equity in the nature of an easement which
        would inure to the benefit of complainant's land and equitably be annexed as an
        appurtenance. A restriction imposed for the benefit of the owner of other property
        creating an equitable right in the nature of an easement in his behalf may be
        enforced in equity without regard to whether it is inserted by way of condition,
        covenant, or otherwise. Complainant's right does not rest on whether or not the
        restriction runs with the land, nor on privity of estate or contract, but there must
        be found somewhere the clear intent to establish the restriction for the benefit of
        the party attempting to restrain its enfringement, of which defendant must have
         either actual or constructive notice. Whether a restrictive covenant runs with the
         land is material in equity only on the question of notice; since, if it runs with the
         land, the covenant binds the owner regardless of knowledge, and if not, he is
         bound only if he took the land with notice'.

 Id. at 463-64, 124 A.2d at 664, quoting 26 C.JS. Deeds,§ 167.

         In affirming the lower court's dismissal of the appeal, the Court held that the protestants,

 who lived across the street and within the same block of the premises, were clearly beneficiaries

 of the agreement because they lived close enough to the premises to be considered part of the

                                                      16
St. Luke's Hospital ofBethlehem, Pennsylvania, John Capuano, Donna Capuano, and Maria Monteiro v. 736
Delaware Associates, LLC; Case No.: 2015-C-3223


general neighborhood. "It is for the benefit of all of them that the occupation and enjoyment of

their respective dwellings be free from the annoyances inherent in the unlimited commercial use

of the premises in violation of the agreement." Id. at 465-66, 124 A.2d at 664-65.

          The 736 Delaware Property and its adjoining properties, including the St. Luke's

Property, the Capuanos' Property, and the Monteiro Property were part of the Original Tract,

which was encumbered by a restrictive covenant contained first in a deed dated November 27,
      1
1920. The restrictive covenant states in pertinent part as follows:

          It is expressly covenanted and agreed by and between the parties hereto that no
          buildings other than single detached dwelling houses to cost not less than Eight
          Thousand ($8,000) Dollars each, shall be erected along the Delaware Avenue
          frontage on the herewith described premises, nor shall the front walls of such
          dwellings approach the street curb line nearer than fifty (50') feet porches nearer
          than forty-one feet six inches ( 41 '6,'), not including the steps. The same
          restrictions apply to that part of the frontage on Fiot Street that lies within one
          hundred and twenty (120') feet of the Delaware Avenue intersection, with the
          exception of private garages for which there is no restriction as to the price or
          location.

          The Original Tract also had the 1920 Deed Prohibited Uses Restriction, which prohibited

a bone boiling establishment, blacksmith shop, tallow or starch manufactuory, liquor saloon or .

place for the sale of intoxicating liquors, public automobile garage, or auto or machine repair

shop to be erected or conducted on the premises. Outhouses or chicken coops were also

prohibited on Delaware Avenue Property.

          By deed dated November 1, 1935, the owner of the Original Tract, Truman M. Dodson,

and his wife, Florence C. Dodson, conveyed to John E. Dodson and Evelyn M. Dodson, husband

and wife, a parcel that occupied the middle one-third of the total Delaware Avenue frontage of


I
  This conveyance was from James M. Degnan and Katherine M. Degnan, husband and wife, and Eldredge P.
Wilbur and Lilian L. Wilbur, husband and wife, to Truman M. Dodson.

                                                     17
St. Luke's Hospital of Bethlehem, Pennsylvania, John Capuano, Donna Capuano, andMaria Monteiro v. 736
Delaware Associates, LLC; Case No.: 2015-C-3223


the Original Tract. Said parcel is now entirely within the boundaries of the 736 Delaware

Property. The November 1, 1935 Deed contains the following restriction:

        It is expressly covenanted and agreed by and between the parties hereto that no
        buildings other than single detached dwelling houses to cost not less than Eight
        Thousand Dollars ($8,000.00) each, shall be erected on the herein described
        premises.

        The November l, 1935 Deed also contained the Prohibited Uses Restriction; but no

longer contained the Setback Restriction.

        By deed dated April 8, 1936, the owner of the Original Tract, Truman M. Dodson, and

his wife, Florence C. Dodson, conveyed to Truman M. Dodson, Jr. the northern one-third of the

total Delaware Avenue frontage of the Original Tract. Said parcel is now entirely within the

boundaries of the 736 Delaware Property. Like the property conveyed on November 1, 1935, the

Deed for this parcel contains the Single Detached Dwelling Restriction and the Prohibited Uses

Restriction, but does not contain the Setback Restriction.

        Also by deed dated April 8, 1936, the owner of the Original Tract, Truman M. Dodson,

and his wife, Florence C. Dodson, conveyed to Charles Millard Dodson the southern one-third of

the total Delaware Avenue frontage of the Original Tract. Said parcel is now partially within the

boundaries of the 736 Delaware Property. This property similarly contains the Single Detached

Dwelling Restriction and the Prohibited Uses Restriction, but does not contain the Setback

Restriction.

        Following Truman Dodson's death in 1941, the three lots along Delaware Avenue

conveyed in 1935 and 1936 were reacquired by the Trustees under Truman Dodson's will and

were again held by a common owner by 1943. The three deeds conveying those lots to the

Executors and/or Trustees under the Truman Dodson's wilJ contained the Single Detached
                                                    18
St. Luke's Hospital ofBethlehem, Pennsylvania, John Capuano, Donna Capuano, and Maria Monteiro v. 736
Delaware Associates, LLC; Case No.: 2015-C-3223


Dwelling Restriction and the Prohibited Uses Restriction) but did not contain the Setback

Restriction.

        The remaining deeds in the 736 Delaware Property's chain of title include:

    1. Deed dated March 7, 195 5, from the Trustees under the will of Truman M. Dodson to

        Theodore F.M. Gray and Louise H. Gray, husband and wife, conveying Tract I of the
                                                                             I



        736 Delaware Property. No reference to the 1920 Deed Restrictions is set forth in this

        Deed.

   2. Deed dated December 2, 1957, from the Trustees under the will of Truman M. Dodson to

        Theodore F.N. Gray, conveying for the first time Parcel 2 of the 736 Delaware Property

        which has frontage only on Fiot Street. No reference to the 1920 Deed Restrictions is set

        forth in this Deed.

   3. Deed dated September 11, 1963, from The First National Bank and Trust Company of

        Bethlehem, Executor of the Estate of Theodore F.N. Gray to Robert C. Smith and Irene

        E. Smith, husband and wife. No reference to the 1920 Deed Restrictions is set forth in

        this Deed.

   4. Deed dated June 20, 2006, from Irene E. Smith to 736 LLC. No reference to the 1920

        Deed Restrictions is set forth in this Deed.

        After careful consideration of all of the deeds in the 736 Delaware Property's chain of

title, it becomes apparent that the specific language to examine regarding the restrictions is the

language in the 1920 Deed setting forth the 1920 Deed Single Detached Dwelling Restriction,

the Setback Restriction, and the 1920 Deed Prohibited Uses Restriction. In addition, the

language in the 1935 Deed setting forth the Single Detached Dwelling Restriction and the


                                                    19
St. Luke's Hospital of Bethlehem, Pennsylvania, John Capuano, Donna Capuano, and Maria Monteiro v. 736
Delaware Associates, LLC; Case No.: 2015-C-3223


Prohibited Uses Restriction, which language is subsequently used in the transfer of the property,

must also be examined. The specific restrictions used in the pertinent deeds are silent as to any

language that would provide a third-party benefit to the properties currently owned by the

Plaintiffs. Unlike the Mariner restriction that referred to the specific rights of adjoining property

owners or the J.C. Grille, Inc. restriction that provided for the protection of the general

neighborhood, the restrictions at issue do not provide for any third-party beneficiaries. The

surrounding property owners are simply not mentioned in any manner in the restrictions.

Therefore, we conclude that the language of the restrictions did not contemplate the Plaintiffs as

third-party beneficiaries to the single detached dwelling restriction.

        The remaining inquiry is whether the evidence establishes that the situation of the parties

or the surrounding circumstances during the transfer of the property was such that a clear

intention existed as to make Plaintiffs third-party beneficiaries to the restriction. Restrictive

covenants may be enforced by other than the grantor or covenantee where they are imposed to

carry out a general scheme for the development of real property. Fey v. Swick, 308 Pa. Super.

311, 454 A.2d 551 (1982), citing Korn v. Campbell, 192 N.Y. 490, 85 N.E. 687 (1908).

         Restatement ofthe Law ofProperty§ 541, Comment E, states in part:

         . . . in the absence of specific language pointing out the intended beneficiaries of
         the promise, as is often the case, the proof must rest almost entirely or in large
         part upon the reasonable inferences from the circumstances under which the
         promise was made. One of the circumstances tending to show the necessary
         intention is the fact that the land was included in a general plan of development of
         a certain area which plan was being pursued by the promisee at the time the
         promise was made. If the whole of an area was being developed by the promisee
         in accordance with a general plan of development, the inference may and
         commonly will arise that the owner of each part of the land included within the
         plan is intended to have the benefit of the promises made by the owners of all of
         the other parts in so far as they are in conformity with the general plan ... "


                                                      20
St. Luke's Hospital ofBethlehem, Pennsylvania, John Capuano, Donna Capuano. am! Maria Monteiro v. 736
Delaware Associates, LLC; Case No.: 20 l 5-C-3223


        Pursuant to the language set forth in the above comment, we look to see whether the

whole of an area was being developed by the promisee in accordance with a general plan of

development. Turning again to the transfer of the Original Tract in 1920, the promisees were

Mr. and Mrs. Degnan and Mr. and Mrs. Wilbur. The 1920 Deed provided, in part, that "no

buildings other than single detached dwelling houses to cost not less than Eight Thousand $8,000

Dollars each, shall be erected along the Delaware Avenue frontage on the herewith described

premises." The 1920 Deed also prevented outhouses and chicken coops on Delaware Avenue

property. But the Original Tract included property other than that with land fronting Delaware

Avenue. It included Parcel 2 of the 736 Delaware Property, which fronts Fiot Street, and it

included the St. Luke's Property, the Capuanos' Property, and the Monteiro Property, which all

front Seneca Street. Those properties were not restricted by the single detached dwelling house

restriction because they do not front Delaware Avenue. In fact, pursuant to the 1920 Deed, the

remaining parcels of land in the Original Tract, which included any property that did not front

Delaware Avenue or violate the setback requirements related to Delaware Avenue, could have

presumably erected any building and conducted any business on the property that did violate the

use restriction.

         The fact that other parcels of the Original Tract could have been developed for

 commercial business is confirmed by the prohibited uses restriction in the 1920 Deed. The

 prohibited uses restriction provides: "[i]t is further covenanted and agreed that no bone boiling

 establishment, biacksmith shop, tallow or starch manufactory, liquor saloon or place for the sale

 of intoxicating liquors, public automobile garage, or auto machine repair shop shall ever be

 erected or conducted on the herein described premises or any part thereof." As long as the use


                                                     21
St. Luke's Hospital of Bethlehem, Pennsylvania, John Capuano, Donna Capuano, am/ Maria Monteiro v. 736
Delaware Associates, LLC; Case No.: 2015-C-3223


was not from the prohibited list, the parcels in the Original Tract that did not front Delaware

Avenue could have erected or conducted something other than a single detached dwelling house.

To find otherwise, would remove all meaning from the 1920 Deed Prohibited Uses Restriction.

        Because the whole of the area was not intended by the promisees as a general plan or

scheme of development, we find that the subsequent owners of lots not fronting Delaware

Avenue were never intended to have the benefit of the promises made by the owners of parcels

facing Delaware Avenue because there was never conformity with a general plan.

        This lack of conformity only grew with time as the three Delaware Avenue lots deeded

from Truman Dodson and his wife were deeded back to the Trustees under the will of Truman

Dodson in 1942 and 1943. After the Truman Dodson Trustees owned the land, the Delaware

Avenue frontage of the Original Tract was divided into two properties: Tract 1 of the 736

Delaware Property and 725 Fiot Street, whose owner is not a party to this action. The remaining

 five properties of the Original Tract (Tract 2 of the 736 Delaware Property, the Capuanos'

 Property, the Monteiro Property, and the two parcels that make up the St. Luke's property) do

 not have the single detached dwelling restriction. Again, we find that conveyances with such

 limited conformity do not establish a general plan or scheme of development. As such, Plaintiffs

 cannot assert that they were intended to have the benefit ofth.e promises made by the owners of

 the two properties abutting Delaware Avenue. The Plaintiffs were not intended third-party

 beneficiaries of the restrictive covenant at issue and lack standing to enforce the single detached

 dwelling restriction in an attempt to prevent 736 LLC from constructing a medical building.




                                                      22
St. Luke's Hospital ofBethlehem, Pennsylvania, John Capuano, Donna Capuano, am! Maria Monteiro v. 736
Delaware Associates, LLC; Case No.: 2015-C-3223


        Because we find that Plaintiffs lack standing to enforce the restrictive covenant at issue,

we deny their request for declaratory judgment.




                                                          BY THE COURT:



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                                                    23
FILED 1/17/2017 3:05           '·. PM.Clerk of Judicial Records, Civil r· ··sion, Lehigh  County,
                                                                                     Circulated
                                                                                                    PA
                                                                                                05/18/2018 12:07 PM
                           ·                            2015-C-3223 . ,s/1 S




     IN THE COURT OF COMMON PLEAS OF LEHIGH COUNTY, PENNSYLVANIA
                         CIVIL DIVISION - LAW

ST. LUKE1S HOSPITAL OF BETHLEHEM,
PENNSYLVANIA, JOHN CAPUANO,
DONNA CAPUANO, and MARIA MONTEIRO,
                         Plaintiffs
                                                                        No. 2015-C-3223
                      v.

736 DELAWARE ASSOCIATES, LLC,
                       Defendant




                "***************************************************
APPEARANCES:
                      Kevin T. Fogerty, Esquire
                             For Plaintiffs

                      Blake C, Mades, Esquire
                             For Defendant


                 ***************************************************

                                     SUPPLEMENTAL DECISION

CAROL K. McGINLEY, J.

       This Decision is written to supplement our original Decision dated December 8, 2016, in

which we held that Plaintiffs St. Luke's Hospital of Bethlehem, John Capuano, Donna Capuano,

and Maria Monteiro (Plaintiffs) lacked standing to enforce a restrictive covenant in the above-
. FILED 1/17/2017 3:0f --,, PM.Clerk of Judicial Records, Civil r'·iision, Lehigh County, PA
                        .·                       2015-C-3223        /s/1 S


    St. Luke's Hospital ofBethlehem, Pennsylvania, John Capuano, Donna Capuano, and Maria Monteiro v. 736
    Delaware Associates, llC; Case No.: 2015-C-3223


                     1
    captioned matter. In our Decision, we failed to rule on Defendant 736 Delaware Associates,

    LLC's (Defendant) request for attorneys' fees, expenses, and costs; we further did not address

    Defendant's alternate defenses pursuant to equitable theories that may have barred Plaintiffs

    from enforcing the restrictive covenant.

           Defendant asserted in its Counterclaim that it was entitled to attorneys' fees, expenses,

    and costs pursuant to 42 Pa.C.S.A. § 2503, which provides in part:

           The following participants shalt be entitled to a reasonable counsel fee as part of
           the taxable costs of the matter:

           (7) Any participant who is awarded counsel · fees as a sanction against another
           participant for dilatory, obdurate or vexatious conduct during the pendency of a
           matter.

           (9) Any participant who is awarded counsel fees because the conduct of another
           party is commencing the matter or otherwise was arbitrary, vexatious or in bad
           faith.

 42 Pa.C.S.A. § 2503(7) and (9).

           "The relentless pursuit of a claim which plainly lacks legal merit warrants an
           award of counsel fees." Miller [v. Nelson], 768 A.2d [858] at 862 [Pa.Super.
           2001] (citation omitted). "A suit is vexatious if brought without legal or factual
           grounds and if the action served the sole purpose of causing annoyance." Id "An
           opponent's conduct has been deemed to be 'arbitrary' within the meaning of the
           statute if such conduct is based on random or convenient selection or choice
           rather than on reason or nature." Berg v. Georgetown Builders, '822 A.2d 810, 816
           (l>a.Super.2003) (citation omitted).

In re Barnes Found., 2013 Pa. Super. 145, 74 A.3d 129, 136 (2013).

           Defendants argue that it was entitled to statutory relief because Plaintiffs' instituted this.

suit in an attempt to delay development and to escalate the development and construction costs


I
 The issues addressed in this Supplemental Decision were raised in Defendant's Cross-Motion for Post-Trial Relief
and Motion for Sanctions of Defendant, 736 Delaware Associates, LLC, filed with the Clerk of Judicial Records -
Civil Division on December 30, 2016.
                                                        2
FILED 1 /17 /2017 3:05· - ... PM, Clerk of Judicial Records, Civil p.•· ·ision, Lehigh County, PA
                                                    2015-C-3223           s/1 S


St. Luke's Hospital of Bethlehem, Pennsylvania, John Capuano, Donna Capuano, and Maria Monteiro v. 736
Delaware Associates, LlC; Case No.: 20 l 5-C-322 3


associated with the 736 Delaware Avenue property in an attempt to obstruct Defendant's plans to

open a medical office building in close proximity to St. Luke's Hospital's Bethlehem campus.

Defendant further argues that it was entitled to statutory relief because Plaintiffs waited until

Defendant completed the land development process, and incurred all related expenses, before the

above-captioned matter was filed.

        We have carefully reviewed the evidence presented on this subject and do not find that

the filing of this suit was either arbitrary, vexatious, or in bad faith as to warrant the award of

counsel fees. The case at issue had legitimate legal issues that were properly raised. The timing

of the suit was not improper and does not warrant sanctions.

        Finally, we supplement our Decision to state that Defendant's alternative theories of

recovery, i.e., the equitable doctrines of unclean hands and laches, were not reached because

those theories were defenses to substantive issues that were never ruled on. The merits of

Plaintiffs' claims were never ripe for resolution; therefore, the responsive defenses were not

before this court for disposition.




                                                                   BY THE COURT:




                                                      3
