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Judge Denies Motion for Injunction Over Use of Beta Theta Pi House

by on November 30, 2017 3:12 PM

A judge has denied a request for injunction to prohibit Beta Theta Pi's housing corporation from providing accommodations to alumni in exchange for a donation.

The house at 220 N. Burrowes St. where Penn State student and fraternity pledge Timothy Piazza suffered fatal injuries during a bid acceptance event in February was opened to the chapter's alumni on home football weekends throughout the fall. Alumni were invited to stay in the house and take part in catered meals and gatherings in the house's bar for fees ranging from $50 to $300. Former members were evicted from the house in March after the chapter was permanently banned by the university and the house appeared to be unoccupied until September. 

Centre County Judge Katherine Oliver ruled that chapter alumnus Donald Abbey failed to meet the burden of proof for a preliminary injunction and denied the motion.

Abbey, who is suing the chapter for breach of contract over millions of dollars he says he loaned for renovations to the house, was seeking an injunction "to restrain the House Corp's unlawful use" of the property. Abbey's lawsuit claims that, per an agreement, he is owed $8.5 million he loaned the chapter over more than a decade for repairs, renovations and operations for the house. The house is the chapter's is the chapter's only significant asset and should Abbey win judgment in the suit would be the source of payment.

The chapter argues that the money was a gift, not a loan, that its full board never approved the agreement, and that Abbey made decisions to spend the money unilaterally. The disputed funding agreement states that the chapter is obligated to repay Abbey if, among other circumstances, the chapter ceases to be recognized by the national Beta Theta Pi and/or if the house is used for a purpose other than as a fraternity.

Abbey's motion for inunction said the chapter is renting the house and selling food and alcohol to alumni and guests without the proper zoning permits or the required liquor license. Fines imposed for liquor law violations, as well as any that continue to accrue for code violations, could result in liens against the house, Abbey's attorneys argued, and those liens would supersede any other claims on the house.

Alpha Upsilon attorney Michael Leahey argued that the use was not unlawful and that the chapter was not selling alcohol and not at risk for liquor code violations. He wrote that rooms and meals were made available in exchange for a donation, but that the chapter owned the house and was allowed to make it available to alumni and guests.

In Oliver's order denying the injunction, she wrote that Abbey did not appear at a hearing on the motion or call any witnesses to testify about the agreement that forms the basis of his claim in the lawsuit. Abbey also has not, at this stage of the lawsuit, demonstrated a likelihood he will win judgment.

Centre Region Code Administration has issued four citations against the house for change of use without proper permits, with fines totaling almost $2,000.

Oliver wrote that she recognized the principle that statute violations can cause "irreparable injury" but that "any relationship between the alleged unlawful activity and injury to Plaintiff is tenuous, at best. Even if the Court were to conclude that Defendant's use of the property to accommodate alumni members for weekend visits violated local building and/or zoning codes Plaintiff has failed to show how any such violations would cause irreparable harm."

The chapter, Oliver wrote, provided testimony that the mortgage on the house is current, the property is being maintained and that the chapter's equity in its assets exceeds its current liabilities.

"Based on all of the evidence presented, the Court determines that Plaintiff's speculation as to the outcome of any zoning citations, the financial impact on Defendant and the potential for resulting encumbrances on the property significant enough to render Defendant judgment-proof, is insufficient to meet Plaintiff's burden to prove irreparable harm," Oliver wrote.

Piazza's parents, Jim and Evelyn, and their attorney, Tom Kline have been critical of the alumni's use of the house.

When it first came to light in September, Kline called it "disgraceful and disrespectful."

In an interview in October with CBS NewsEvelyn Piazza, called it "offensive" and "disgusting."

"That was a crime scene. They shouldn't be there. That house should be shut down and repurposed," added Jim Piazza.



Geoff Rushton is managing editor for StateCollege.com. Contact him at geoff.rushton@statecollege.com or find him on Twitter at @geoffrushton.
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