Pennsylvania Superior Court Rules Penn State Has Right To Purchase Beta Theta Pi Property
A state appeals court upheld a trial judge’s ruling on October 18 that Penn State has the right to acquire the Beta Theta Pi fraternity house property where pledge Timothy Piazza sustained fatal injuries during an alcohol-fueled bid acceptance party in 2017.
A Superior Court panel affirmed Centre County Judge Brian Marshal’s 2021 verdict in favor of the university and subsequent rejection of an appeal by the Alpha Upsilon Chapter of Beta Theta Pi, the alumni-run house corporation that owns and manages the property.
“We find that the trial court’s conclusions are supported by competent evidence and are clearly free of legal error,” President Judge Emeritus Correale Stevens wrote.
It was not clear if the alumni house corporation would appeal further.
The 1928 deed conveying the property at 220 N. Burrowes St. stipulated that the university had the right to reacquire it if it was no longer used as a fraternity house for the Beta Theta Pi chapter. The property, which is surrounded by the University Park campus, has not housed an active fraternity chapter since its recognition was permanently revoked by the university and its charter suspended by its national organization in the weeks after Piazza, a 19-year-old sophomore, died from brain injuries and a lacerated spleen after falling head-first down the basement stairs on February 4, 2017.
After the housing corporation declined to entertain university offers for the property, Penn State filed a lawsuit in November 2018 to seek a court-ordered sale.
After a three-day trial in October 2021, Marshall concluded the absence of an active fraternity chapter triggered Penn State’s right to purchase the house.
“The 1928 deed contains no genuine doubt as to its interpretation,” Marshall wrote.
Marshall gave the university and alumni house corporation six months to negotiate a sale price, and if an agreement could not be reached, a board of arbitrators would decide how much Penn State should pay to acquire it. The Alpha Upsilon chapter then appealed in the Court of Common Pleas, and later to Superior Court.
Attorneys for the alumni house corporation argued that the deed doesn’t state an active chapter of undergraduate student members is needed to be living in the house and that the corporation itself constituted the fraternity chapter. They further added that because the national Beta Theta Pi organization did not permanently revoke the charter, it could still reestablish an active chapter at Penn State.
Marshall rejected those arguments, writing that the deed clearly distinguishes between the active chapter and the house corporation. He also wrote that the house corporation is a nonprofit organization, not a fraternity, and has no power to determine whether an active chapter will again be established.
The house corporation also suggested that Penn State used Piazza’s death as an opportunity to reacquire the property, an assertion Marshall also rejected.
University officials did discuss the deed and the future of the property in the weeks and months after Piazza’s death, and contemporaneous records presented at the trial showed former Penn State President Eric Barron said the property would not be used in the future as student housing. Barron also had multiple conversations with Piazza’s father, Jim, who suggested potential uses for the property, including demolishing the house or replacing it with an engineering building named in his son’s honor.
Barron testified at the trial, though, that acquiring the house was not a motivation behind banning the fraternity.
“What occurred was just reprehensible. It was awful,” Barron said, according to court transcripts. “It was a case where I believe a young man’s life could have been saved if people cared about him. And as an institution, any death is horrible, but we just couldn’t ignore the evidence that was there and needed to have a very strong message that we just can’t have this happen.”
Vice President for Student Affairs Damon Sims testified that prior to February 2017, Beta Theta Pi had been viewed, and held itself out as, a “chapter of excellence.” A subsequent investigation, however, found the chapter had committed “numerous” alcohol-related hazing violations dating back to 2014.
“What we discovered through this investigation was there was a systematic longstanding effort to do anything but what the chapter should have been doing and what it professed to have been doing,” Sims said. “We had every reason to doubt that this group of people would change their way. And in fact we had an awful lot of evidence suggesting that this was about as bad a situation as we had seen, and that we had to take action that was commensurate with that circumstance.”
The house corporation voluntarily told its student members to vacate the property in the spring of 2017. Since then it has been used intermittently by dues-paying alumni members for football weekend accommodations and for board meetings.
In the summer of 2018, the house corporation voted down a sale of the property to alumnus and donor Donald Abbey. Prior to that, university officials discussed purchasing the property from Abbey if he acquired it and if the deed came with no restrictions.
Abbey — a 1970 Penn State graduate, alumnus of the chapter, and a real estate investment mogul — has his own pending lawsuit against the house corporation. He is seeking repayment of $8.5 million he says he loaned to the chapter over more than a decade for repairs, renovations, and operations for the house.
A funding agreement stated that the money would be repaid with interest if the property stopped being used as a fraternity house, if the chapter “decides not to follow the Men of Principle initiative or is determined to be out of compliance…”
The house corporation contends that Abbey held sway over the board president who signed the agreement and that the full board never approved it. Because the house is the corporation’s only significant asset, they argued, Abbey’s lawsuit is essentially a way to gain control of the property.
That case was stayed pending the resolution of the university case.
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