Lawsuit and Possible Sale Follows Closing of Beta House

Tim Burke, Manley Burke, tburke@manleyburke.com

Make no mistake, the death of Tim Piazza is the utmost tragedy of the events of February 2^nd and 3^rd in the Beta Theta Pi House at Penn State.   The consequences too are very real for the eighteen members of that now closed chapter who are facing criminal charges.  But there are other unique consequences as well.

On March 10^th, Donald G. Abbey filed suit in the Centre County Court of Common Pleas against the Alpha Epsilon Upsilon Chapter of Beta Theta Pi, Inc.  Abbey, a wealthy alum, provided millions of dollars for the renovation of the chapter house and certain operations.  According to the complaint, over 10 million dollars in total.

Abbey had, according to the complaint, provided approximately $7.7 million dollars to Alpha Upsilon “for the repair reconstruction and improvement of the house,” but thereafter it was closed for a period of time.  When the fraternity was ready to recolonize, a commitment was made to comply with Beta’s Men of Principle Program and Abbey committed millions of additional dollars to prepare the house for recolonization and to assist in funding the recolonization and Men of Principle effort.  Abbey and the Alpha Upsilon Chapter entered into a funding agreement with the Alpha Upsilon Chapter of the Fraternity of Beta Theta Pi, Inc.  The agreement provided that should Alpha Upsilon not follow the Men of Principle initiative or fail to prevent excessive damage to the house, or ceases to be a chapter of Beta Theta Pi, Alpha Upsilon was obligated within 60 days to repay to Abbey the new money provided to assist in the recolonization and the Men of Principle effort.  A separate provision of the agreement dealt with the money originally put up by Abbey for the earlier renovation of the house.  With regard to those funds, the agreement specifically provided that if Alpha Upsilon “ceases to be a chapter of the general fraternity and the house is utilized for a purpose other than Alpha Upsilon of Beta Theta Pi, unless agreed to by Abbey,” then those original funds had to be repaid as well.  If either set of funds were not repaid, a lien would be placed on the house in the amount of those funds.  This litigation is in its earliest stage.  It may be some time before the court resolves it if the parties cannot reach a settlement.  But the obligation to repay an alum donor $10,000,000 or more is not the only unique consequence growing out of the tragedy of Tim Piazza’s death.

On October 29, 1928, the Pennsylvania State College deeded to the Alpha Upsilon Chapter of the Fraternity of Beta Theta Pi, the land on which the house was built.  That was not an unusual an unusual event.  In many cases in that era, colleges welcomed fraternities that would build houses providing residences for its students on what had been university property.   But that deed specifically provided that the university has the right to repurchase the property “if for any reason the said building or buildings should cease to be used as a chapter or fraternity house, for the use, benefit and behalf” of the Alpha Upsilon Chapter of the Fraternity of Beta Theta Pi.  Under the terms of the deed, if the parties cannot agree on the price to be paid, the price shall be fixed by an arbitrator.  The chapter may negotiate with regard to the price, but under the terms of the deed, it has no choice but to sell the property if Penn State wants to purchase the property and is willing to pay the price fixed by arbitration.

It is no idle possibility that Penn State would do just that.  In fact, it has done so in the past.

The fraternity house that used to be next door to the now closed Beta Theta Pi House was Phi Delta Theta’s house.  Phi Delta Theta’s local house corporation had acquired the land on which its house was built pursuant to a deed with a similar provision in it.  Phi Delta Theta closed its Penn State Chapter because of the Chapter’s failure to conform to the fraternity’s alcohol-free housing policy.  When the chapter was closed, Penn State exercised its right to acquire the property and immediately thereafter tore down the Phi Delta Theta house.

What was a magnificent house, largely as a result of the funds provided by Donald Abbey, is now closed, never again to be a Beta Theta Pi house.  Whether the university will purchase the house or not remains to be seen.  But the sale of the house, either to Penn State or to another fraternity, may well be the only hope that the Alpha Upsilon Chapter of the fraternity of Beta Theta Pi, Inc. has of meeting its financial obligation to Mr. Abbey.  That is until the next shoe falls and Piazza’s estate files its own civil action.

And these are just the consequences so far due to the failure of members of the Alpha Upsilon chapter to fulfill their obligations as Men of Principle or simply as law abiding citizens.