County of Northumberland v. Twp. of Coal ( 2022 )

IN THE COMMONWEALTH COURT OF PENNSYLVANIA
County of Northumberland :
:
v. :
:
Township of Coal, : No. 982 C.D. 2021
Appellant : Argued: September 15, 2022
BEFORE: HONORABLE ANNE E. COVEY, Judge
HONORABLE ELLEN CEISLER, Judge
HONORABLE STACY WALLACE, Judge
OPINION NOT REPORTED
MEMORANDUM OPINION BY
JUDGE COVEY FILED: October 19, 2022
The Township of Coal (Township) appeals from the Northumberland
County (County) Common Pleas Court’s (trial court) August 23, 2021 order granting
the County’s Summary Judgment Motion (Motion) and directing the Township to
refund the County $267,320.98. There are two issues before this Court: (1) whether
the County complied with Section 1 of the Act commonly referred to as the Refund
Act (Refund Act)1 by submitting a verified claim to the Township before filing its
assumpsit action; and (2) whether the trial court properly concluded that the County
had met its burden of establishing that the Township’s Permit Fee Ordinance was
unreasonable. After review, this Court affirms.
On August 9, 2017, the County submitted building applications to the
Township to convert an existing juvenile detention facility into a County prison after
the County’s prison was destroyed by a fire (Project). On August 11, 2017, the
Township sent the County an invoice (Invoice) demanding $161,724.00 for “State
1
Act of May 21, 1943, P.L. 349, as amended, 72 P.S. § 5566b.
Inspections [and] Plan Review[.]” Reproduced Record (R.R.) at 29a. The Invoice
also sought an additional $220,801.00 for a “Coal Township Permit” (Coal
Township Permit) pursuant to Township Ordinance 408 (Ordinance).2 Id.
On August 18, 2017, the County paid the Township $161,724.00. By
September 6, 2017 correspondence, the Township acknowledged receipt of the
County’s payment, but demanded the outstanding $220,801.00 balance by close of
business on September 13, 2017, or the Township would issue a stop work notice on
September 14, 2017. See R.R. at 32a. By September 12, 2017 letter (September 12,
2017 Letter), County Chief Clerk Maryrose McCarthy (McCarthy) paid the
Township $220,801.00 under protest and also demanded proof that the Township
had incurred the costs purportedly represented by the previously submitted
$161,724.00 fee. See R.R. at 35a-36a.
The September 12, 2017 Letter provided, in pertinent part:
First, in regard to the payment previously made by
the County [] to the Township [] in the amount of
$161,724[.00], I am hereby requesting proof that the
Township actually incurred, or will be charged, the costs
as set forth in the August 11, 2017 Invoice to the County
for “State Inspections [and] Plan Review.”
Secondly, regardless of whether the charges related
to the $161,724[.00] are legitimate, I am also hereby
requesting proof that the $220,801.00 fee, nebulously
referred to in the Township’s [I]nvoice as the Coal
Township Permit fee, in any way relates to the costs to the
Township in performing services related to the permitting
of the prison.
2
Effective March 9, 2006, Township Ordinance 408 amended Township Ordinance Nos.
A-282 and A-393 to provide: “All building fees for new structures or the renovation or
rehabilitation of an existing structure shall be 1% of the total construction estimate but not less
than $10[.00] for the first $1,000[.00]. There shall be no maximum fee.” Township of Coal,
Northumberland Cnty., Pa. Ordinance § 408 (2006); R.R. at 266a. The $220,801.00 fee was 1%
of the estimated $22,080,100.00 Project cost.
2
I would refer you to the following Pennsylvania
Commonwealth Court cases on the subject: Raum v. Board
of Sup[ervisors] of Tredyffrin [Township], 370 A.2d 777([Pa. Cmwlth.] 1976); Bucks Cove Rod & Gun Club, Inc.
v. Texas [Township] Zoning [Hearing Board (Pa. Cmwlth.
No. 2666 C.D. 2010, filed Sept. 14, 2011)]; Martin Media
v. Hempfield [Township] Zoning Hearing [Board], 671
A.2d 1211 ([Pa. Cmwlth.] 1996); Skepton v. Borough of
Wilson, [755 A.2d 1267] ([Pa.] 2000) . . . . These cases all
clearly state that a municipality may not use its power to
charge fees for issuing licenses or permits for the purpose
of raising revenue and, further, that the fees charged must
be directly related to the costs incurred by the municipality
in issuing the permit. Any amounts collected in excess of
the Township’s costs will be considered an unauthorized
tax and the County will be permitted to recoup these
amounts, plus interest. I would point out that your
[Township] Board [of Commissioners’] member’s
comments in the local newspaper would seem to belie any
argument that the fees the Township has charged are in
any way related to the Township’s actual costs.
If I have not received the documentation requested
herein, on or before the close of business on September 20,
2017, please be advised that the County will commence
action against the Township for reimbursement of all fees
over and above the Township’s actual costs. In the event
that the Township wishes to revise its permit fee, based
upon the aforementioned, please feel free to send your
revised fee to my attention.
R.R. at 35a-36a.
On January 15, 2018, the County filed an action in the trial court
seeking declaratory judgment that the Township’s building fees were unreasonable
and/or unenforceable and that the building permit fees charged were unconstitutional
and/or legally invalid (Complaint). Further, the County sought relief in assumpsit,
requesting a refund of building fees, permit fees, inspection fees or other fees in
excess of the Township’s actual expense of administering the building permit
process, plus interest.
3
On February 16, 2018, the Township filed preliminary objections to the
County’s Complaint. Therein, the Township alleged, inter alia, that the Complaint
should be dismissed because the County did not submit to the Township “a written
and verified claim” before filing its action in assumpsit, as required by Section 1(a)
of the Refund Act. 72 P.S. § 5566b(a). The County filed its response to the
preliminary objections. On April 25, 2018, the trial court overruled the Township’s
preliminary objections, concluding, in pertinent part, that given the County’s
September 12, 2017 Letter, the Township had failed to demonstrate that the County
did not satisfy Section 1(a) of the Refund Act’s “written and verified claim”
requirement. 72 P.S. § 5566b(a); see R.R. at 73a-74a.
On May 30, 2018, the Township filed its Answer, New Matter and a
Contingent Counterclaim. On June 27, 2018, the County filed its Answer to the
Township’s New Matter and Contingent Counterclaim. On August 30, 2018, the
Township filed a Summary Judgment Motion, alleging that the County had failed to
file a “written and verified claim for a refund of alleged overpayment for permits.”
R.R. at 107a. On September 25, 2018, the County filed its response thereto. On
December 17, 2018, the trial court denied the Township’s Summary Judgment
Motion. See R.R. at 238a-239a.
On February 18, 2021, the County filed its Motion, alleging therein that
no genuine issues of material fact remained with respect to the County’s right to a
refund. On March 19, 2021, the Township filed its response. On August 23, 2021,
the trial court granted the County’s Motion and directed the Township to refund the
County $267,320.98 plus statutory interest and costs. See R.R. at 383a. In its
contemporaneous opinion, the trial court reasoned:
Building permit fees fall within the category of license
fees and must be assessed commensurate with the expense
of administering the permit. [See] 72 P.S. [§] 5566b;
4
Skepton . . . , and Talley v. Commonwealth . . . , . . . 553
A.2d 518 ([Pa. Cmwlth.] 1989).
Presented at oral argument and attached to the [County’s]
brief is evidence that Building Inspections Underwriters
(B.I.U.), the entity the Township engaged to perform all
inspections and reviews, actually discounted its charge to
the Township, resulting in a total payment by the
Township in the amount of $113,204.02. This appears to
be unrefuted evidence.
In a deposition with Robert M. Slaby, Jr. [(Slaby)], []
Township Manager, it is acknowledged that the Township
performed no independent inspections, so the [trial] court
is confronted with an assessed fee of $269,320.98 that
cannot be justified by corresponding [T]ownship
expenditures or expenses. The Township’s explanation is
reduced to an argument that this amount was assessed to
cover general administrative costs. In support of this
assertion, they have provided no documentation; the [trial]
court will concede, however, that they have the usual
expenses attendant to running the office and will adjust the
refund by $2[,]000.00, which the [trial] court considers
generous.
Trial Ct. Aug. 23, 2021 Op. at 2; R.R at 384a. On September 1, 2021, the Township
appealed to this Court.3
The Township first contends that the County failed to satisfy the Refund
Act’s mandatory requirement that it submit a “written and verified claim” before
bringing suit, and argues that the trial court’s conclusion that the September 12, 2017
Letter satisfied those requirements is erroneous. 72 P.S. § 5566b(a). The Township
cites Stranahan v. County of Mercer, 697 A.2d 1049 (Pa. Cmwlth. 1997), to support
its position that this Court must “narrowly construe [the Refund Act’s] statutory
procedures and require the [County] to file for a refund before bringing an action in
3
“An order of a trial court granting summary judgment may be disturbed by an appellate
court only if the [trial] court committed an error of law . . . ; thus, our standard of review is de
novo, and our scope of review is plenary.” Firearm Owners Against Crime v. City of Pittsburgh,
276 A.3d 878, 884 n.8 (Pa. Cmwlth. 2022) (quoting Desher v. Se. Pa. Transp. Auth., 212 A.3d
1179, 1185 n.6 (Pa. Cmwlth. 2019)).
5
assumpsit.” Township Br. at 9 (quoting Stranahan, 697 A.2d at 1053) (emphasis
omitted). The Township asserts that because the September 12, 2017 Letter did not
explicitly request a refund, and was not verified, the trial court should have dismissed
the action.
Section 1 of the Refund Act states in relevant part:
(a) Whenever any person or corporation of this
Commonwealth has paid or caused to be paid, or hereafter
pays or causes to be paid, into the treasury of any political
subdivision, directly or indirectly, voluntarily or under
protest, any taxes of any sort, license fees, penalties, fines
or any other moneys to which the political subdivision is
not legally entitled; then, in such cases, the proper
authorities of the political subdivision, upon the filing with
them of a written and verified claim for the refund of the
payment, are hereby directed to make, out of budget
appropriations of public funds, refund of such taxes,
license fees, penalties, fines or other moneys to which the
political subdivision is not legally entitled. Refunds of
said moneys shall not be made, unless a written claim
therefor is filed, with the political subdivision involved,
within three years of payment thereof.
....
(c)(1) Any taxpayer who has paid any tax money to which
the political subdivision is not legally entitled shall receive
interest on such sum of money. . . .
72 P.S. § 5566b. Section 2 of the Refund Act provides:
In the event of refusal or failure on the part of authorities
of the political subdivision involved to make any such
refund of taxes, license fees, penalties, fines or other
moneys to which the political subdivision is not legally
entitled, or refusal or failure to pay interest as required by
[S]ection 1 [of the Refund Act], then the aggrieved person
or corporation shall have the right to bring suit for and
recover any such taxes, interest, license fees, penalties,
fines or other moneys to which the political subdivision is
not legally entitled, subject to the limitation herein
provided, by instituting an action in assumpsit in the court
6
of common pleas of the county wherein such political
subdivision is located.
72 P.S. § 5566c.
This Court addressed the Refund Act in FP Willow Ridge Associates,
L.P. v. Allen Township, 166 A.3d 487 (Pa. Cmwlth. 2017). Therein, an apartment
complex owner (Willow Ridge) sought a sewer tapping fee refund from the
township. Although Willow Ridge filed its complaint within three years of paying
the fees, it did not file a claim for refund with the township within the three-year
period following payment, as required by the Refund Act. The FP Willow Ridge
Court explained:
This Court has held that the Refund Act’s three-year
provision is a statute of notification, not a statute of
limitations. Borough of Malvern v. K.R.I. Corp., . . . 570
A.2d 633, 636 ([Pa. Cmwlth.] 1990). “[A]bsent a
showing of prejudice on the part of the municipality, a
party’s failure to notify the municipality of a cause of
action within a statutory time frame will not be a bar
to such action.” Id.; see also City of Phila[.] v. Tax Rev[.]
Bd. of City of Phila[.], 901 A.2d 1113, 1115 (Pa. Cmwlth.
2006) (interpreting local counterpart of the Refund Act
pertaining to taxes in the same manner).
Here, Willow Ridge did not technically file a claim for
refund until May 14, 2014, which was over three years
after Willow Ridge paid the [t]ownship [on March 31,
2011]. Although Willow Ridge filed a complaint on
November 22, 2013, which was within the three-year
period, a complaint does not constitute a “written and
verified claim for the refund of the payment” for purposes
of the Refund Act. By the plain language of the Refund
Act, a claim must be filed as a prerequisite to filing suit.[4]
See 72 P.S. § 5566c (“In the event of refusal or failure on
the part of authorities of the political subdivision involved
to make any such refund . . . , then the aggrieved person or
corporation shall have the right to bring suit for and
4
Notably, Willow Ridge’s written claim, submitted approximately six months after Willow
Ridge filed its complaint, was itself unverified, but enclosed and referenced a copy of the verified
complaint.
7
recover . . . .”). To conclude otherwise would invite
unnecessary litigation in cases where a political
subdivision may have every intention of issuing a refund
upon proper presentation of a claim.
Notwithstanding, the [t]ownship was well aware that
Willow Ridge disputed the assessment of tapping fees
for its apartment complex within the three-year
period. Willow Ridge expressed its intention to seek a
reduction of tapping fees based on alternative capacity
analysis for apartment dwellings when it sent its payment
on March 30, 2011. . . .
Although Willow Ridge’s efforts did not technically
constitute a timely “written and verified claim for the
refund of payment” for purposes of the Refund Act,
[a]ppellees cannot profess surprise or prejudice.
Appellees were well aware of Willow Ridge’s position
and its desire to seek a reduction in tapping fees for its
apartment complex. Under the circumstances here,
Willow Ridge’s failure to file “a written and verified claim
for the refund of the payment” within a three-year
notification period does not operate as a bar to its Refund
Act claim.
FP Willow Ridge, 166 A.3d at 493-94 (emphasis added; citations omitted).
Based in part on FP Willow Ridge, the trial court rejected the
Township’s arguments that the County had failed to adhere to the Refund Act’s
procedures, reasoning:
On September 12, 2017, the County paid the [] Township
Permit [f]ee but stated that [it] did so “under protest”. The
County declared that the building fees, as assessed by the
Township, were not permissible by law and demanded
repayment of fees in excess of the actual amount of the
costs incurred by the Township in issuance of the same.
In its September 12, 2017 [L]etter, the County advised the
Township that if it did not receive the requested
documentation on fees and taxation, it would “commence
action against the Township for reimbursement of all fees
over and above the Township’s actual costs.”
Furthermore, a [d]efendant cannot feign “surprise or
prejudice” when the [d]efendant was well aware of the
8
[p]laintiff’s position and desire to seek a reduction in fees.
FP Willow Ridge . . . , 166 A.3d [at] 494 . . . .
Trial Ct. Apr. 25, 2018 Op. at 4-5; R.R. at 73a-74a.
The Township argues that the trial court misconstrued FP Willow Ridge
by interpreting it to invalidate the statutorily-mandated written and verified claim
requirement based on the Township’s awareness of the claim, rather than simply
interpreting FP Willow Ridge to permit the submission of a written and verified
claim beyond three years, while still requiring strict compliance with the
requirements that a written and verified claim be submitted.5 In particular, the
Township claims the trial court ignored the FP Willow Ridge Court’s conclusion that
“[b]y the plain language of the Refund Act, a claim must be filed as a prerequisite
to filing suit,” id. at 493, and its declaration that “a complaint does not constitute a
‘written and verified claim for the refund of the payment’ for purposes of the Refund
Act.”6 Id. This Court disagrees.
The statutorily-mandated “written and verified claim” requirement’s
purpose, 72 P.S. § 5566b(a), is “to notify a municipality that a claim may be pending
against it[.]” Malvern, 570 A.2d at 636. The Pennsylvania Superior Court has held
that “the determination that an action should be barred for failure to comply with the
notice statute must be coupled with a consideration of what if any prejudice resulted
to the defendant.” Landis v. Phila., 369 A.2d 746, 749 (Pa. Super. 1976); see also
5
This Court questions the practical consequences of accepting the Township’s argument.
Even if this Court concluded that the September 12, 2017 Letter demanding justification for the
fees imposed, and threatening legal action for reimbursement, did not constitute a claim, and/or
the lack of verification invalidated the claim, this matter would not be put to rest. Here, the
Township was aware of the County’s claim, within one month of the County’s initial payment.
Thus, although it is now well beyond three years since the County’s initial payment, the Township
would be hard pressed to establish prejudice, and, accordingly, the County would not be prohibited
from filing its written and verified claim and again bringing an action in assumpsit.
6
The Township disregards the fact that in FP Willow Ridge, Willow Ridge’s request for
refund was not filed until after Willow Ridge instituted its legal action. Clearly, the FP Willow
Ridge Court did not require strict compliance with the Refund Act’s notification provision.
9
Dubin v. Se. Pa. Transp. Auth., 281 A.2d 711, 712 (Pa. Super. 1971) (with respect
to notice filed one week beyond a statutory six-month notice requirement, the
Superior Court, quoting the lower court, explained that the statute “is not a statute
of limitations. It must be reasonably applied to effectuate its purpose and not to
needlessly strike down just claims. . . . There is no question that the plaintiff has
substantially complied with the provisions . . . .”).
Here, within one month of the County’s initial August 18, 2017
payment, the Township “was well aware” that the County disputed both fees. Trial
Ct. Apr. 25, 2018 Op. at 5; R.R. at 74a. As noted by the trial court, the County’s
September 12, 2017 Letter was unmistakably clear that the County believed the fees
were unlawful, demanded justification therefor, and threatened legal action to
recover fees in excess of the Township’s actual costs. In the September 17, 2017
Letter, the County expressly claimed it was entitled to “recoup” the excess fees
charged and threatened legal action seeking “reimbursement.”7 R.R. at 36a. Thus,
the September 12, 2017 Letter unambiguously notified the Township “that a claim
may be pending against it[.]”8 Malvern, 570 A.2d at 636. Approximately four
months after the deadline set for the Township’s response, the County filed the
instant assumpsit action.
It is undisputed that the September 12, 2017 Letter was not verified.9
However, in Donald B. Remmey, Inc. v. Centennial School District, 25 Pa. D. & C.
7The Refund Act does not set forth requirements for a “written . . . claim” and does not
explicitly mandate that a written claim include the word refund. 72 P.S. § 5566b(a).
8
The Township contends that the Refund Act’s language contemplates that payments may
be made under protest, however, even in such cases, it requires an additional written and verified
claim be submitted. Here, the County did far more than submit a payment under protest. It
expressed that it was entitled to recoup the overpayments, sought documentation from the
Township to justify its charges, and threatened litigation to obtain reimbursement.
9
The Refund Act does not define “verified claim[.]” 72 P.S. § 5566b(a). However, “[i]t
is generally recognized . . . that for legal purposes verification means confirmation of the truth of
a statement by oath or affirmation.” Commonwealth v. Jones, 369 A.2d 733, 734 (Pa. Super.
10
3d 397 (1982), aff’d, Centennial School District v. Donald B. Remmey, Inc., 459
A.2d 915 (Pa. Cmwlth. 1983) (Remmey II), the trial court determined that such lack
of verification did not preclude recovery. The plaintiff therein brought an action
against Centennial School District (District) for a refund of a business privilege tax.
The District argued, inter alia, that the plaintiff’s claim, in the form of a letter
seeking a refund, was invalid because it was unverified. The trial court rejected the
District’s argument, explaining:
We do not find, however, that a merely technical error of
this sort precludes plaintiff from recovering in a suit in
assumpsit. The mere fact that plaintiff has not attested to
the accuracy of his claim by oath or affixed an affidavit
has not impaired the purpose of the act or prejudiced [the
District] in any way. The taxing authority has been
appraised of plaintiff’s claim. It is difficult to see what
difference it would make if plaintiff had a notary seal or
an affidavit affixed to its letter.
Remmey, 25 Pa. D. & C. 3d at 403 (citation omitted). This Court affirmed based on
the trial court’s opinion, “agree[ing] with the trial court’s reasoning and disposition
of the legal issues . . . .” Remmey II, 459 A.2d at 915.
As in Remmey, the County’s failure to affirm the truth of its statement
contained in the September 12, 2017 Letter did not prejudice the Township or impair
the Refund Act’s purpose. The Township “was well aware” of the County’s claims.
Trial Ct. Apr. 25, 2018 Op. at 5; R.R. at 74a. Accordingly, this Court concludes that
the trial court did not err when it held that the County complied with Section 1 of
the Refund Act.
The Township next contends that the County failed to sustain its burden
to prove both that the fees were unreasonable and that the Township did not
reasonably anticipate the expense of enforcing the Ordinance.
1977). “The purpose of verification is to defend a party against spurious allegations.” Twp. of
Chester v. Stapleton, 456 A.2d 673, 675 n.1 (Pa. Cmwlth. 1983).
11
Initially,
“[o]rdinances are presumed to be valid and those who
challenge their validity carry a heavy burden to establish
their invalidity.” Fisher v. Viola, 789 A.2d 782, 785 (Pa.
Cmwlth. 2001); accord Chrin Brothers, Inc. v. Williams
T[wp.] Zoning Hearing B[d.], 815 A.2d 1179, 1184 (Pa.
Cmwlth. 2003). A rebuttable presumption is not absolute
or unassailable. Commonwealth v. McNeil, . . . 439 A.2d
664, 667 ([Pa.] 1981); Kiskadden v. Dep[’t] of Env[’t]
Prot[.], 149 A.3d 380, 402 (Pa. Cmwlth. 2016) . . . . It is
merely an assumption until it is disproved.
Ziegler v. City of Reading, 216 A.3d 1192, 1201 (Pa. Cmwlth. 2019).
Relative to whether the fee was reasonable, this Court explained:
The Pennsylvania Supreme Court, in Mastrangelo v.
Buckley, . . . 250 A.2d 447 ([Pa.] 1969), defined a license
fee as follows:
A license fee is a sum assessed for the
granting of a privilege. In most instances,
where a license is granted the [c]ity
invariably incurs expense[s] such as the
cost of registration and inspection; it is
only proper that one who seeks and
receives a license should bear this expense.
To defray the cost of a license a fee is
charged to the licensee; however, this fee
must be commensurate with the expense
incurred by the [c]ity in connection with the
issuance and supervision of the license or
privilege.
Mastrangelo, 250 A.2d at 464 (footnote omitted). “A
license fee is distinguishable from a tax[,] which is a
revenue producing measure characterized by the
production of a high proportion of income relative to the
costs of collection and supervision.” Thompson v. City of
Altoona Code Appeals Bd., 934 A.2d 130, 133 (Pa.
Cmwlth. 2007). A municipality cannot impose a tax upon
a business under the guise of exercising its police power,
and, therefore, a license fee will be struck down if its
amount is “grossly disproportionate to the sum
12
required to pay the cost of the due regulation of the
business.” Flynn v. Horst, . . . 51 A.2d 54, 60 ([Pa.] 1947).
“The party challenging a license fee has the burden of
proving that the fee is unreasonable.”[10] Thompson,
934 A.2d at 133. “All doubt must be resolved in favor of
the reasonableness of the fee, since the municipality must
be given reasonable latitude in anticipating the expense
of enforcing the ordinance.” Id.Costa v. City of Allentown, 153 A.3d 1159, 1165 (Pa. Cmwlth. 2017) (emphasis
added).
The Township’s Invoice stated in relevant part:
The permit fees for the Northumberland County Prison
Project are as follow[s]:
State Inspections [and] Plan Review - $ 161,724.00[.00]
BREAKDOWN: Building $ 103,345.00
Bldg. Plan Review 9,887.00
State Fee 4.00
Electrical 9,340.00
Elec[.] Plan Review 2,471.75
Mechanical 15,120.00
Mech. Plan Review 2,471.75
Plumbing 11,000.00
Plumb[.] Plan Review 2,471.75
Fire Protection 3,141.00
F.P. Plan Review 2,471.75
$ 161,724.00
Coal Township Permit - $ 220,801.00
R.R. at 29a.
According to the Invoice, the $161,724.00 fee represented the state
inspections and plan reviews attendant to the granting of necessary permits (State
10
Importantly, “[t]he burden does not shift to a municipality to prove that a challenged fee
is reasonable; it always remains the burden of the challenger to show that the fees are
unreasonable.” Ziegler v. City of Reading, 216 A.3d 1192, 1201 (Pa. Cmwlth. 2019) (quoting M
& D Props., Inc. v. Borough of Port Vue, 893 A.2d 858, 863 (Pa. Cmwlth. 2006)).
13
Inspections and Plan Reviews). However, the trial court found that unrefuted
evidence showed that B.I.U., which performed all inspections and reviews on the
Township’s behalf, charged the Township only $113,204.02 for the State
Inspections and Plan Reviews.11 Nonetheless, the Township assessed the full
$161,724.00 fee to the County, charging the County an additional $48,519.98 over
and above its costs for the inspections and reviews.
In addition, the Township assessed the $220,801.00 Coal Township
Permit fee pursuant to its Ordinance representing 1% of the estimated Project cost.
See R.R. at 266a. However, in deposition testimony, Slaby confirmed that B.I.U.
performs all inspections relating to the State Inspections and Plan Reviews, and
acknowledged that with respect to the Coal Township Permit, there is no formal
inspection process, and no additional inspections are performed beyond those
performed for the State Inspections and Plan Reviews. See R.R. at 258a-259a.
As our Supreme Court described in Mastrangelo, license fees defray
the cost of expenses such as “the cost of registration and inspection[,]” Mastrangelo,
250 A.2d at 464. Here, B.I.U. charged the Township $113,204.02, and the Township
in turn, charged the County $161,724.00 for the State Inspections and Plan
Reviews.12 See R.R. at 29a. Even if a portion of the $48,519.98 difference between
11
The charge represented a 30% discount that B.I.U. offered the Township which the
Township accepted. See R.R. at 270a-271a.
12
In an affidavit attached to the Township’s response to the County’s Motion, Slaby
clarified his deposition testimony, that $161,724.00 of the charges represented “separate costs
related to permitting and the administration of the Uniform Construction Code ([]UCC[])[, Act of
Nov. 10, 1999, P.L. 491, as amended, 35 P.S. § 7210.301-7210.305].” R.R. at 294a. He
expounded:
6. First, there are permits which are administered by the Township
which are not specifically controlled by the UCC.
7. Specifically, 70% of UCC (State) permit fee costs which have
specific trade inspections are paid to the Township’s retained
inspectors. The balance of the 30% of the UCC permit fees
[resulting from B.I.U.’s discount] are allocated to and used to defray
14
the Township’s expense and the amount it invoiced the County could be attributed
to administrative or supervisory costs as the Township contends, and part of the
$161,724.00 fee was thereby justified as representing the costs of inspections,
reviews and administrative fees, there is no record evidence justifying the additional
cost between B.I.U.’s charge and the amount the Township invoiced, or the
additional 1% Ordinance fee, apart from the Township’s general claims that the
charges cover administrative expenses.
Indeed, the trial court emphasized:
the Township’s administrative costs, which include the maintenance
of our offices, telephone, fax and internet capabilities and allocable
Township staff time to administer the UCC.
8. In addition, the Township’s Code Officer patrols the Township to
identify work that requires both Township and UCC permits. The
Township administrative staff and Code Officer answers [sic]
questions about the permitting requirements, processes, and plan
requirement. Township administrative staff members record and
track all plans and permits, with in[-]person visits, phone calls and
emails back and forth with permittees on a routine basis. Properly
enforcing the UCC takes a considerable amount of Township
administrative staff time.
9. The Township has reasonably allocated all administrative costs.
10. The County’s reference to the “30%” [discount by B.I.U.] which
the County claims are “overcharges” are, in fact, allocated to offset
the Township’s administrative costs.
11. The County has failed to understand, and therefore has
misrepresented the Township’s costs which are defrayed by the
permit fees. . . .
....
14. The Township’s methodology of allocating administrative costs
was established by the Township approximately 15 years ago and
reflects the continued reasonable effort by the Township to establish
a fee schedule reasonably reflective of the proper allocation of costs.
The allocation of costs is based on historical data and reasonably
anticipates the Township’s actual costs in the year to come.
R.R. at 294a-295a.
15
[Slaby acknowledged that] the Township performed no
independent inspections, so the [trial] court is confronted
with an assessed fee of $269,320.98 that cannot be
justified by corresponding [T]ownship expenditures or
expenses. The Township’s explanation is reduced to an
argument that this amount was assessed to cover general
administrative costs. In support of this assertion, [it has]
provided no documentation; the [trial] court will concede,
however, that [it has] the usual expenses attendant to
running the office . . . .
Trial Ct. Aug. 23, 2021 Op. at 2; R.R. at 384a.
The Township contends:
The necessary predicate to the County’s entitlement to any
relief for Counts I and II of its complaint was [to] have
undisputed facts which lead to the invariable and
inevitable conclusion that the Township’s Ordinance was
illegally conceived or disparately enforced. The County
offered and had no such evidence.
[T]he uncontradicted facts set forth in . . . Slaby’s affidavit
reflect that the Township’s permit fee structure considers
the cost and expenses incurred by the Township in the
inspection and administration of construction within the
Township.
Township Br. at 19-20 (footnote and citation omitted). The Township also claims
that “[t]he County offered no evidence supporting its claim that the Ordinance was,
per se, ‘unreasonable’ or that the Township did not reasonably anticipate costs and
the expense of enforcing the Ordinance when it was adopted.” Township Br. at 18-
19. In fact, the Township asserts that “the County took no steps to establish the
Township’s total costs related to the administration of the prison
construction[,]” and thus did not meet its burden. Township Br. at 20 (bold
emphasis added). It further contends that “[t]he County did not acknowledge, and
did not seek to identify, [the] Township’s costs associated with the prison
project.” Id. (emphasis added).
16
Contrary to the Township’s assertions, the County demanded in its
September 12, 2017 Letter, “proof that the Township actually incurred, or will be
charged, the costs . . . for ‘State Inspections [and] Plan Review[,]’” and “proof that
the $220,801.00 fee, nebulously referred to in the Township’s invoice as the Coal
Township Permit fee, in any way relates to the costs to the Township in performing
services related to the permitting of the prison.” R.R. at 35a. Further, at Slaby’s
deposition, the County did seek such information, asking: “You do not charge a
building fee based upon what the project is going to cost the [T]ownship;
correct?” R.R. at 265a (emphasis added). Slaby answered, “Correct.” Id.
(emphasis added). The County then asked Slaby: “Do you have any calculation
that you have done regarding what the costs that the [T]ownship incurred as a
result of the [Project] are?” R.R. at 265a (emphasis added). Slaby responded:
“Not at this time. No.” Id. (emphasis added).
The County also contends that it “requested in discovery that [the]
Township produce any and all costs [the] Township incurred [ ] in excess of
B[.]I[.]U[.]’s charges . . . [and the] Township failed to produce any evidence of any
such costs.” County Br. at 20. Notably, the Township does not reference any such
evidence in its briefs beyond the general assertions in Slaby’s affidavit. Although it
is a challenger’s burden to show a license fee exceeds the costs of administration,
where a challenger has specifically requested proof of costs and a defendant fails to
disclose proper proof of its costs and where the evidence produced demonstrates that
fees were improperly inflated, a court may find that the challenger has met its burden
to invalidate the fee. See Martin Media.
The County filed its Complaint including counts seeking declaratory
judgment that the Township’s fees were unreasonable, unenforceable and
unconstitutional, and further, a count seeking relief in assumpsit, requesting a refund
of its alleged overpayments. The County moved for summary judgment and the trial
17
court granted the County’s Motion, ordering the Township to refund $267,320.98 to
the County. Given the 30% differential between the costs of inspections charged to
the Township and the costs the Township charged to the County, the evidence
demonstrating the lack of a formal inspection process, the lack of any additional
inspections conducted attendant to the Coal Township Permit, and the Township’s
failure, upon demand, to document its related actual costs, the trial court did not err
when it concluded that the County had met its burden. See Martin Media. For all
of the above reasons, the trial court’s order is affirmed.
_________________________________
ANNE E. COVEY, Judge
Judge Fizzano Cannon did not participate in the decision in this case.
18
IN THE COMMONWEALTH COURT OF PENNSYLVANIA
County of Northumberland :
:
v. :
:
Township of Coal, : No. 982 C.D. 2021
Appellant :
ORDER
AND NOW, this 19th day of October, 2022, the Northumberland
County Common Pleas Court’s August 23, 2021 order is affirmed.
_________________________________
ANNE E. COVEY, Judge