R. Keenhold, Jr. v. Com. of PA, Dept. of L & I ( 2021 )

IN THE COMMONWEALTH COURT OF PENNSYLVANIA
Richard Keenhold, Jr., Danny :
Keenhold, and Keenhold Associates, :
Appellants :
:
v. :
:
Commonwealth of Pennsylvania, : No. 494 C.D. 2020
Department of Labor and Industry : Argued: April 15, 2021
BEFORE: HONORABLE MICHAEL H. WOJCIK, Judge
HONORABLE CHRISTINE FIZZANO CANNON, Judge
HONORABLE BONNIE BRIGANCE LEADBETTER, Senior Judge
OPINION NOT REPORTED
MEMORANDUM OPINION
BY JUDGE FIZZANO CANNON FILED: June 29, 2021
Richard Keenhold, Jr., Danny Keenhold, and Keenhold Associates
(collectively, the Keenholds) appeal the April 30, 2020 order of the Court of
Common Pleas of Northampton County (trial court) that sustained the preliminary
objections (Preliminary Objections) filed by the Commonwealth of Pennsylvania,
Department of Labor and Industry (Department) and denied the Keenholds’ Petition
for the Appointment of a Board of Viewers for the Assessment of Damages
(Petition) that alleged a de facto taking of their property by the Department under
Section 502(c) of the Eminent Domain Code (Code),1 26 Pa.C.S. § 502(c). Upon
review, we affirm.
I. Background
The Keenholds own a property located at 34 8th Street, Wind Gap
Borough, Northampton County (Property), which is improved with a multi-unit
apartment building, the units of which they have rented out to tenants for years. See
Petition at 2 (pagination supplied), ¶¶ 5-6, Reproduced Record (R.R.) at 3a; see also
Trial Court Order & Opinion and Statement of Reasons filed April 30, 2020 (Trial
Court Opinion) at 2, R.R. at 172a. Over the years, the Property has been the subject
of numerous Notices of Violation issued by the Department for violations of the
Pennsylvania Construction Code Act (PCCA)2 and the Uniform Construction Code
(UCC).3
Following a December 8, 2011 inspection of the Property, the
Department issued4 Notice of Violation 248098, which cited a total of 13 UCC
violations at the Property. See Notice of Violation 248098,5 attached as Exhibit 2 to
1
26 Pa.C.S. §§ 101-1106.
2
35 P.S. §§ 7210.101-7210.1103.
3
34 Pa. Code §§ 401.1-401.16.
4
Prior to Wind Gap Borough’s formal adoption of the requirements of the PCCA and UCC
by Wind Gap Borough Ordinance No. 493 (Ordinance 493) on October 28, 2018, the Department,
through the Bureau of Occupational and Industrial Safety, was charged with enforcing the
administration of the PCCA and UCC with respect to structures within Wind Gap Borough,
including the Property. See 35 P.S. § 7210.501; 34 Pa. Code § 403.103. Following the enactment
of Ordinance 493, Wind Gap Borough became responsible for its own PCCA/UCC enforcement.
5
The Keenholds allege that the Department rescinded Notice of Violation 248098 in March
2013. See Petition at 2. The Department denies this claim, explaining that no evidence exists
2
Respondent’s Answer to Petition for the Appointment of Viewers and New Matter,
at 1-4, R.R. at 26a-29a. The first four violations listed in Notice of Violation 248098
concerned the electrical panel in Property Apartment D, exposed wiring at the
Property, a lack of fire alarms in the Property’s storage spaces, and the inoperability
of some of the Property’s battery-operated smoke detectors. See Notice of Violation
248098 at 1-2, R.R. at 26a-27a; see also Trial Court Opinion at 2-3, R.R. at 172a-
73a. Notice of Violation 248098 warned that a failure to remedy the listed violations
within seven days would result in the Department declaring the Property unsafe and
the issuance of an Order to Vacate. See Notice of Violation 248098 at 2, R.R. at
27a; see also Trial Court Opinion at 2-3, R.R. at 172a-73a. Notice of Violation
248098 also listed nine further UCC violations at the Property: the lack of an
occupancy permit; the lack of approved building plans; the inability to determine
fire separation between storage spaces and apartment units; the inability to determine
fire separation between the apartments themselves; improper fire extinguishers; a
lack of handrails on steps from the foyer to a second floor of one apartment; a lack
of handrails on the main entrance and second exit steps from another apartment;
improper guardrail height on a common deck; and a lack of handrails on two sets of
common deck egress stairs. See Notice of Violation 248098 at 2-3, R.R. at 27a-28a;
see also Trial Court Opinion at 3, R.R. at 173a. Notice of Violation 248098 did not
include with these final nine listed violations the same 7-day warning issued for the
first four violations. See Notice of Violation 248098 at 3, R.R. 28a; see also Trial
Court Opinion at 3, R.R. 173a.
indicating the Department ever rescinded the Notice of Violation. See Respondent’s Answer to
Petition for the Appointment of Viewers and New Matter (Answer to Petition) at 2, R.R. at 12a;
see also Trial Court Opinion at 3.
3
On August 8, 2013, the Department approved building plans submitted
by the Keenholds and issued a building permit for the Property. See Trial Court
Opinion at 4, R.R. at 174a. Subsequent Department inspections of the Property
resulted in the October 15, 2013 issuance of Notice of Violation 248107, which
outlined continuing and new UCC violations at the Property and provided a
December 19, 2013 date by which the Keenholds needed to remedy the violations.
See Trial Court Opinion at 4, R.R. at 174a; see also Department of Labor & Industry
Industrial Board Adjudication, File No. 503168 (Board Adjudication) at 1-2, R.R. at
39a-40a.
In early 2014, Richard Keenhold sought variances from the
Department’s Labor & Industry Board (Board) to waive the fire rated separation
requirements between the Property’s storage spaces and apartments and the
apartments themselves that had formed part of the violations previously noted in
Notice of Violation 248098. See Trial Court Opinion at 5, R.R. at 39a-47a & 175a;
Board Adjudication at 2, R.R. at 40a. Thereafter, an inspection of the Property
conducted on February 21, 2014 found that the Keenholds had remedied only one of
the previous 14 violations cited in Notice of Violation 248107. See Trial Court
Opinion at 5, R.R. at 175a; Board Adjudication at 2, R.R. at 40a. After conducting
an evidentiary hearing, the Board noted that the Keenholds failed to demonstrate:
(1) that the previously cited UCC violations did not affect the safety of Property
tenants; (2) that the Keenholds were attempting to make the Property UCC-
compliant as quickly as possible; and (3) that the Property was equipped with
compensatory safety features that would provide an equivalent degree of protection
to that required by the UCC. See Board Adjudication at 7-9, R.R. at 45a-47a.
Ultimately, the Board concluded that the Keenholds’ continued non-compliance
4
with UCC requirements unreasonably affected the safety of the Property’s tenants
and so denied the requested variances. See Board Adjudication at 9, R.R. at 47a.
Additionally, in 2012 and again in 2015, the Department brought
criminal charges against Richard Keenhold for UCC violations at the Property. See
Docket No. MJ-03302-CR-0000329-2012, R.R. at 31a-33a; Docket No. MJ-0332-
NT-0000439-2015, R.R. at 35a-37a. Richard Keenhold pleaded guilty before a
magisterial district judge in both cases. See id.On April 9, 2014, the Department issued an order to show cause upon
the Keenholds demanding they show why the Property should not be vacated as a
result of the failure to resolve the violations of Notice of Violation 248107. See Trial
Court Opinion at 5-6, R.R. at 175a-76a. The Department issued the same order to
show cause again in early June of 2014. See id. at 6, R.R. at 176a.
On May 17, 2016, the Department filed a complaint in this Court
seeking the enforcement of the Notices of Violations previously issued for violations
at the Property that the Keenholds had not yet remedied. See Complaint filed May
17, 2016 at Commonwealth Court Docket No. 306 M.D. 2016 (Complaint), R.R. at
55a-67a. After the Keenholds failed to answer the Complaint, this Court granted the
Department’s Motion for Summary Judgment and, on August 25, 2016, entered an
Order/Final Decree (Final Decree) requiring the Keenholds to vacate the apartments
and dwelling units at the Property and enjoining the use of those apartments until the
Property was brought into compliance with UCC requirements. See Final Decree,
R.R. at 49a-51a. The Keenholds did not appeal the Final Decree.
A subsequent inspection of the Property conducted on December 14,
2016, revealed that, although certain violations had been remedied, 11 of the 14 UCC
violations remained unresolved. See Department Inspection Compliance Report
5
dated December 14, 2016, R.R. at 69a-70a. Nearly a year later, on November 29,
2017, a Department inspector observed non-permitted construction activities
occurring at the Property. See Trial Court Opinion at 6-7, R.R. 176a-77a.
Accordingly, the Department entered a stop work order on December 1, 2017. See
Trial Court Opinion at 7, R.R. at 177a.
Despite the issuance of the stop work order, the Keenholds, believing
they would be able to resolve their issues with the Department, entered into an
agreement for sale of the Property with a third party. See Trial Court Opinion at 7,
R.R. at 177a. The Keenholds allege that the Department refused the third-party
purchaser’s requests to meet with Department inspectors to discuss the Property. See
id.On May 15, 2018, the Keenholds submitted a new application for a
building permit so they could complete work on the Property and have the Property
inspected for sale to the third party. See Trial Court Opinion at 8, R.R. at 178a.
However, the Department denied the application because the Keenholds failed to
comply with statutory filing requirements.6 See id. At some point thereafter, the
third party cancelled the purchase of the Property. See Petition at 6, ¶ 36, R.R. at 7a.
The Keenholds filed the Petition on January 18, 2020. In the Petition,
the Keenholds allege a de facto taking under Section 502(c) of the Code, 26 Pa.C.S.
§ 502(c), by the Department through the Department’s enforcement of the
PCCA/UCC. See Petition at 6-7, ¶¶ 39-42, R.R. at 7a-8a. Specifically, the
Keenholds assert that they have been substantially denied the beneficial use and
6
Applicants must submit three sets of relevant documents to the Department for building
permit application consideration. See 34 Pa. Code. § 403.42a(b). The Keenholds failed to provide
the requisite three copies of relevant documents with their building permit application. See Trial
Court Opinion at 8, R.R. at 178a.
6
enjoyment of the Property and are “left with a property that [they] cannot sell, nor
rent to third parties due to the issues with [the Department] and the inability to obtain
the necessary permits in order to be in a position to address the alleged deficiencies.”
Petition at 6, ¶ 37, R.R. at 7a.
On November 7, 2019, the Department filed the Preliminary Objections
in the trial court, raising four objections. See Preliminary Objections, R.R. at 81a-
170a. The first three Preliminary Objections respectively argued that the Petition
fails to state a claim for a de facto taking because: (1) the Department lacks authority
to condemn the Property, see Preliminary Objections at 4-5 (pagination supplied),
R.R. at 84a-85a; (2) the Keenholds cannot establish that exceptional circumstances
exist that substantially deprive them of the beneficial use and enjoyment of the
Property, see Preliminary Objections at 5-8, R.R. at 85a-88a; and (3) the deprivation
was not a consequence of the Department’s power to condemn, see Preliminary
Objections at 8-9, R.R. at 88a-89a. In its fourth Preliminary Objection, the
Department argued that the Keenholds failed to exhaust available administrative
remedies. See Preliminary Objections at 10-11, R.R. at 90a-91a.
Following oral argument, on April 30, 2020, the trial court entered an
order sustaining each of the Preliminary Objections and denying the Petition. This
appeal followed.7
7
“Preliminary objections are the exclusive method under the [] Code of raising legal and
factual objections to a petition for appointment of viewers which alleges a de facto taking.”
Pileggi v. Newton Twp., 245 A.3d 377 n.4 (Pa. Cmwlth. 2021) (quoting German v. City of
Philadelphia, 683 A.2d 323, 325 n.5 (Pa. Cmwlth. 1996)). “When a court of common pleas
sustains preliminary objections and dismisses a petition, our scope of review is limited to
determining whether the trial court committed an error of law and whether findings are supported
by competent evidence.” Id.7
II. Issues
On appeal, the Keenholds argue that the trial court erred by sustaining
each of the Department’s Preliminary Objections. See Keenholds’ Br. at 4-5 & 16-
36. First, the Keenholds argue that the trial court erred in sustaining the Preliminary
Objections without taking evidence, because the Petition alleges fact which, if
proven, establish a de facto taking by the Department. See Keenholds’ Br. at 4 &
22. Second, the Keenholds argue that the trial court erred by determining the
Department was not an acquiring agency with the power of eminent domain. See
Keenholds’ Br. at 4 & 22-25. Third, the Keenholds argue the trial court erred by
determining that the Keenholds were not displaced persons as defined by Section
502 of the Code. See Keenholds’ Br. at 4 & 25-26. Fourth, the Keenholds claim
that the trial court erred by determining that the Keenholds failed to allege facts
sufficient to establish that the Department’s actions deprived them of the beneficial
use and enjoyment of the Property. See Keenholds’ Br. at 4-5 & 26-28. Fifth, the
Keenholds argue the trial court erred by finding the Keenholds failed to allege
exceptional circumstances. See Keenholds’ Br. at 5 & 28-30. Sixth, the Keenholds
allege the trial court erred by determining the Department’s actions arose from the
proper use of police powers. See Keenholds’ Br. at 5 & 30-33. In their final claim,
the Keenholds argue the trial court erred by sustaining the Preliminary Objection
that alleged the Keenholds failed to exhaust available administrative remedies. See
Keenholds’ Br. at 5 & 33-34.
III. Discussion
Section 502(c) of the Code allows a property owner who asserts that its
property interest has been condemned without the filing of a declaration of taking to
8
file a petition for the appointment of viewers setting forth the factual basis of the
petition. See 26 Pa.C.S. § 502(c)(1). “[T]he Code provides the exclusive method
and practice governing eminent domain proceedings, including de facto takings, and
[] preliminary objections are the exclusive method of raising objections to a petition
for appointment of viewers alleging a de facto taking.” York Rd. Realty Co., L.P. v.
Cheltenham Twp., 136 A.3d 1047, 1050 (Pa. Cmwlth. 2016) (quoting Gerg v. Twp.
of Fox, 107 A.3d 849, 852 (Pa. Cmwlth. 2015)) (emphasis in original) (brackets
omitted); see also Section 502 of the Code, 26 Pa.C.S. § 502. However,
[i]n eminent domain proceedings, preliminary objections
serve a broader purpose than ordinary preliminary
objections and are intended as a procedure to
expeditiously resolve threshold legal issues[.] Indeed, the
trial court must first determine whether a de facto taking
has occurred before sending the matter to a board of view
to determine damages.
Hill v. City of Bethlehem, 909 A.2d 439, 442 n.8 (Pa. Cmwlth. 2006) (internal
citations omitted). Therefore, when preliminary objections are filed in a de facto
taking case,
[a] trial court must determine first whether, as a matter of
law, the averments of the petition for the appointment of
viewers, taken as true, in addition to any stipulated facts,
are sufficient to state a cause of action for a de facto taking.
If not, the preliminary objections must be sustained and
the petition dismissed or allowed to be amended.
Hill, 909 A.2d at 443 (quoting Stein v. City of Philadelphia, 557 A.2d 1137, 1140
(Pa. Cmwlth. 1989)).
The decision of whether a compensable taking has
occurred requires an initial determination that the act
9
complained of was, in fact, an exercise of eminent domain
power. Acts not done in the exercise of the right of
eminent domain and not the immediate, necessary or
unavoidable consequences of such exercise cannot be the
basis of a proceeding in eminent domain.
German v. City of Philadelphia, 683 A.2d 323, 326–27 (Pa. Cmwlth. 1996).
“A de facto taking is not a physical seizure of property; rather, it is an
interference with one of the rights of ownership that substantially deprives the owner
of the beneficial use of his property.[8]” York, 136 A.3d 1047, 1050–51 (quoting In
re Borough of Blakely, 25 A.3d 458, 463-64 (Pa. Cmwlth. 2011)) (emphasis
omitted). The law is well-settled that:
In order to prove a de facto taking, the property owner
must establish exceptional circumstances that
substantially deprived him of the beneficial use and
enjoyment of his property. This deprivation must be
caused by the actions of an entity with eminent domain
powers. Also, the damages sustained must be an
immediate, necessary and unavoidable consequence of the
exercise on the entity’s eminent domain powers.
Id. at 1050–51 (quoting In re Borough of Blakely, 25 A.3d 458, 463-64 (Pa. Cmwlth.
2011)) (emphasis and footnote omitted). Thus, “[a] property owner carries a heavy
burden of proof in de facto condemnation proceedings and must show that: (1) the
condemnor has the power to condemn the land under eminent domain procedures;
(2) that exceptional circumstances have substantially deprived him of the use and
enjoyment of his property; and (3) the damages sustained were the immediate,
necessary, and unavoidable consequences of the exercise of the eminent domain
8
“The beneficial use of the property includes not only its present use, but all potential uses,
including its highest and best use.” York, 136 A.3d at 51.
10
power.” In Re Mountaintop Area Joint Sanitary Auth., 166 A.3d 553, 561 (Pa.
Cmwlth. 2017); see also York, 136 A.3d at 1050–51. No bright line test exists to
determine whether a government action has resulted in a de facto taking; each case
presents a fact-specific inquiry. See York, 136 A.3d at 1050–51. “[W]hen
determining whether a de facto taking has occurred, we focus on the governmental
action in question.” Mountaintop Area Joint Sanitary Auth., 166 A.3d at 561.
A. Eminent Domain Power
The Department’s first Preliminary Objection argued that the Petition
failed to state a claim for a de facto taking because the Department lacks the power
to condemn pursuant to the Code. See Preliminary Objections at 4-5, R.R. at 84a-
85a. The Department argued that no statute empowers to the Department, the alleged
condemnor in this matter, with the power to condemn property. See Preliminary
Objections at 4, ¶ 18, R.R. at 84a. As a result, the Department claimed it had no
power of eminent domain upon which to base a de facto taking claim. See
Preliminary Objections at 4-5, ¶¶ 18-21, R.R. at 84a-85a.
Without citation to statutory or regulatory authority, the Petition alleges
that “the [Department] is [a] body politic with the authority to condemn real
property.” Petition at 6, ¶ 38, R.R. at 7a. The Petition further alleges that the
Department’s actions made it an “acquiring agency” under the Code and further
rendered the Keenholds “displaced persons” under the Code. See Petition at 6, ¶ 40,
R.R. at 7a; see also Keenholds’ Br. at 22-25.
This Court has determined that “that a de facto taking [determination]
must begin with an examination of whether the condemnor is an entity that has the
power of eminent domain.” Env’t Indus., Inc. v. Casey, 675 A.2d 392, 395 (Pa.
11
Cmwlth. 1996). The Court found that, “[w]ithout that power vested in an alleged
condemnor, no cause of action for a de facto taking can stand.” Env’t Indus., 675
A.2d at 395; see also Rowland v. Com., 820 A.2d 896, 899 (Pa. Cmwlth. 2003)
(finding that no de facto cause of action may stand where an alleged condemnor does
not have the power of eminent domain). Therefore, this Court has determined that
a party fails to state a cause of action for a de facto taking where the party fails to
provide statutory and/or regulatory citations that impart eminent domain power on
the defendant. See Env’t Indus., 675 A.2d at 395.
The Code defines “acquiring agency” as “[a]ny entity, including the
Commonwealth, vested with the power of eminent domain by the laws of this
Commonwealth.” 26 Pa.C.S. § 103 (emphasis provided). Concerning special
damages for displacement, Section 901 of the Code defines “acquiring agency” as
“an agency or person that is carrying out a program or project to the extent that the
agency or person causes a person to become a displaced person.[]” 26 Pa.C.S. §
901. The Code defines a “displaced person” as any of the following:
(i) A condemnee or other person that moves from real
property or moves personal property from real property:
(A) as a direct result of a written notice of intent to
acquire or the acquisition of the real property, in
whole or in part, for a program or project
undertaken by an acquiring agency; or
(B) on which such person is a residential tenant or
conducts a small business or a farm operation as a
direct result of rehabilitation, demolition or other
displacing activity for a program or project
undertaken by an acquiring agency if the
displacement is permanent.
12
(ii) A person that was in occupancy of the real property on
or before the date of acquisition, notwithstanding the
termination or expiration of a lease entered into before or
after the event giving rise to the displacement.
26 Pa.C.S. § 103.9 Further, this Court has determined that, even where a party fits
the definition of an acquiring agency, a failure to plead statutory eminent domain
authority is fatal to de facto taking claims. Env’t Indus., 675 A.2d and 395.
The trial court here noted that the Petition failed to plead any statutory
or regulatory authority that established that the Department has been delegated the
power of eminent domain. See Trial Court Opinion at 15, R.R. 184a. The trial court
further determined that, absent the citation of proper eminent domain delegating
authority, the Department does not fit the definition of an “acquiring agency.” See
id. at 15-16, R.R. at 184a-85a. As a result, the trial court concluded that the Petition
fails to state a claim for a de facto taking and sustained the first Preliminary
Objection. See id. at 16, R.R. 185a.
We find no error in the trial court’s determination. The Keenholds point
to no statutory or regulatory eminent domain authority held by the Department.
Without a statutory power of condemnation, the Department lacks the power of
9
The definition expressly excludes:
(i) A person that unlawfully occupies the displacement property or
occupied the property for the purpose of obtaining assistance under
this title.
(ii) In any case in which the acquiring agency acquires real property
for a program or project, a person, other than a person that was an
occupant of the property at the time it was acquired, that occupies
the property on a rental basis for a short term or a period subject to
termination when the property is needed for the program or project.
26 Pa.C.S. § 103.
13
eminent domain. See Reading Area Water Auth. v. Schuylkill River Greenway Ass’n,
100 A.3d 572, 579 (Pa. 2014) (eminent domain power can only be exercised within
the limitations established by law). As an entity without eminent domain power, the
Department cannot effect a de facto taking. See York, 136 A.3d at 1050–51. Further,
without such power, an entity does not qualify as an “acquiring agency” under the
Code because it is not “vested with the power of eminent domain under the laws of
this Commonwealth.” See Acquiring Agency Definition, 26 Pa.C.S. § 103.10
Additionally, because it does not qualify as an “acquiring agency,” the Department
cannot have caused the Keenholds to become “displaced persons” under the Code.
See Displaced Person Definition, 26 Pa.C.S. § 103. The trial court did not err in
granting the first Preliminary Objection based on the Department’s lack of eminent
domain condemnation power.
B. Substantial Deprivation of the Beneficial Use and Enjoyment of the Property
Next, the Keenholds argue that the trial court erred by determining that
the Petition failed to illustrate that the Department substantially deprived them of the
beneficial use and enjoyment of the Property. See Keenholds’ Br. at 26-30. The
Keenholds argue that an inability to rent or sell the Property “are obviously relevant
to whether the [P]roperty is no longer income-producing and thus whether it has lost
its commercial use.” Id. at 27. The Keenholds claim they have been substantially
deprived of the beneficial use of the Property because the actions of the Department
10
We note that the definition of “acquiring agency” contained in Section 901 of the Code
and relied upon by the Keenholds applies to the determination of special damages after a trial court
determination finding that a de facto taking has occurred. See 26 Pa.C.S. § 901. Because the
Keenholds have not satisfied the threshold Section 103 definition of “acquiring agency” through
citation to proper authority illustrating the Department’s power to condemn, a further examination
under Section 901 of the Code is not warranted in this case.
14
have cost them their rental tenants and a potential buyer of the Property. See id. at
28.
An allegation that consists merely of the legal conclusion that a de facto
taking has occurred will not carry a property owner’s heavy burden of proving the
existence of exceptional circumstances that that substantially deprived the property
owner of the use and enjoyment of their property. See Borough of Barnesboro v.
Pawlowski, 514 A.2d 268, 270 (Pa. Cmwlth. 1986); see also York, 136 A.3d 1047,
1050-51. Further, as stated supra, the damages sustained in de facto taking cases
must result from the “immediate, necessary, and unavoidable consequences of the
exercise of the eminent domain power.” Mountaintop Area Joint Sanitary Auth.,
166 A.3d at 561. Therefore, “acts that are not the immediate, necessary or
unavoidable consequence of the exercise of eminent domain will not form the basis
of de facto condemnation.” Id.Here, the Department argues that any deprivation of the beneficial use
and enjoyment of the Property suffered by the Keenholds, including the inability to
rent and/or sell the Property, was occasioned, not by the Department’s actions, but
by the Keenholds’ own doing. See Department Br. at 10-14. The Department claims
that, far from alleging that the Department’s actions caused their claimed
deprivations, the Petition’s allegations instead concede that the Keenholds’ own
historical failure to remediate the PCCA/UCC violations at the Property caused the
claimed deprivations. See id. Specifically, the Department notes that the Petition
concedes that the Department issued numerous PCCA/UCC-based notices of
violations and criminal charges over the years but was devoid of allegations claiming
that the Property was ever brought in compliance with PCCA/UCC requirements,
15
directly requiring that the vacation of the Property and thus the loss of rental
incomes. See id. at 11-12.
Likewise, the Department claims the Petition admits that the building
permit for the Property was returned and not issued due to the Keenholds’ failure to
submit the proper number of applications and plans as required to complete the
application process. See Department’s Brief at 12. Regarding the sale of the
Property, the Department further notes that the Keenholds admit that the Department
advised that an inspection of the Property could not occur in the absence of a valid
building permit, but that the Petition alleged no exceptional circumstances related to
the Keenholds’ failure to obtain the required building permit. See id. at 13. Based
on the above, the Department argues that the alleged deprivations suffered by the
Keenholds resulted not as a result of the Department’s exercise of a power of
eminent domain, but instead resulted from their own failure to bring the Property
into compliance with PCCA/UCC requirements, and further that the alleged
deprivations were abatable, preventable, and reparable. See id. at 13-14.
The trial court agreed with the Department, finding that “there are no
exceptional circumstances that have substantially deprived the [Keenholds] of the
beneficial use and enjoyment of the[ P]roperty, and . . . also . . . that any issues with
the [Keenholds’] ability to sell or rent the [] Property derive from the [Keenholds’]
inability to comply with the UCC and PCCA.” See Trial Court Opinion at 18, R.R.
at 186a. The trial court accordingly sustained the second Preliminary Objection. See
id.
We find no error in the trial court’s reasoning. The allegations of the
Petition itself outline years of violation notices the Department issued in reference
to the Property that resulted in the vacation of the Property. The Petition does not
16
allege that the violations were ever resolved or remedied. The Department
documentation included as attachments to the pleadings in this case11 confirm that
the violations continued unresolved in the face of multiple notices of violations. The
Petition further acknowledges that the inspection of the Property for the purpose of
the third-party sale could not occur in the absence of valid building permit, and that
the Department had not issued a building permit based on the Keenholds’ failure to
comply with building permit application requirements. The Petition therefore does
not allege that exceptional circumstances occasioned by the Department’s exercise
of eminent domain created the alleged deprivations of the loss of rental income and
an inability to sell the Property. Instead, the Petition outlines alleged deprivations
occasioned by the Keenholds’ own failure to comply with PCCA/UCC
requirements, not from the immediate, necessary, and unavoidable consequences of
the exercise of the eminent domain power required to form the basis of an allegation
of de facto taking. Thus, the trial court did not err in sustaining the Department’s
second Preliminary Objection.
C. Alleged Deprivation Occasioned By Exercise of Police Power
Next, the Keenholds claim that the trial court erred in granting the third
Preliminary Objection, which alleged that the Department’s actions arose from the
proper use of its police powers, not the exercise of eminent domain powers. See
Keenholds’ Br. at 30-33; see also Preliminary Objections at 8-9, R.R. at 88a-89a.
We do not agree.
11
“Courts reviewing preliminary objections may not only consider the facts pled in the
complaint, but also any documents or exhibits attached to it.” Freemore v. Dep’t of Corr., 231
A.3d 33, 37 (Pa. Cmwlth. 2020) (quoting Allen v. Dep’t of Corr., 103 A.3d 365, 369 (Pa. Cmwlth.
2014)) (internal brackets omitted).
17
“It is well-settled that the exercise of the police power is not a taking.”
Est. of Blose ex rel. Blose v. Borough of Punxsutawney, 889 A.2d 653, 659 (Pa.
Cmwlth. 2005). “[T]he very essence of the police power (as distinguished from the
power to eminent domain) is that the deprivation of individual rights and property
without compensation cannot prevent its operation, so long as its exercise is proper
and reasonable.” Est. of Blose, 889 A.2d at 658 (quoting Commonwealth v. Barnes
& Tucker Co., 371 A.2d 461, 467 (Pa. 1977)) (emphasis and internal quotation
marks omitted). This Court has echoed the long-held pronouncement of the
Supreme Court of the United States that
[a] prohibition simply upon the use of property for
purposes that are declared, by valid legislation, to be
injurious to the health, morals, or safety of the
community, cannot, in any just sense, be deemed a
taking or an appropriation of property for the public
benefit. . . . The power which the States have of
prohibiting such use by individuals of their property as
will be prejudicial to the health, the morals, or the safety
of the public is not—and, consistently with the existence
and safety of organized society, cannot be—burdened with
the condition that the State must compensate such
individual owners for pecuniary losses they may sustain,
by reason of their not being permitted, by a noxious use of
their property, to inflict injury upon the community.
Est. of Blose, 889 A.2d at 659 (quoting Mugler v. Kansas, 123 U.S. 623, 668–69
(1887)) (emphasis in original).
Based on this, the trial court sustained the third Preliminary Objection,
concluding that
the [Department] was enforcing the provisions of the UCC
and PCCA. We find that the subject enforcement aligned
with the [Department’s] police powers. We also note that
18
the enforcement was reasonable. The [Keenholds] were
cited for a multitude of UCC violations over the years,
including, but not limited to, the lack of fire alarms, the
lack of hand rails, the lack of one-hour rated fire separation
walls, and the incorrect type of fire extinguishers. These
violations are prejudicial to the health, the morals, or the
public safety. Specifically, the violations placed the
[Keenholds’] tenants at risk. The alleged exceptional
circumstances complained about were procedural aspects
of the UCC. Therefore, we find that the [Department’s]
actions were part of its police powers, and the execution
of those powers were proper and reasonable.
Trial Court Opinion at 19-20, R.R. at 187a-88a (internal quotation marks and citation
omitted).
We agree. As the trial court noted, the Department acted to enforce the
Code and the requirements of the PCCA and the UCC, which were enacted, among
other reasons, “to provide standards for the protection of life, health, property and
environment and for the safety and welfare of the consumer, general public and the
owners and occupants of buildings and structures.” 35 P.S § 7210.102(b)(1). The
Department’s actions, as alleged in the Petition, therefore amount to the exercise of
its police power. The exercise of police power in this fashion does not, as a matter
of law, amount to a taking. Est. of Blose, 889 A.2d at 659. Accordingly, the trial
court did not err in sustaining the third Preliminary Objection.
D. Failure to Exhaust Administrative Remedies
Finally, the Keenholds argue that the trial court erred by sustaining the
fourth Preliminary Objection, which argued that they had failed to exhaust their
available administrative remedies. See Keenholds’ Br. at 33-35; see also
Preliminary Objections at 10-11, R.R. at 90a-91a.
19
Eminent domain law does not provide relief for “speculative and
conjectural” claims. Blakely, 25 A.3d at 467. The Petition makes no allegations that
the Keenholds pursued any action with the Department following the return of their
building permit application in 2018 or otherwise sought a building permit through
Wind Gap Borough following the October 28, 2018 enactment of Ordinance 493. 12
The trial court noted that the Keenholds’ claims were based on their inability to
comply with the UCC and PCCA. See Trial Court Opinion at 20-21, R.R. at 188a-
89a. The trial court also found that the Keenholds failed to even attempt to comply
with Ordinance 493, noting that it appeared to the trial court “that it was incumbent
upon the [Keenholds] to have at least complied with Wind Gap Ordinance No. 493
to support the argument that it was deprived of any meaningful use of its land.” See
id. The trial court found that these facts together rendered the claims of the Petition
speculative and conjectural and did not entitle the Keenholds to relief. See id. at 21,
R.R. at 189a.
We again agree with the trial court’s analysis. The Petition does not
allege that the Keenholds properly complied with the requirements of either the
Department or Wind Gap Ordinance No. 493 to remedy the issues contained in the
various notices of PCCA/UCC violations at the Property. Likewise, the Petition
does not allege that the Keenholds sought to comply with the requirements of the
either Department or Wind Gap Ordinance 493 to secure the building permit
required to inspect the Property for purposes of the third-party sale. Accordingly,
the trial court did not err by sustaining the fourth Preliminary Objection.
12
See Note 4.
20
IV. Conclusion
For the above reasons, we affirm the trial court’s April 30, 2020 order.
__________________________________
CHRISTINE FIZZANO CANNON, Judge
21
IN THE COMMONWEALTH COURT OF PENNSYLVANIA
Richard Keenhold, Jr., Danny :
Keenhold, and Keenhold Associates, :
Appellants :
:
v. :
:
Commonwealth of Pennsylvania, : No. 494 C.D. 2020
Department of Labor and Industry :
ORDER
AND NOW, this 29th day of June, 2021, the April 30, 2020 order of the
Court of Common Pleas of Northampton County is AFFIRMED.
__________________________________
CHRISTINE FIZZANO CANNON, Judge